PPI, CPI, ERC, Demographics and Back to School, TDK, Chrome, C-60, C-90 and Dolby B
PPI and CPI
The Producer Price Index – PPI – fell this past month to 2.2%, down from the previous month of 2.7%. That’s smokin’.
But curiously, the core PPI – the PPI that excludes food and energy, went up from 3.2% to 3.3%. So, not everything is going down.
As a reminder, the PPI is a measure of the average change in the prices domestic producers are paid for the goods they produce.
So that means that it was the drop in energy and food prices that caused producer prices to drop.
Then the CPI—Consumer Price Index—came out, and Wall Street broke out the champagne because it dropped, too (the rate, not the champagne) on an annual basis, from 3.0% to 2.9%. This is good news because most people now believe that the Fed will drop rates at the September meeting.
But Housing Starts keeps dropping.
It’s almost like a riddle wrapped in a mystery inside an enigma.
Back to School
I listen in on a monthly market/economic conference call that I find very informative because the host speaks using small words that I have heard before. So here is some insight…
During the pandemic, there was a significant shift for some parents to stay at home, particularly with younger children, amid the lack of or inability of daycare facilities to handle pandemic conditions.
Well, those kids are now school-age and are going to school. Consequently, parents have started returning to the workforce, impacting workforce participation.
This is part of the reason that unemployment went up to 4.3% from 4.1%. There are more folks in the workforce to count.
During covid, some parents left the workforce, and boomers retired, shrinking the available pool. Remember the “I can’t find anyone to work” trend?
Well, now some of those jobs are filling up.
Wages have increased over the last three years by anywhere from 15% to 25% depending on the industry, so financially, it makes sense for those parents to get back to work.
Particularly since costs have gone up.
It’s the demographics, folks.
The ERC – Employee Retention Tax Credit
Remember all the phone calls you got from firms promising you qualified for a tax credit for covid relief? Well, the IRS does, too, and now it is moving forward, or at least taking action.
Around this time last year, the IRS halted processing of the Employee Retention (Tax) Credit, or ERC, due to an egregious amount of fraud involved with the program.
Amazing what the promise of easy money will make people do
So, all applications were halted so that the IRS could get a handle on what was going on. The problem was that the good applications were halted, too.
They targeted ERC applications submitted by certain firms that had a “reputation,” and it wasn’t a good one, either.
The IRS has announced that it will soon process 50,000 claims that were filed before September 14, 2023, and have a very low risk of error. They expect to start paying claims on those applications in September. The IRS will also process another batch later this year.
A reliable source confirms to the Report that letters have been received as of Friday.
For what it’s worth, this is all money you spent two years ago, so it really is a bonus for the company. Perhaps some holiday bonuses for the staff? Just tossing ideas out there.
What do the following words have in common?
Maxell, TDK, BASF, Sony, Chrome, C-60, C-90,Dolby B & C.
They are associated with cassette tapes. And they are making a comeback.
From Gen Z no less.
More than 430,000 cassettes were sold in the U.S. last year. Evidently Gen Z likes the nostalgia.
Yep, that’s what makes me nostalgic: pressing the Dolby button and having most of the hiss disappear, along with the high end of the music.
That said, I have about 75 of them in my garage for a tape deck I have had since college that died six years ago. So, I bought another one just to hear what nostalgia sounds like in my garage.
And yes, my oldest cassette is from the early ‘70s that my parents bought. Glen Campbell.
Pretty soon, we’ll be seeing avocado green linoleum back in kitchens. Now that’s nostalgic.
Speaking of nostalgia, are you nostalgic about last year’s numbers? Is this year not going to plan? Find someone to talk to about it; a friend, consultant, sales manager, – heck, call me and I’ll give you ideas. Whatever you do, do something different to elicit a different result.
We are approaching the 4th quarter when everyone realizes that they are behind goal. Just don’t let it be you.
