Inflation is coming, inflation is coming!

Last month I wrote about the distinction between long-term secular inflation and shorter-term cyclical inflation

It has been clear for several months that we are in the middle of a cyclical rise in

The full thread can be reviewed here:

https://t.co/0jBvHOWuHw

2/
Today's PPI report should have been expected to surprise to the upside as the leading indicators of inflation have been screaming to the upside for months!

Here is the ISM prices paid index, cumulated into a growth rate

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Industrial commodity prices have also seen a major acceleration for months.

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So today's PPI report was in line with the leads, suggesting that we have a cyclical upturn in inflation that is * primarily concentrated in the manufacturing sector *

This is a key point.

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Core PPI showed an increase in year over year terms to nearly 2.5%.

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To be very clear, this cyclical upturn in inflation will continue for the next several months and should not be expected to fall apart imminently

This does not mean the secular disinflationary trend is over. We have had 4-5 of these upturns since 2010. They happen. They fade

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Sticking with the trend of a general manufacturing-based upturn, what else surprised to the upside (shouldn't have been a surprise)...industrial production.

IP growth increased to -1.83% y/y

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Industrial production for manufacturing specifically is almost back to positive growth on a year over year basis.

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Should we expect the manufacturing-based growth and inflation upturn to continue?

Yes.

But remember to differentiate cyclical for secular.

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We're not changing this trend anytime soon.

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TLDR:

Play the cyclical trend. Don't lose sight of the long-term fundamentals.

12/12

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1/ My Mission: To Spread Financial Wellness (thread)

Here’s what "financial wellness" means to me

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2/ Mindset

Humans are programmed to think short-term

Evolutionary, thinking short-term makes sense. It helps with survival.

Financial wellness is all about training yourself to develop a long-term mindset

Not easy -- it takes practice


3/ Mindset

If you join the right tribes, you can’t help but improve

My favs:
@AffordAnything
@ChooseFiFI
FinTwit
@MicroCapClub
@themotleyfoolFool
@visualizevalue

Twitter / Podcasts / Blogs / YouTube -- when used correctly -- are amazing


4/ Mindset

Educate yourself - constantly!

Especially about:

1⃣Money
2⃣Relationships
3⃣Health

These 3 categories have an outsized influence on all areas of your life

Books


5/ Career

In the beginning, focus on growing your income

Do more than what is expected

Become a lynchpin

Find a career that you ENJOY (<- important!) that also has high-income potential

Start a side hustle (<- important!)

Build your talent

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