Episode summary
Inflation Report: It’s Not Just Gas Anymore
Summary
The host argues that the latest inflation report was not just a gas story, even though energy was the biggest driver. Consumer prices rose 3.7% versus 3.6% expected, gas jumped 9.1% in the month and 74% year over year, and the host says the old tool of releasing reserves to suppress fuel prices is no longer available. He also points to airfare, used cars, apparel, toys, streaming services, and hospital services as evidence that price pressures are broader than energy.
The host says inflation has now been above 2% for 66 months in a row, which he calls the third-longest stretch since 1948. He compares the current period with the long inflation run from 1966 to 1986, which he says helped the country inflate away postwar debt. He frames inflation in personal terms, saying he used to think about it in candy bars and now thinks about it in gas.
Beyond the data, the host focuses on political consequences. He argues that when wages do not keep up with prices, inflation fuels instability and blame shifts to whoever is in power. He says the bigger concern is not a one-tenth point miss on inflation, but the way persistent price pressure can feed broader unrest and anti-capitalist sentiment.
Key takeaways
- The host says CPI rose 3.7% versus 3.6% expected, with gas up 9.1% in one month and 74% year over year.
- The host argues inflation is broader than energy because airfare, used cars, apparel, toys, streaming services, and hospital services also rose.
- The host says inflation has stayed above 2% for 66 straight months, the third-longest stretch since 1948.
- The host thinks the bigger market risk is political instability from wages lagging prices, not the headline miss itself.
Notable quotes
“Consumer prices were up 3.7%. Economists had expected 3.6%. And you know, energy, of course, is the big culprit”
“Gas prices are up a shocking 9.1% from the prior month. I mean, that's crazy. And up 74% since last September”
“What caught people by surprise on this one was that it was wider than energy”
“Inflation has been above 2% in 66 monthly readings now, which is the third longest run since 1948”
“The problem is inflation is bad, but inflation where your wages don't keep up with the inflation, that just causes political instability, doesn't it”
How the episode opens
Good morning. This's Dylan Jovine, over behind the market tap. It's Friday, TGIF.
Today is Friday, October 16th. Today, I like to end the week talking about this inflation report that we saw earlier in the week on Wednesday. It came in pretty hot, and I've had a couple days to digest that.
I really wanted to share some of my thoughts with you on this, cuz it's very important for us as investors, and obviously created a very ugly day for the NASDAQ couple days this week. So, we see that the inflation numbers came in. Consumer prices were up 3.7%.
Economists had expected 3.6%. And you know, energy, of course, is the big culprit. Gas prices are up a shocking 9.1% from the prior month.
I mean, that's crazy. And up 74% since last September. And you know, what presidents do of both parties is they flood the market with our domestic gas, the reserves.
But we've kind of run We've actually used that one. Bad timing, I guess, on the president's part. You know, Biden does it before an election.
Obama does it before an election. Trump did it before an election. Whenever you have This is just the nature of the game, but I guess we've run out of that, and now we can't artificially suppress gas prices.
So, gas prices rose 9.1% from the prior month. We're feeling this at the pump. Up 74% since last September.
Thankfully, food prices were flat from the prior month. And you know, think about it, food has a lot of transportation costs in that. So, we want to keep an eye on that.
You know, the higher energy goes, the more that filters through in transportation cost, the higher our food bill will be. Of course, other airline sensitive or energy sensitive things were up.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- inflation report
- gas prices
- consumer prices
- fed policy
- political instability
Watch the episode
Watch “Inflation Report: It’s Not Just Gas Anymore” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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