Like me, you might have missed National Chicken Wing Day last Friday (July 29).
With wing prices plunging, observers of the “holiday” had lots to celebrate. Close to $3.00 a pound last year, now prices are at $1.53.
Maybe we have reached peak inflation?
In addition to chicken wings, prices have been declining elsewhere.
Perhaps most crucially, gasoline is cheaper. According to the U.S. Energy Information Administration, the average price for all formulations was down from $5.032 in June to $4.668 in July. Meanwhile, GasBuddy tells us that the retail price of regular gasoline hit a high of $5.02 during June but then dropped to $4.19 yesterday.
Our Bottom Line: Peak Inflation
At this point we can ask if we are close to a turning point. Saying, “Yes,” one economist believes the peak is a possibility. In his daily market letter, Dr. Ed Yardeni explained why:
- Citing the Purchasing Managers Index (M-PMI), he says that supply disruptions seem to be easing. His evidence is reduced deliveries and backlogs-of-orders.
- Prices also are decreasing because of an unintended inventory accumulation.
- The M-PMI prices paid index is down from 87.1 in March to 60 in July.
- On the demand side, he sees less purchasing power. The reason is what he calls the “inflation tax.” He points out that while nominal spending is up, when we take account of inflation, it is barely more than where it was. As we know less spending shifts our demand curve and reduces equilibrium prices.
- The price of a barrel of oil is down.
Because what purchasing managers report will percolate throughout the economy, Dr. Yardeni could be right.
My sources and more: Thanks to Emily Peck on Slate Money for alerting me to chicken wing prices. From there, I fortuitously discovered National Chicken Wing Day. Then, Ed Yardeni was my primary peak inflation source. In addition, the eia was a handy source for gas prices as was GasBuddy. But finally, if you want still more, the IMF explained consumer attitudes about inflation while CNBC had some up-to-date price info.