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Fuel[1] accounted for a substantial portion of the overall lift, we've actually come in under expected inflation which is why you're seeing markets up today. G

Fuel[1] accounted for a substantial portion of the overall lift, we've actually come in under expected inflation which is why you're seeing markets up today. Gasoline, unleaded regular - +48.8% (+20.1% over last month) [1]https://www.bls.gov/news.release/cpi.nr0.htm https://www.bls.gov/news.release/cpi.nr0.htm

chasd00 5y ago
> Gasoline, unleaded regular - +48.8% (+20.1% over last month) i called the bottom on oil during the worst of the pandemic but did nothing about it :( EDIT: i also sold apple at $10/share, i am not good at trading hah
taylodl 5y ago
Yeah but that headline doesn't generate as many clicks! War increases inflation! News at 11:00!
- typeofhuman 5y ago
  Inflation was steadily rising before Russia invaded Ukraine. Also a US President who is antithetical to the oil/lng industry will drive up the price of oil through the futures market. Demand is still high, Biden has constrained supply, forcing futures prices to go up. Trump was bullish on oil/lng, with the same demand and increased supply, prices went down.
  - ______-_-______ 5y ago
    The biggest perk of being president is the dial under your desk you can turn to raise or lower gas prices
    - typeofhuman 5y ago
      I suggest you read my longer root level comment on this post. It'll help you understand how the actions of a president can affect oil futures.
    - macilacilove 5y ago
      That dial exists and it calls the Saudi king and reminds him that he wants to increase oil production if he prefers himself untoppled.
      - JumpCrisscross 5y ago
        > it calls the Saudi king and reminds him that he wants to increase oil production if he prefers himself untoppled America no longer supports the House of Saud. It tolerates it. But were it to face a serious threat, apart from a Wahhabi fundamentalist, the U.S. would be unlikely to intervene. Riyadh knows this, which is why those calls aren’t very useful. That said, the President does have dials. They are drilling permits and import restrictions.
        cthalupa 5y ago
        >They are drilling permits and import restrictions. I'll focus just on the first half: Less than 10% of oil drilling happens on Federal land, and there are thousands of unused permits available. Which isn't to say that these thousands of permits could be drilled on tomorrow - they are subject to environmental impact studies, lawsuits from locals for dozens of reasons, supply chain issues around equipment, etc. Which is a long way of saying: This particular dial is very indirect, at best.
  - photochemsyn 5y ago
    The fact that Obama/Biden worked with Republicans to lift the ban on crude oil exports in 2015 is a major factor in the rise of gasoline and diesel prices, along with the closure of several major domestic refineries since then. Additionally, there's the push to expand LNG exports to Europe. Both of these are major factors in the price rise. I personally don't really care about this as I don't own a car, and this will push new buyers towards EVs, but the media silence on this is kind of instructive - corporate media is owned by the same investors profiting off the high energy prices, so there's no incentive for honest reporting, not if you want to keep your media job anyway.
  - JaimeThompson 5y ago
    The oil companies have been a bit slow to increase production on some of their existing, approved, active leases because why should they? They are making incredible profits right now and are buying back billions of their own stock. Seems to me if they wanted to increase production a lot they would decrease the stock buy backs and instead increase future revenue by increasing current and near future production.
zaroth 5y ago
The market is “up” mostly because the USD is down, not because real values are rising. USD value is going to be hit extremely hard as it loses reserve currency status. The days of the petrodollar have come to an end. It will be a typical “closing the barn doors after the horses have bolted” response which will only make things worse. This is actively happening now, the big holders are just trying to do it quietly to get out as much as possible before the US tries to shut it down and USD fully tanks. As this happens the market valuations will appear to rise in nominal values. If you value the market in gallons of unleaded or dozens of eggs however you will see a different story. There’s only so many years the politicians can claim it’s a “supply shock”.
- JumpCrisscross 5y ago
  > the USD is down The dollar is approaching a 3-year high [1]. It is up close to 9% over the past year. [1] https://www.wsj.com/market-data/quotes/index/DXY/ https://www.wsj.com/market-data/quotes/index/DXY/
  - zaroth 5y ago
    What do you think that chart is showing? How do you square it with a chart of USD value versus an asset which has held consistent value for millennia? https://www.kitco.com/charts/popup/au1825nyb.html https://www.kitco.com/charts/popup/au1825nyb.html
    - JumpCrisscross 5y ago
      > What do you think that chart is showing? The U.S. dollar index, “an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies” [1]. > How do you square it with a chart of USD value versus an asset which has held consistent value for millennia? Gold has appreciated relative to the dollar since its 2016 low. Granted, it took until 2020 for gold to regain its ca. 2013 price. That doesn’t translate into any information about inflation in that interval. Nor about U.S. export/import balances or the dollar’s strength. Unless you’re in the gold business, gold prices are a facile measure of anything economically useful. [1] https://en.m.wikipedia.org/wiki/U.S._Dollar_Index https://en.m.wikipedia.org/wiki/U.S._Dollar_Index
antattack 5y ago
Due to Covid many of us probably drive a lot less (working from home) so gasoline prices are not a big deal. However people in service sector jobs are likely affected by fuel costs.
- typeofhuman 5y ago
  Everything you consume is delivered by an 18-wheeler that requires heaps of fuel.
  - dragontamer 5y ago
    Actually, trains in most cases. The last mile is trucks, but the backbone of America is our world class rail system.
    - sethherr 5y ago
      Indeed, world class shipping rail system. Our passenger rail is depressingly subpar.
    - throwaway0a5e 5y ago
