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Originally Posted by bagekko
Just found out my homeowners insurance policy renewal next month is going up 50%, what a joke, to many that is a huge deal. Woo hoo food inflation has stopped but other crap is still out of control...
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Just renewed myself and am flabbergasted, frankly. Ours went up nearly 30% y-o-y, and has doubled (to $4500!) in three years. Clearly in some parts of the economy inflation continues to be an issue that is not going away quickly.
In other parts, not so much, which was reflected in today's inflation figures. But the market hasn't responded to that. Why? One reason, I think, is the observed stickiness. PCE x-food/energy in April was 2.8% (also 2.8% in Feb/Mar) is still high. (To those who say, it's not high, it's close to 2%, think again. To get from 2.8 to 2 inflation would have to drop by almost 30%! That's a lot, no a little.) The other is that where inflation has begun to come down, it's because demand is collapsing now that consumers, already overstretched, are starting to fear for their jobs and pulling in spending. Food, cars, airfares, hotels, are coming down, but for the wrong reasons. The rest, not so much.
Personal Income and Outlays, April 2024
Couple that with the downward revision of the GDP numbers to +1.3% for Q1 and projected growth of maybe 1% in Q2, it's clear we're already in a stagflationary environment. Job creation has been trending down for two years now and hourly earnings increases have been dropping. There is finally a broad sense that jobs are at risk. That is the shoe that needs to fall in order to break this cycle, and it looks like it might finally happen, despite the ridiculous fiscal policies of this government.
This has made parts of the market very jumpy; note the 20% drop in CRM and the 25% drop in MDB after they announced slowing growth. Expect more turbulence and downdrafts, I think.