Core CPI Higher Than Expected
From Bloomberg:
U.S. May Consumer Prices Rise 0.4%; Core Rises 0.3%
Rising gasoline costs and rents propelled U.S. consumer prices higher last month, increasing speculation that Federal Reserve policy makers will raise interest rates later this month.
Prices paid by Americans rose 0.4 percent after April's 0.6 percent increase, the Labor Department said in Washington. Excluding food and fuel, so-called core prices rose a larger- than-forecast 0.3 percent for a third straight month. Core inflation over the last three months was the highest since 1995.
``The implication now is that we could see people start to be concerned about further rate hikes moving forward,'' said Jason Schenker, economist at Wachovia Corp. in Carlotte, North Carolina. ``It looks like we could see higher fed funds rates potentially moving forward.''
...
Economists expected a 0.4 percent increase in the consumer price index, based on the median of 77 forecasts in a Bloomberg News survey. Forecasts ranged from increases of 0.2 percent to 0.6 percent. Core prices were forecast to rise 0.2 percent.
20 Comments:
richard,
The next core-CPI change will be ex-food ex-energy and EX-SHELTER.
That should fix this inflation problem.
Ray
Sit on the sidelines if you can--watch this slow motion, live action correction unravel! Pain, pain, pain if you bought the hype. Opportunity if you have lived as a contrarian.
WM
Of course things are just rosy. Chain store sales are up 4.0% over last year and total retail sales are up 9.1% excluding autos.
And in NYC, most don't think anything of spending $300 for a pair of jeans every few days & $80 for a 'polo' shirt. The ones at Lord & Taylor (with the coupon) are too downscale for their taste.
This as real wages are down and housing is becoming unaffordable for all but those who make in the six figures.
It's a scary reality--you must have two outsized incomes or one obscene income to prosper here.
WM
2 Six figure incomes to live outside of Manhattan, or a single person making over $200,000 to survive.
Someone making just $75,000 - $100,000 a year can barely afford rent on a studio apartment in Suffolk county and won't qualify for 80% of available rentals anywhere in the NYC metro area including NNJ, or any of the 5 boros.
"Someone making just $75,000 - $100,000 a year can barely afford rent on a studio apartment in Suffolk county and won't qualify for 80% of available rentals anywhere in the NYC metro area including NNJ, or any of the 5 boros.
6/14/2006 10:25:12 AM "
What kind of whacked out reality are you in? You can find 1BR apartments for $1000 in Flushing, Astoria, College Point. Granted, these aren't the most prestigous neighborhoods, but some sections are acceptable. I don't know much about the other boroughs, but I can't imagine why someone making $75K couldn't afford renting an apartment in NY's outer boroughs.
I'm sitting pretty in a rent stabilized building and I'm not going to budge until I see at least a 20% correction.
If you have kids, you can't live in a one bedroom, you can't pioneer too much, you must pay daycare to work, you may have to have parochial or private schooling if you live in an uneven town, etc. It adds up quickly to needing six figures to survive and more to prosper. That's sizable double incomes in the world where I live.
WM
delford said...
But If divorce is going to keep demand strong for housing, than there fgoes the two income theroy right?
6/14/2006 10:12:35 AM
hilarious!
Think about the 2 income families with a combined income of only $100,000! About 20-25% of that is spent on childcare if they are not in 1st grade yet!
There are no 1 bedroom apartments in Astoria, Flushing or Forest Hills for less than $1,500 a month.
$1,000 will buy a small studio.
But these wealthy hipsters & transplants who have unlimited money have no problem with paying $1,500 - $2,000 a month in Queens plus the 15% real estate agents fee.
Rents have taken off and are rising with home prices.
Rental vacancies all across the 5 boros and NYC metro area are at record lows and under 1% in Manhattan.
My rent has remained unchanged for many years (we'll see an annual increase of $15 or so a month, for example).
Another $30,000 price drop on this one in Ridgewood:
http://www.realtor.com/Prop/1055678619
I think it's on a half-acre.
Any idea why this house has been sitting so long? Sure, it's expensive, but it's almost twice the house for properties currently on the market in this range.
FYI,
Beige Book on Housing mentions NJ specifically.
From the Fed's Beige Book Summary:
Residential real estate markets continued to cool across much of the country--with most Districts reporting slower homebuilding and sales of existing homes. In contrast, commercial real estate activity continued to strengthen in most Districts. A few reports noted concern about too much building.
Some softening of the market for existing homes was reported by ten Districts--Chicago, Cleveland, Dallas, Kansas City, Philadelphia, Minneapolis, New York, Richmond, St. Louis, and San Francisco. Dallas and Richmond noted that activity remained quite strong, and Chicago reported slowing from high levels. San Francisco reports hot housing markets in Utah and parts of the Pacific Northwest. Several Districts said sales had weakened for some of the most expensive homes, except in the Dallas District where demand for lower-priced homes "had dipped noticeably." Atlanta reported that residential sales were near year-ago levels in most parts of the District, but that sales weakened and inventories increased in Florida. The Philadelphia District said sales of homes in resort areas have declined sharply. The New York District reports a sharp deceleration in prices in the suburbs around New York City, but a tightening of the Manhattan rental markets.
Homebuilding slowed in most Districts--Chicago, Cleveland, Dallas, Kansas City, New York, Philadelphia, St. Louis, and San Francisco. The New York District reported that some homebuilders in New Jersey are withdrawing from the authorization process and allowing their options to build to expire, noting that increases in fuel and materials costs are pinching profits. Homebuilders in the Atlanta District reported that single-family home construction was near year-ago levels in most parts of the District, except in Florida, where sales slowed. The Atlanta District also reported that Florida condominium sales continued to weaken and several projects were cancelled.
I forgot the link.
http://www.federalreserve.gov/fomc/beigebook/2006/20060614/default.htm
gsmls @ 30,900
Inventory grows by 'only' 52 in the past 24 hours.
{{{What kind of whacked out reality are you in? You can find 1BR apartments for $1000 in Flushing, Astoria, College Point. Granted, these aren't the most prestigous neighborhoods, but some sections are acceptable. I don't know much about the other boroughs, but I can't imagine why someone making $75K couldn't afford renting an apartment in NY's outer boroughs}}}}
You obviously have not looked for housing in any of the 5 boros in NYC or the suburbs if you want to believe that statement above.
Not only do you need to pay a few months rent upfront, you typically need to pay a brokers fee of 15% - 30% of the annual rent. Most landlords do not deal directly with tenants.
'Owners Equivalent Rent' rose by 0.6% the highest percentage in 16 yeras.
And if someone wanted to live in a 'prestigous neighborhood' they would live on Park Avenue or 5th Avenue in the 60's or 70's....
Actual working people who don't have trust funds or mommy & daddy to pay rent don't give a shit about prestige but are more worried about finding a reasonably safe place to live that is within a 2 hour commute of their workplace.
my goodness
who in their right mind would
want to live in queens or for that
matter NY. Period.
$1,000 per month ,,, live in a closet or the street with all
the foreign waste.
Its worst than NJ.
I like Wallington BC. Great town.
Who are you, John Rocker?
all i know is im glad
i got out from under with
my house,,, nice,,
took it off the table.
nice to rent for a while
and watch this unfold.
New Jersey,,home of one of the most corrupt govs. going.
and of course the highest tax
structure.
Go down to Newark airoport and watch
them arrive..
Meh. I had a pretty nice 2br apt in St. George SI for $1100. Back yard and everything. If you know where to look and where to avoid, there is reasonably affordable housing in the outer boros.
Taxes, utilities, insurance, costs of goods and services, private schooling, etc. are other matters entirely :p
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