Ed Morrissey: the sudden drop in demand for gasoline is distorting the results on inflation
Almost all categories still show double-digit year-on-year increases, and crude consumer food prices show a month-on-month increase in double digits as well. Even with the one-month plunge in gas prices, energy inflation still hits 8.5% year-on-year in this report, too.
So what does this mean? Is this a signal that inflation is over and the economy is on the brink of recovery? Not exactly. As I mentioned in my first post, the drop in gas prices is due to a sudden drop in demand, not an increase in supply — and that usually means a recession. The month-on-month personal-consumption figures in the PPI report for July look ominous, too[…]
Personal consumption less foods dropped dramatically to -4.3%, which suggests that economic activity is now concentrated on staples. That would be a product of a five-quarter decline in real disposable personal income, plus what looks like a stall in the economy.
The one-month breather on inflation may be welcome news in some quarters, but the underlying reasons for it are causes for alarm. We are not solving inflation through increased production but through the choking off of demand. That’s a recession, and it may have already arrived, regardless of what the last jobs report suggests.
“it may have already arrived”
Wow. Way to commit there, big boy.
Well … Joe did insist that inflation is at ZERO … *creepy whisper* … ZE-RO per-scent! Come on ma’aaaan … Joe’s made America Green and Great! You MAGAts need to look at the NUMBERS! ZEEEEEEEE-RO per-sent …
Hello, little girl … can grandpa touch you … ?
If people cannot pay for gas or food and do not have those things as a result, then, YES, there definitely is a recession.
A recession is when your neighbor loses their job.
A Depression is when YOU lose yours.
What’s the over/under on the number being revised upward in a month or two, when the final number comes out?
A few points to ponder.
August is a notoriously slow time for oil demand. The price of crude is starting to rise again suggesting the price drop was temporary (and due to lack of demand). Europe is not ready for winter. The Canada Pension Plan lost $23 billion last quarter in churning markets (private equity, credit and real estate).
Mid-July was probably peak inflation but it isn’t going away any time soon despite the Biden inflation freeze.
The SF Bay Area roads have been clearing of traffic. I believe people have been charging these inflated gasoline and food prices on their credit cards … and now … their cards are full … they can’t charge anymore. And the free food pantry’s are running out of food to hand out. However, there are still plenty of tents in parks, under freeways, and on the sidewalks.
Yeah … my EYE tells me all I need to know about the economy and falling demand for gasoline
A lot of people aren’t pulling +32ft RV’s to the far away destinations they normally would have this summer. Many are vacationing locally or just spending more time at home whether they can afford to or not based on common sense and distrust in Progressive directed economies.
You may be right. My last trip to Fort St. John was at the end of last month. While the Yellowhead is wild and woolly on long weekends, it wasn’t as bad this time as it was a year ago. There were a lot more holiday trailers on the highway then.
Well, if I hadn’t booked our Annual vacation to the Shushwap from Calgary, we’d be staying home too…
06 Duramax w/
Titan Tank @52 Gal
Slip Tank @ 30 Gal
4 – 5 Gal Jerry Cans
All filled with pricey Diesel…to pull our
27′ Citation Supreme 5th
$ 470 for the fill up last week.
I have ZERO plans on purchasing BC fuel….should have enough on board to do the 650km trip and bk.
To hell with BC Fuel pricing.
Still, given the absolutely Awesome weather we are having here and there… I’m looking forward to going..!!
God’s Country try here we come…once again..!!!
(Mind you, the 2 First born are up for sale…/s)
AS an aside…
Diesel at ones normal stns is ~ 1.639
Costco Calgary 1.519
BC Shushwap: Avg 1.919
Yea, screw BC fuel.
As I mentioned last week, diesel was $0.40/litre more in Fort St. John than in Edmonton.
We’ve been in a recession since January.
And now, Biden takes the lead on Democrat disinformation.
https://video.foxnews.com/v/6310731033112#sp=show-clips
Not just the worst president in history, also the dumbest.
Yet, GasBuddy data shows the opposite, consistent demand is increasing.
The US Government wouldnt LIE with their data, would they?
“One glaring mismatch is that the U.S. Energy Information Agency published data showing the U.S. gasoline demand has cratered while GasBuddy has data showing the exact opposite. GasBuddy simply adds up what gas stations sold and tell us that number. The EIA answers to the most brazenly political and dishonest administration of my lifetime. And that’s saying something.”
https://peakprosperity.com/eumergency-rhine-river-oil-and-vaccine-injuries/
It will be a Freezing Hell in most of the EU this coming winter.
They will all rue the day they shut down Coal Plants & Nukes…in favour of the Climatard notion of Solar & Wind…neither of which will produce an Amp of juice throughout said Winter.
Enjoy it Menschen….
Don’t believe the build numbers – it is being manipulated. As well they have been taking large draws from the strategic reserve that must be replenished. It is highly likely there is a lot more pain coming at the pumps. Historically you don’t tame inflation until interest rates and the rate of inflation are comparable. And that only works if stop the money printing. It is probably going to be nasty.