05142021 :: Friday finance

A partial digest

Philip Valenta, MSF


There is a simple factor contributing majorly to the steep inflation number of 4.2% for the 12 months (UA) ending April 2021; oil prices were negative one year ago April, and the industry was cratering. The energy category, along with its subcategories, had the highest numbers in the BLS’s latest report. Gasoline alone for the 12 months ending April 2021 saw a nearly 50% rise.

The Fed and others should know this; and the jump in official inflation figures will prove fleeting.

By May 2020, crude oil was recovering, though gasoline took longer. This should make for milder inflation numbers moving forward.

Elsewhere, US retail and food service sales for April were lackluster; they essentially did not change from the previous month. This lends credence to the possibility that there is no consumer spending binge incoming, but also that there is no driver in this arena for systemic inflation.

People are still struggling without additional stimulus. Now, they are also in danger of losing supplemental federal UI benefits as certain state governors sever their states’ ties to the programs in a bid to forcibly coerce laborers back into the workforce for employers who do not wish to engage in market competitive behavior like raising wages. A recent report indicates that some $100