Explaining the Consumer Price Index and why it’s crucial

As you know, S&P 500 stock sliding a bit this morning.

Tech shares dropping for a second day.

Wholesale inflation reading jumps.

Yeah.

It's higher than they thought.

Not good.

You've got essentially eight companies, Bob, that's keeping the S&P 500 up, those five tech companies that are training amongst each other and giving each other loans and bolstering their balance sheets and their revenues, and it's not good.

So when that party comes to an end, and it always does come to an end, go back to what happened with the tech industry during the 90s, right? The dot-com bubble, the real estate bubble, it all pops.

So- Without those eight stocks, Bob, the market would be down substantially.

And that leads into what you also mentioned.

Inflation's up.

The Consumer Price Index was released earlier this week.

And I just want our listeners to understand what that is.

Because you hear these acronyms and nobody knows what they mean.

It's a measure of how prices of everyday goods and services change over time in the great United States of America.

So that's the bellwether.

And it's done by the Bureau of Labor and Statistics, the BLS.

And it's one of the widely used measures to gauge inflation.

And as it's already been published, CPI was up to 3.7. Inflation is much higher in many categories, like fuel up 74%, gas, fuel oil up 74%, gasoline up 34%, airline fares up 22%.

So March is 60 straight, 67 straight month with US CPI inflation above the Fed's 2% target after five plus years of persistent inflation.

The top 1% of households, Bob, are now worth 14 times in the bottom 50 than the bottom 50.

So the affordability gap is worsening and the split between those that have money and those that don't is also widening, which is also not good.

We're hearing a lot about that 3.7% number, but as you say, inflation is much higher in many crucial categories.

The Wall Street Journal did a story yesterday about how changing the oil in your car is now more expensive because the price of motor oil is up along with the cost of gas.

And you go to buy tires.