Food prices

[Mortblanc]

Several things to consider here SS.

First is that food, petrol and utilities are always deleted from inflation rates. That is the way every nation figures it since those items are highly variable even inside a nation's boundaries.

Things like utilities in GB compared to Romania, or rent in London compared to the back side of the Hebrides. Inflation rate means nothing if all you buy is salt and coffee.

Second is that they figure inflation since the last month or quarter,, not from the price you paid in 2017.

Another factor is the number of customers you see in a store is highly variable based on time of day, day of the week and point in the month. Small projects are often paid cash and the materials purchased on payday for a weekend job.

If you shop a lumber company at 2 pm you have no idea how many trucks were lined up at the back door at 6am when they were loading for their day of work.

Also purchasing is not always based on the shelf price, but on the rate of interest one has to pay to get the high end product. Furniture and big ticket household items are an example.

You don't go out and buy a home when interest is sky high. Vehicles epically so.

There is also the situation where reverse inflation is in operation on a market that has rejected the base price of a consumer good.

Right now the Ford truck dealers are glutted with trucks due to the lack of computer chips to roll them out the door for two years and the sudden jump in interest rates. They finally have the chips and they are putting them into trucks, each of which average $70,000 price. That is before title fees, taxes and road fees. They are not selling so Ford has cut the price by 20%.

That actually shows as a reduction in inflation.

They now sit in wonder at why the average American family does not wish to pay $56,000 for a discounted pickup truck!

I saw a survey of one dealer that had 70+ trucks on his lot, none listed at less than $50k and 15 of them listed at over $100k.

Much of the reduction in shopping you see is due to lack of confidence from the consumer rather than the prices. People are simply hanging onto their money.