      >Actually, trains in most cases. The last mile is trucks, More like last 50-100mi. Where's your "local" intermodal yard?
    - hadlock 5y ago
      Do you have any stats on this? As I have read (casually) trucking has been 60-80% of consumer goods delivery (end-to-end), and only in the last 3-5 years has rail started picking up long haul freight, as shipping dry goods like coal has become less lucrative.
  - raisedbyninjas 5y ago
    Not a big component. For example for the retail price of food 4% is for transportation costs. https://www.ers.usda.gov/webdocs/publications/44825/7758_err114_reportsummary.pdf?v=3675.8 https://www.ers.usda.gov/webdocs/publications/44825/7758_err...
nightski 5y ago
Hmm, CPI rose to 8.5% instead of the 8.4% estimate. Not sure where you are getting "under expected" from. Also, inflation isn't necessarily bad for markets. What markets don't like is if the fed has to respond.
- odonnellryan 5y ago
  They are probably referring to core inflation... also fuel contributed massively to inflation in March, which was expected, but not expected to stay high forever.
  - nightski 5y ago
    Of course, but the highest contributor was shelter/housing. Also if they are referring to core it's kind of important to make that distinction. It's not good to be loose with terminology around this just to make an argument stronger than it really is.
- bachmeier 5y ago
  The CPI includes energy prices.
- matwood 5y ago
  YoY which everyone knew was going to be high. Core month to month shows inflation is slowing. I think a lot of people have this doom fantasy of runaway inflation in the US, but it's likely to slow down quicker than people realize. Monetary supply is tightening (mortgage rates touching 5% now), and the supply chain is slowly getting back to normal. Heck, even gas prices have reversed where I am.
  - nightski 5y ago
    I agree it may be slowing, but that's not what the parent asserted. I was just pointing out a mistake in their post. No where did they state "core" (unless it has been edited).
  - 01100011 5y ago
tdehnel 5y ago
Is the implication “it’s not that bad”? I’m sorry but I disagree. Do you have an explanation for why the increased price of gasoline won’t just infect prices for all the goods and services which depend on it? Any business which needs to move people or goods over the road, or runs equipment/vehicles on gas is going to be affected. Not to mention the fact that consumers will have less disposable income to spend on things. And businesses may have to pay their workers more to account for that loss of disposable income. Edit: see “wage price spiral”
- ceejayoz 5y ago
  > Do you have an explanation for why the increased price of gasoline won’t just infect prices for all the goods and services which depend on it? It will, but the price of oil has already dropped substantially from the recent peak, and probably will continue to do so.
- dahart 5y ago
  > Do you have an explanation for why the increased price of gasoline won’t just infect prices for all the goods and services which depend on it? The price of gas is known to be volatile, it has gone up in the past without bringing the entire economy along with it, and also has gone down many times without making everything cheaper. The prices of retail goods don’t adjust instantaneously, and gas may well be below what it is now by this time next year. The price of gas might be a small minority fraction of the cost of producing most retail goods as well, so there’s no reason to assume that consumers will tolerate compensatory price hikes that blame gas while the price is falling. This is the reason that the US Department of Labor excludes the price of gas as one of the core indicators of inflation, because the price of gas does not always reflect inflation, and frequently changes for other reasons independent of inflation.
- iso1210 5y ago
  Today's US gas price is about $4/gal [0], about 15% up on 2011[1], or about 1% per year. That doesn't sound like rampant inflation, it does sound like a market correction. Now in reality gas prices globally is high because of Ukraine and Russia, which hides the massive gas deflation over the last decade, but if 2011 businesses could afford gas at $3.50, I'm not sure why 2022 businesses can't afford it at $4. Wages are up about 30% in the same time period (well by 2020) [2] [0] https://gasprices.aaa.com/ https://gasprices.aaa.com/ [1] https://business.time.com/2011/12/20/2011-is-priciest-year-ever-for-gasoline-3-53-per-gallon-over-4k-spent-per-household/ https://business.time.com/2011/12/20/2011-is-priciest-year-e... [2] https://www.ssa.gov/oact/cola/awidevelop.html https://www.ssa.gov/oact/cola/awidevelop.html
bko 5y ago
Usually if official statistics and what you see are misaligned, its the official statistics that are wrong. What's your general impression regarding price levels in the US? How much has your grocery bill gone up? How about rent? What about restaurant bills? Services like haircuts? Whats your credit card bill look like, excluding gasoline? Personally I have seen prices go up well above 10%. Inflation metrics are complicated and there is a huge incentive to keep the official numbers down as they affect trillions in spending in terms of social security and other numbers tied to official inflation. To put this number in context, Congress gave themselves a 21% increase in House office budgets to account for inflation
- JumpCrisscross 5y ago
  > Congress gave themselves a 21% increase in House office budgets to account for inflation For staffers. Not members of Congress [1]. Never officially tied to inflation. [1] https://www.factcheck.org/2022/03/spending-bill-includes-pay-raise-for-staffers-not-members-of-congress/ https://www.factcheck.org/2022/03/spending-bill-includes-pay...
  - bko 5y ago
    Right, that's what I said. For office budgets. I didn't say it was for them. I got the numbers from that exact website. It's not "officially tied to inflation" but obviously if you increase budgets its due to higher costs.
    - jlmorton 5y ago
      > but obviously if you increase budgets its due to higher costs That isn't remotely obvious and in this case is very obviously not true. This is a chronically underfunded program that Democrats have been lobbying to increase for years. AOC, for instance, has been pushing for this since she first entered Congress, well before any inflation showed up. It's entirely disingenuous to point to a budget increase in a single extremely-small Congressional staff program and paint it as evidence of broad-based inflation.

