Sales of new single-family houses fall 24% from a year ago. The lower end has died.
But it still won’t cover the dollar’s actual loss of purchasing power.
CPI inflation remains at 12-year high.
And those who experienced the 1970s & 1980s inflation as adults expect 6.0% inflation a year from now.
Producer prices that are input prices for consumer-facing industries are red-hot. But further up the production chain, prices are white-hot.
“We need lower consumer demand to give supply chains time to catch up… recover efficiency… and break this vicious circle”: CEO of Maersk’s APM Terminals, one of the largest container port operators.
Free money destroyed the pricing mechanism, and demand has soared despite much higher prices.
Enough consumers, flush with free money, suddenly eager to pay those high prices, particularly for big-ticket items they didn’t have to buy. Magic Mix.
Pay More, Get Less. Spending on durable goods after inflation down 10% from historic spike. But services surged, pointing to next source of inflation.
His “taper” discussion — tapering starts this year — got all the attention, but his focus was on inflation.