Dow went up 104, advancers barely ahead of decliners & NAZ fell 48. The MLP index was a tad lower at 182 & the REIT index added 1to the 444s. Junk bond funds were about even & Treasuries saw heavy buying, Oil was off chump change in the 74s & gold added 2 to 1759.
AMJ (Alerian MLP index tracking fund)
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Inflation ran at a fresh 30-year high in Aug as supply chain disruptions & extraordinarily high demand fueled ongoing price pressures, the Commerce Dept reported. The core personal consumption expenditures price index, which excludes food & energy costs, & is the Federal Reserve's preferred measure of inflation, increased 0.3% for the month & was up 3.6% from a year ago. The monthly gain was slightly higher than the 0.2% estimate & the annual forecast of 3.5%. That's the highest since 1991 & reflective of inflationary pressures that Fed Chair Jerome Powell said earlier this week he finds “frustrating.” On a headline basis, PCE prices rose 0.4% for the month & 4.3% year over year, the highest since 1991, reflecting a 24.9% increase in energy prices & a 2.8% rise in food. Goods prices rose by 5.5% while services increased by 3.6%. The rise in inflation came as personal income increased 0.2% for the month, in line with estimates but indicative that real income is falling as inflation rises. Spending accelerated 0.8%, slightly above the 0.7% forecast. Personal savings totaled $1.7T, running at a 9.4% rate & a decrease from 10.1% in Jul. The savings rate peaked at 33.8% in Apr 2020 in the early days of the pandemic as the gov rushed out payments to individuals & businesses were shut down to combat the Covid spread.
Key inflation gauge watched by the Federal Reserve hits another 30-year high
Consumer spending accelerated last month despite an uptick in Covid cases & the core personal consumption expenditures price index, the Federal Reserve's preferred inflation measure, hitting a fresh 30-year high for the 3rd straight month. Personal income rose 0.3% on a monthly basis, outpacing the 0.2% month-over-month increase expected, while consumer spending rose 0.8% in Aug, up from 0.1% in Jul & slightly above the forecast of 0.6%, the Commerce Dept reported. That suggests consumers dug into their savings to fuel more spending on items like clothes & groceries, & to spend more online, even as the delta variant caused them to pull back on traveling & eating out. Consumer prices increased 0.4% in Aug from Jul, the same increase as the previous month. Core PCE, which excludes food & energy, rose 3.6% year-over-year in Aug, according to the Bureau of Economic Analysis. In the past year, inflation rose 4.3%, up slightly from the previous month & the highest in more than 3 decades. The latest readings come as a growing number of companies are facing unprecedented supply chain bottlenecks due to the spread of the delta variant & have raised their prices in an effort to combat higher shipping & labor costs. Federal Reserve Chair Jerome Powell said yesterday that supply chain disruptions, such as jammed ports on the West Coast & factory shutdowns in Asia amid COVID spikes, have lasted longer than the Fed expected. Keeping prices stable is one of the Fed's mandates, along with seeking maximum employment. Still, Powell said he expected supply chain problems to start improving next year, which would start to push inflation lower in H1-2022.
Consumer spending accelerates as Fed's inflation measure hits fresh 30-year high
House Speaker Nancy Pelosi is planning to hold a vote on a stalled bipartisan infrastructure bill today, after the bill failed to win enough support from progressives to pass last night. She began the day with an emboldened progressive caucus & growing frustration among her rank-&-file members at the prospect of continued negotiations over the weekend. Even direct involvement by Pres Biden on yesterday was not enough to break the intra-party stalemate that threatens his entire domestic agenda. Shortly before midnight, it became clear that neither Biden nor Dem leaders in Congress had managed to convince a group of progressive House members to back the bill. Where the talks go from here is anyone's guess.
Pelosi aims to hold House infrastructure vote Friday as progressives, moderates continue talks
Chaos continues for investors. High inflation remains a worry & threatens the economic recovery which has been going well. The massive spending bills in congress are still stuck in the mud. Playing games with political considerations dominates everybody's thinking. Seemingly a group of 8 year olds could get more done. Slopping enormous amounts of money to buy favor is not smart but it shows the people in control don't know what they are doing or even care about taxpayers. This behavior is sending bad signals for the stock market!!
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