chasd00 5y ago

> Gasoline, unleaded regular - +48.8% (+20.1% over last month) i called the bottom on oil during the worst of the pandemic but did nothing about it :( EDIT: i also sold apple at $10/share, i am not good at trading hah

taylodl 5y ago

Yeah but that headline doesn't generate as many clicks! War increases inflation! News at 11:00!

typeofhuman 5y ago
Inflation was steadily rising before Russia invaded Ukraine. Also a US President who is antithetical to the oil/lng industry will drive up the price of oil through the futures market. Demand is still high, Biden has constrained supply, forcing futures prices to go up. Trump was bullish on oil/lng, with the same demand and increased supply, prices went down.
- ______-_-______ 5y ago
  The biggest perk of being president is the dial under your desk you can turn to raise or lower gas prices
  - typeofhuman 5y ago
    I suggest you read my longer root level comment on this post. It'll help you understand how the actions of a president can affect oil futures.
  - macilacilove 5y ago
    That dial exists and it calls the Saudi king and reminds him that he wants to increase oil production if he prefers himself untoppled.
    - JumpCrisscross 5y ago
      > it calls the Saudi king and reminds him that he wants to increase oil production if he prefers himself untoppled America no longer supports the House of Saud. It tolerates it. But were it to face a serious threat, apart from a Wahhabi fundamentalist, the U.S. would be unlikely to intervene. Riyadh knows this, which is why those calls aren’t very useful. That said, the President does have dials. They are drilling permits and import restrictions.
      - cthalupa 5y ago
        >They are drilling permits and import restrictions. I'll focus just on the first half: Less than 10% of oil drilling happens on Federal land, and there are thousands of unused permits available. Which isn't to say that these thousands of permits could be drilled on tomorrow - they are subject to environmental impact studies, lawsuits from locals for dozens of reasons, supply chain issues around equipment, etc. Which is a long way of saying: This particular dial is very indirect, at best.
- photochemsyn 5y ago
  The fact that Obama/Biden worked with Republicans to lift the ban on crude oil exports in 2015 is a major factor in the rise of gasoline and diesel prices, along with the closure of several major domestic refineries since then. Additionally, there's the push to expand LNG exports to Europe. Both of these are major factors in the price rise. I personally don't really care about this as I don't own a car, and this will push new buyers towards EVs, but the media silence on this is kind of instructive - corporate media is owned by the same investors profiting off the high energy prices, so there's no incentive for honest reporting, not if you want to keep your media job anyway.
- JaimeThompson 5y ago
  The oil companies have been a bit slow to increase production on some of their existing, approved, active leases because why should they? They are making incredible profits right now and are buying back billions of their own stock. Seems to me if they wanted to increase production a lot they would decrease the stock buy backs and instead increase future revenue by increasing current and near future production.

