Breaking down the CPI, First-time Homebuyers, Florida Housing, Jobs and Robots, Breaking Up and 78 Days.
CPI
As all of you know, that stands for the Consumer Price Index.
It came in at 2.4% year over year for the ‘everything’ measurement, down from 2.5%.
It’s getting much closer to that 2% target the fed is looking for. That’s good news.
However… the core – which excludes food and fuel – went higher and was at 3.3%, up from 3.2%. That’s driven mostly by shelter costs.
Let’s break the CPI down:
There are about 27 categories that make up the CPI. The three major categories are Food, Energy, and All Other Items.
All Other Items comprise Transportation, Shelter, Medical Care, Apparel, Alcohol and others.
All 27 impact the CPI to a degree. Items that make the largest impact are:
Shelter – 36%
Commodities (apparel, cars, alcohol) – 18.4%
Food – 13.4%
Energy 6.8%
Some observations:
Gasoline is down 15.3% but only accounts for 3.4% of the index. It is an impact, and it’s nice to know it’s down.
Food at home is only up 1.3% and makes up 8.1% of the index; I guess we can stop saving for eggs.
What factors drive the Core CPI up?
Shelter costs. It makes up 36% of the index, and shelter costs were up by 4.9%.
Motor vehicle insurance increased by 16.3% but only accounted for 3% of the index.
FYI, used cars and trucks are down 5.1%.
These are the national numbers, and it’s interesting to see the dynamics at work.
Good news for first-time homebuyers
55% of conventional purchase mortgages in August went to first-time homebuyers.
Data only goes back to 2014, but it’s the highest for any August thus far.
Millennials are in their early to mid-30s – the typical age for when you buy a home.
For many, rent increases forced the issue, so they moved further out of town and bought a place.
The law of supply and demand in Florida.
Year over year, for August, the demand for Florida residential real estate has decreased from 10% to 19%.
Supply is up 40% or more in many metropolitan areas.
The surprise is that this is before Helene and Milton hit the state. Imagine what it’s going to be like now.
There was a significant demand for housing in 2021 due to, among other things, fewer covid restrictions and no state income tax. So, builders built more homes in a state that lets them do it. Unlike some other states.
And that supply factor is keeping prices down.
Jobs are up, and Demand for Robots declines.
Correlation, anyone?
In 2020, with covid restrictions, Boomer retirements, and new hire ghosting, orders for robotics increased dramatically, peaking in Q1 2022 at over 12,000 orders.
Q1 2024 saw only 6,600 orders.
One theory is that manufacturers over-bought for fear of having too few robots.
The other is the realization that there is maintenance and programming involved. And working through the bugs.
Speaking of programming, instead of beeping to announce its proximity, I would program all warehouse robots to say, “Danger, Wil Robinson, danger!”. I digress, but you should look it up anyway.
Name the show and tell me if it was in B&W or color.
The demand is not going away; there’s just a learning curve. Get to your trade shows and see how automation – robotic or artificial intelligence - can help your business succeed.
Breaking Up is Hard to Do
Just ask Google.
It seems they have to open their Google Play store to everyone else, meaning other distributors of Android Apps. Evidently, if you wanted your Android App to be used, it had to be in the Google Play store and nowhere else.
The Federal Trade Commission didn’t like that and neither did Epic Games, an app developer, who filed the lawsuit.
A jury pretty much labeled the Google Play store a monopoly.
I guess they are not passing Go, nor are they collecting $200.
More like paying $75 in Luxury Tax.
78 days until the end of the year.
The main things don’t stop and start on December 31. Many things do: benefits, vacations, incentive plans, to name a few. As a seasonal business, you may notice increases or decreases (depending on the season), but generally speaking, December 31 is no different than January 1. Many people resolve to start things on January 1 – hence the New Year's Resolutions thing, but if the idea is good enough to start on January 1, why don’t you start it now?
“The best time to plant a tree was 30 years ago. The next best time is now.”
Plant your tree today.
