CPI, PPI, Retail Sales, Sentiment, SB-553, the Nickel Pickle and Shipping Costs.
Well, this week was mostly good Good News.
The National Federation of Independent Business reported that their members had an increased optimism about the future. That’s good.
Unfortunately, it’s still way below average.
There sure seemed to be a big deal made about the CPI – Consumer Price Index – this week.
There certainly was a drop in the CPI to 4.0% year over year, down from 4.9%. That is wonderful news.
However, it was expected. The median forecast showed that is what it was going to be.
The Core CPI – the index that excludes food and fuel prices, also fell; to 5.3% from 5.5%.
That was also in line with expectations.
You may recall that the Core CPI certainly lagged CPI on the way up, and I expect it will lag on the way down.
Assuming prices continue to go down.
Regardless, the trend is good. It’s good Good News all around.
Even better news was that the prices that producers charge for their products – the wholesale price – also dropped.
From 2.3%/year to 1.1%/year.
The Core PPI was also down from 3.3% to 2.8%. Also, good Good News.
US retail sales were up 0.3% over the month of May.
And Consumer Sentiment was up, but still way below where it has been.
And the best news… the Fed did NOT raise their interest rates.
However, they did say they probably will in the future.
On to other things…
Shout Out
The local newspaper puts out an annual listing of businesses voted best by the readers of the paper.
In the category of Best Tile and Stone Provider is Quality Marble and Granite, one of the readers of this report.
Congratulations, Evan!
California Senate Bill 553
And why would I mention this?
Part of the bill defines the act of an employee attempting to stop a shoplifter from shoplifting, a workplace violence incident.
Now, when I think of workplace violence, I think of fellow employees shooting up the workplace.
Not this bill. In fact, shoplifting has become such a problem that it prohibits store employees from taking any action against a shoplifter.
I think that’s more of a crime incident.
However, it doesn’t prohibit an owner. So the liquor store owner in Norco is free to keep his shotgun behind the counter.
The California Retailers Association mocks the bill as an open invitation for thieves “to come in and steal.”
Ya think?
I have two points in this piece.
One, to illustrate that California legislators have too much time on their hands.
Two, I have known many businesses that do not join their industry association or organization, yet benefit from their work. These organizations lobby on your behalf to stop stuff like this from going through.
So join them.
Or you can call your local state representative. I’m guessing the association is going to be more effective than your state representative.
Try this: https://findyourrep.legislature.ca.gov/
What is the Nickel Pickle?
It obviously, refers to the metal nickel and not the five-cent coin.
Although, the nickel is made of 25% nickel.
At any rate, nickel is a key metal element of batteries, and the Nickel Pickle refers to the problem of securing enough nickel to make those batteries while minimizing the environmental impact.
And as it turns out, batteries are a key component of electric vehicles – EV.
It used to be cadmium (remember the Ni-Cad battery? Well, cadmium was just a little too toxic.)
So, where does this nickel come from? Deep mining and strip mining.
That is where the soil is stripped to get to the nickel because those deposits are typically just below the soil. Unfortunately, many of these deposits are in Indonesia, and it turns out that nickel is right below the Indonesian forests where the nickel is mined.
After the nickel is sourced, the area is replanted to reduce the impact of the mining. That’s the good news.
The deep mining is in Russia and Canada, where you get a better quality nickel that doesn’t need as much refining but is way more expensive to get out of the ground.
At any rate, the Indonesian nickel is refined by dousing it with sulfuric acid and heating it to 400 degrees Fahrenheit.
And that’s the other environmental bugaboo.
Regardless of how you do it, there isn’t enough to meet the mandated requirements for EV fleets over the next 10 years.
And that’s the Nickel Pickle.
And finally…
Shipping Costs – Good Good News!
About a year ago, it cost $14,000 to send a 40 foot container from Asia to the US.
Today, it’s about $1,500. That’s a bit of a drop.
During the pandemic, box-ship operators were the biggest winners, with some routes going for as much as $20,000/box.
The good news is that your shipping costs should have gone down by now.
At least that’s one expense you don’t have to worry about.
Folks, we are wrapping up the first half of the year. Are you where you think you should be? Did you have a target to shoot for at the beginning of the year for 2023? You should be halfway there. If you aren’t, take a temperature check and ask yourself why not, and make some changes.