zaroth 5y ago

The market is “up” mostly because the USD is down, not because real values are rising. USD value is going to be hit extremely hard as it loses reserve currency status. The days of the petrodollar have come to an end. It will be a typical “closing the barn doors after the horses have bolted” response which will only make things worse. This is actively happening now, the big holders are just trying to do it quietly to get out as much as possible before the US tries to shut it down and USD fully tanks. As this happens the market valuations will appear to rise in nominal values. If you value the market in gallons of unleaded or dozens of eggs however you will see a different story. There’s only so many years the politicians can claim it’s a “supply shock”.

JumpCrisscross 5y ago
> the USD is down The dollar is approaching a 3-year high [1]. It is up close to 9% over the past year. [1] https://www.wsj.com/market-data/quotes/index/DXY/ https://www.wsj.com/market-data/quotes/index/DXY/
- zaroth 5y ago
  What do you think that chart is showing? How do you square it with a chart of USD value versus an asset which has held consistent value for millennia? https://www.kitco.com/charts/popup/au1825nyb.html https://www.kitco.com/charts/popup/au1825nyb.html
  - JumpCrisscross 5y ago
    > What do you think that chart is showing? The U.S. dollar index, “an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies” [1]. > How do you square it with a chart of USD value versus an asset which has held consistent value for millennia? Gold has appreciated relative to the dollar since its 2016 low. Granted, it took until 2020 for gold to regain its ca. 2013 price. That doesn’t translate into any information about inflation in that interval. Nor about U.S. export/import balances or the dollar’s strength. Unless you’re in the gold business, gold prices are a facile measure of anything economically useful. [1] https://en.m.wikipedia.org/wiki/U.S._Dollar_Index https://en.m.wikipedia.org/wiki/U.S._Dollar_Index

antattack 5y ago

Due to Covid many of us probably drive a lot less (working from home) so gasoline prices are not a big deal. However people in service sector jobs are likely affected by fuel costs.

typeofhuman 5y ago
Everything you consume is delivered by an 18-wheeler that requires heaps of fuel.
- dragontamer 5y ago
  Actually, trains in most cases. The last mile is trucks, but the backbone of America is our world class rail system.
  - sethherr 5y ago
    Indeed, world class shipping rail system. Our passenger rail is depressingly subpar.
  - throwaway0a5e 5y ago
    >Actually, trains in most cases. The last mile is trucks, More like last 50-100mi. Where's your "local" intermodal yard?
  - hadlock 5y ago
    Do you have any stats on this? As I have read (casually) trucking has been 60-80% of consumer goods delivery (end-to-end), and only in the last 3-5 years has rail started picking up long haul freight, as shipping dry goods like coal has become less lucrative.
- raisedbyninjas 5y ago
  Not a big component. For example for the retail price of food 4% is for transportation costs. https://www.ers.usda.gov/webdocs/publications/44825/7758_err114_reportsummary.pdf?v=3675.8 https://www.ers.usda.gov/webdocs/publications/44825/7758_err...

nightski 5y ago

Hmm, CPI rose to 8.5% instead of the 8.4% estimate. Not sure where you are getting "under expected" from. Also, inflation isn't necessarily bad for markets. What markets don't like is if the fed has to respond.

