Consumer Prices September 2009 – Real Prices Down 4.7%

The BLS reported yesterday:

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in September, the Bureau of Labor Statistics reported today. The increase was less than the 0.4 percent rise in August. The index has decreased 1.3 percent over the last 12 months on a not seasonally adjusted basis.

The seasonally adjusted increase in the all items index was broad based, although tempered by a decline in the food index. The all items less food and energy index increased 0.2 percent in September after increasing 0.1 percent in each of the previous two months. Contributing to this increase were advances in the indexes for lodging away from home, medical care, new vehicles, used cars and trucks, and public transportation. The increase occurred despite declines in the indexes for rent and owners’ equivalent rent, the first decreases in those indexes since 1992. The energy index also increased in September, as increases in the indexes for gasoline, fuel oil and electricity more than offset a decline in the index for natural gas.

In contrast to these increases, the food index declined, falling for the sixth time in the last eight months. The index for food away from home increased, but the food at home index declined as the indexes for fruits and vegetables and for meats, poultry, fish and eggs fell sharply. Both the food and energy indexes have declined over the past 12 months. The decline in the food index is the first 12-month decrease in that index in over 40 years.

Note that there are a lot of  “first time in x years” declines in the report above.

And what about real prices, meaning prices where the unrealisic owner’s equivalent rent is replaced with the decline in the case shiller (most recently 12.76%) index? If we make that adjustment, real annual price declines were actually -4.7%.

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Money Supply – September 2009

The true money supply has fallen by $11 billion from August to September to now $2,133 billion:

money-supply-september-2009

This is the 4th monthly decline straight.

The annual growth rate has dropped to 10%:

money-supply-growth-september-2009

One more noteworthy item in this month’s money supply data: The Treasury’s “Supplementary Financing Account”, after 6 months of maintaining a constant level of $200 billion, has now dropped to $191 billion. I believe this may be yet another sign that the Fed’s efforts to wind down the monetary stimulus have already begun behind the scenes.

This, along with an ongoing and accelerating credit contraction, will be forces blowing in the face of all futile attempts to reflate the bubble.

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Employers Shed 263,000 Jobs in September 09; Real Uneployment Reaches 17 Percent

Today’s statement from the BLS Commissioner notes:

Job losses continued in September, and the unemployment rate continued to trend up, reaching 9.8 percent. Nonfarm payroll employment fell by 263,000 over the month, and losses have averaged 307,000 per month since May. Payroll employment has fallen for 21 consecutive months, with declines totaling 7.2 million. In September, notable job losses occurred in construction, manufacturing, government, and retail trade.

Based on today’s report on the employment situation, the real unemployment rate U-6, the best and most realistic unemployment measure, has now reached 17%:

bls-september-2009

The numbers are worse than analysts had expected:

Analysts polled by Reuters had expected non-farm payrolls to drop 180,000 in September and the unemployment rate to rise to 9.8 percent from 9.7 percent the prior month. The poll was conducted before reports, including regional manufacturing surveys, showed some deterioration in employment measures.

… welcome to the post-cash-for-clunkers economy.

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