The BLS released the October inflation report and there is an interesting observation we have made, we call it “people wage inflation.” From the BLS:
CONSUMER PRICE INDEX – OCTOBER 2023
The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in October on a seasonally adjusted basis, after increasing 0.4 percent in September, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.2 percent before seasonal adjustment.
The index for shelter continued to rise in October, offsetting a decline in the gasoline index and resulting in the seasonally adjusted index being unchanged over the month. The energy index fell 2.5 percent over the month as a 5.0-percent decline in the gasoline index more than offset increases in other energy component indexes. The food index increased 0.3 percent in October, after rising 0.2 percent in September. The index for food at home increased 0.3 percent over the month while the index for food away from home rose 0.4 percent.
The index for all items less food and energy rose 0.2 percent in October, after rising 0.3 percent in September. Indexes which increased in October include rent, owners’ equivalent rent, motor vehicle insurance, medical care, recreation, and personal care. The indexes for lodging away from home, used cars and trucks, communication, and airline fares were among those that decreased over the month.
The all items index rose 3.2 percent for the 12 months ending October, a smaller increase than the 3.7-percent increase for the 12 months ending September. The all items less food and energy index rose 4.0 percent over the last 12 months, its smallest 12-month change since the period ending in September 2021. The energy index decreased 4.5 percent for the 12 months ending October, and the food index increased 3.3 percent over the last year.
And now let’s take a look at some interesting observations…
The highest inflation measures for October, which have been consistent for the past year, are Food away from home at 5.4%, Medical Care Commodities at 4.7%, Shelter and Transportation services each at 6.7% and 9.2%, respectively.
What do these things all have in common? It’s PEOPLE going out for food at restaurants, going out for medical care, and moving goods and services about via transportation. These categories all appear, to us anyway, to be people heavy activities.
We continue to have millions of boomers retire each year so while they are retired and no longer part of the labor force, they will continue to each out at restaurants, seek out medical care, and move around in planes, trains, automobiles as well as order goods and services online.
Because so many people are retiring, we have labor shortages everywhere and it will only continue to get worse but at least this activity gives us a good indication on where the profit potential will be which will be in health care, discretionary spending, and technology.
To learn more, stay tuned, stay profitable and stay solvent…