odonnellryan 5y ago
They are probably referring to core inflation... also fuel contributed massively to inflation in March, which was expected, but not expected to stay high forever.
- nightski 5y ago
  Of course, but the highest contributor was shelter/housing. Also if they are referring to core it's kind of important to make that distinction. It's not good to be loose with terminology around this just to make an argument stronger than it really is.
bachmeier 5y ago
The CPI includes energy prices.
matwood 5y ago
YoY which everyone knew was going to be high. Core month to month shows inflation is slowing. I think a lot of people have this doom fantasy of runaway inflation in the US, but it's likely to slow down quicker than people realize. Monetary supply is tightening (mortgage rates touching 5% now), and the supply chain is slowly getting back to normal. Heck, even gas prices have reversed where I am.
- nightski 5y ago
  I agree it may be slowing, but that's not what the parent asserted. I was just pointing out a mistake in their post. No where did they state "core" (unless it has been edited).
- 01100011 5y ago

tdehnel 5y ago

Is the implication “it’s not that bad”? I’m sorry but I disagree. Do you have an explanation for why the increased price of gasoline won’t just infect prices for all the goods and services which depend on it? Any business which needs to move people or goods over the road, or runs equipment/vehicles on gas is going to be affected. Not to mention the fact that consumers will have less disposable income to spend on things. And businesses may have to pay their workers more to account for that loss of disposable income. Edit: see “wage price spiral”

ceejayoz 5y ago
> Do you have an explanation for why the increased price of gasoline won’t just infect prices for all the goods and services which depend on it? It will, but the price of oil has already dropped substantially from the recent peak, and probably will continue to do so.
dahart 5y ago
> Do you have an explanation for why the increased price of gasoline won’t just infect prices for all the goods and services which depend on it? The price of gas is known to be volatile, it has gone up in the past without bringing the entire economy along with it, and also has gone down many times without making everything cheaper. The prices of retail goods don’t adjust instantaneously, and gas may well be below what it is now by this time next year. The price of gas might be a small minority fraction of the cost of producing most retail goods as well, so there’s no reason to assume that consumers will tolerate compensatory price hikes that blame gas while the price is falling. This is the reason that the US Department of Labor excludes the price of gas as one of the core indicators of inflation, because the price of gas does not always reflect inflation, and frequently changes for other reasons independent of inflation.
iso1210 5y ago
Today's US gas price is about $4/gal [0], about 15% up on 2011[1], or about 1% per year. That doesn't sound like rampant inflation, it does sound like a market correction. Now in reality gas prices globally is high because of Ukraine and Russia, which hides the massive gas deflation over the last decade, but if 2011 businesses could afford gas at $3.50, I'm not sure why 2022 businesses can't afford it at $4. Wages are up about 30% in the same time period (well by 2020) [2] [0] https://gasprices.aaa.com/ https://gasprices.aaa.com/ [1] https://business.time.com/2011/12/20/2011-is-priciest-year-ever-for-gasoline-3-53-per-gallon-over-4k-spent-per-household/ https://business.time.com/2011/12/20/2011-is-priciest-year-e... [2] https://www.ssa.gov/oact/cola/awidevelop.html https://www.ssa.gov/oact/cola/awidevelop.html

bko 5y ago

Usually if official statistics and what you see are misaligned, its the official statistics that are wrong. What's your general impression regarding price levels in the US? How much has your grocery bill gone up? How about rent? What about restaurant bills? Services like haircuts? Whats your credit card bill look like, excluding gasoline? Personally I have seen prices go up well above 10%. Inflation metrics are complicated and there is a huge incentive to keep the official numbers down as they affect trillions in spending in terms of social security and other numbers tied to official inflation. To put this number in context, Congress gave themselves a 21% increase in House office budgets to account for inflation

JumpCrisscross 5y ago
> Congress gave themselves a 21% increase in House office budgets to account for inflation For staffers. Not members of Congress [1]. Never officially tied to inflation. [1] https://www.factcheck.org/2022/03/spending-bill-includes-pay-raise-for-staffers-not-members-of-congress/ https://www.factcheck.org/2022/03/spending-bill-includes-pay...
- bko 5y ago
  Right, that's what I said. For office budgets. I didn't say it was for them. I got the numbers from that exact website. It's not "officially tied to inflation" but obviously if you increase budgets its due to higher costs.
  - jlmorton 5y ago
    > but obviously if you increase budgets its due to higher costs That isn't remotely obvious and in this case is very obviously not true. This is a chronically underfunded program that Democrats have been lobbying to increase for years. AOC, for instance, has been pushing for this since she first entered Congress, well before any inflation showed up. It's entirely disingenuous to point to a budget increase in a single extremely-small Congressional staff program and paint it as evidence of broad-based inflation.