On "What's Moving Your Money with Spencer Hakimian," Spencer points to the places where inflation is hitting hardest, and urges investors, and consumers, to look at Amazon and Walmart for key indicators.
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00:00On today's episode, we're talking all things inflation, the computational differences between CPI and PPI, which was a big online debate in the past week.
00:10We're going to be talking about some of the price increases that are getting very visibly noted on big, large, exposed retailers like Amazon and Walmart.
00:21And we're also going to talk about certain categories where inflation is just outright exploding, specifically coffee, beef, household appliances, and more.
00:32So sit back tight, stay tuned, and I hope you enjoy.
00:38So last week, there was this pretty big debate online.
00:41If you are one of those that is permanently online, I'm sure you know what I'm talking about.
00:45And it was this difference where we saw CPI, which is Consumer Price Index.
00:50It was rising, and it was beating expectations, and there's a trend of it rising overall, versus PPI, which is Producer Price Inflation Index.
01:01And that was showing that inflation was falling, that it was not a pass-through effect from tariffs, that this was somehow proof that tariffs are not, in fact, inflationary.
01:13But, you know, the people that were taking that side missed out one critical part, and it's that PPI explicitly does not include foreign producers.
01:24PPI is a domestic measure of producer inflation.
01:28PPI measures how American manufacturers and factories are seeing their prices go up and down.
01:36And, of course, American producers' prices are not going up.
01:40And the tariffs are on foreign producers.
01:42Nobody expected an American sock manufacturer that's making everything here in the United States to have their prices go up.
01:48We were worried about the Vietnamese sock manufacturer.
01:52We were worried about his company's prices going up.
01:55So, of course, PPI didn't go up.
01:57My personal take here is that inflation is rising.
02:00If you follow me on Twitter, you've seen that over the weekend, I've been a little skeptical, to be honest, about the government's numbers, BLS numbers of 2.7% inflation year to year.
02:11And I'm only skeptical because, look, I live a life just like you live a life, just like everyone else lives a life, right?
02:18My three biggest expense categories are housing, health insurance, and food.
02:23My housing variable costs, so property taxes, utilities, maintenance, you know, things that are not stuck, like my mortgage as an example, they're up close to 10% from last year.
02:35My health insurance costs are literally up, literally, by 30%.
02:40I'm not kidding.
02:4130% my health insurance premium, monthly premium is up.
02:46And then we have food costs.
02:48My personal food costs are up about 7-8% year over year.
02:52I try not to eat away from home so much for health reasons.
02:55I also try not to eat a lot of red meat for health reasons.
02:58But if I consumed a more average amount of red meat, I think this would be closer to 10% my personal numbers.
03:05So, you know, just with that in mind, if my three personal biggest categories are growing by 10%, 30%, and 7%, how are we getting 2.5%, 2.6%, 2.7% inflation?
03:17The numbers just don't check out over here.
03:19Listen, I'm not trying to be conspiratorial, but I just, I'm not experiencing 2.5% inflation.
03:25Are you?
03:26Let me know in the comments section.
03:27Maybe I'm wrong.
03:28Maybe my lifestyle is particularly unique, and I'm experiencing something that most people aren't.
03:34Maybe that's the case, but let me know nonetheless.
03:35Now, let's get into something that's going to become very politically sensitive in a short amount of time, and it is Amazon and Walmart.
03:47Over this past weekend, there was cover to cover coverage on the Wall Street Journal, on the Financial Times, on the New York Times, CNN, Bloomberg.
03:57Even Fox News was discussing it, about just how much prices are beginning to increase on Amazon and on Walmart, both in the stores and online.
04:08So, the Wall Street Journal ran a pretty significant study that showed that Amazon's prices since January 20th have gone up 5.2%.
04:17Now, that's only six months' time, so if you annualize that number, that's nearly 10% inflation on retail goods.
04:26Obviously, the vast majority of products from Amazon, that if they are foreign, they come from China, so they are going to have significant tariffs in place, right?
04:38So, we can expect to see these prices increases.
04:41Lately, there's become this narrative that, oh, the foreign producer is eating it all in their margins.
04:47No, domestic buyers are eating it, and they're trying to save it, and they're not trying to pass it on.
04:52That's just not true.
04:54Please, it's just completely false.
04:57It is provably false.
04:58It's demonstrably false.
04:59It's false across many different companies and many different sectors.
05:03We can clearly see that prices are going up.
05:06In fact, some categories on Amazon, some items are up literally almost 200%.
05:12Some items are up 50%, 40%, 30%.
05:15There are very few items that have gone down in price, right?
05:20And this is including all the cost-saving measures that Amazon has been trying to do.
05:24Not just Amazon.
05:25I'm not trying to pinpoint them.
05:27They didn't do anything wrong.
05:28In my opinion, the policy is wrong.
05:30We have an incorrect policy in this country, and that is what is causing all of these issues.
05:34And then we got a study in from Walmart also.
05:38Well, a company that did a study on Walmart.
05:42And it showed that in certain household appliance numbers, prices on Walmart from the end of April,
05:49so let's say May 1st.
05:51May 1st until July 1st.
05:52Let's make these numbers simple.
05:53Are up, in some instances, 50%, things like pots and pans, things like brooms, things like vacuums, things like plates, things like forks, things like knives, necessities, not fancy things, generic necessities that people need for their households, right?
06:12These things have gone up, an explosion in price.
06:16We're not talking about regular 2%, 3%, 4% inflation, which to me, even that's unacceptable.
06:21But we're talking about double-digit, runaway inflation in two months' time.
06:27And I stress, this is not an annualized number, right?
06:31Like, this is just two months.
06:33We could come back in a year's time and see that prices on some of these items literally doubled.
06:38And that would be a big, big problem.
06:40That would be a big economic problem.
06:42That would be a big social problem.
06:44Ultimately, that's going to be a big problem for the Republicans in 2026 as midterms start coming around.
06:49You know, in the United States, we have essentially a perpetual political cycle.
06:54We have an election.
06:55We have essentially 18 months of clean governing.
06:5916 months, if you really count, that they have to wait until January to get in.
07:02And then we're instantly into an election season again, over and over and over and over and over again.
07:08So, this is going to become a hot topic.
07:12And again, the whole point of our podcast of this is we're getting ahead.
07:16We are discussing and we're publishing stuff in the middle of July that no one's going to be talking about until October, right?
07:22We are writing on this show, all of us together, we are writing the front cover of the most important newspapers in 90 days from now.
07:29We're getting ahead of all of it.
07:31So, that was that.
07:33Now, I just want to talk about a personal anecdote that I saw because it was literally mind-boggling to me, right?
07:39And ultimately, it is not so significant in the grand scheme of things.
07:44But, I just want to show you how entrenched and significant and structural these inflation pressures are.
07:53And many of them are coming from tariffs.
07:55I went grocery shopping this past weekend.
07:58And I go every, let's say, two, three weeks, I go grocery shopping.
08:01And, you know, to be honest with you, I really don't look at the prices all the time.
08:06I don't monitor them month over month.
08:08I know what I pay for them and I get a good ballpark of what it was last month.
08:12And then I see my American Express bill.
08:14And as long as it's within a certain range, I'm kind of okay with it.
08:19But, this week when I was checking out, I had two things at the cash register that I was like, what was coffee beans and ground beef?
08:28All right, my coffee bean prices literally went up 40% since early June.
