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Fast Take: U.S. Consumer Inflation Muted, Just Don’t Buy a Used Car | Investing News

Fast Take: U.S. Consumer Inflation Muted, Just Don’t Buy a Used Car | Investing News

(Reuters) – U.S. consumers on balance paid only a little bit more for goods and services last month as supply chain disruptions that contributed to a bump up in inflation over the summer began to ease, a welcome respite for the millions who remain unemployed.

While that easing pressure on pinched consumers might offer a benefit to Republican President Donald Trump’s reelection prospects against Democratic challenger Joe Biden, it does come with a big “on the other hand” caveat: It is the latest sign of fading momentum in the rebound from this spring’s record-setting economic slump.

A bit of inflation typically is an indication of strengthening demand, an encouraging signal that consumers have reliable sources of income allowing them to contribute to growing an economy that hinges extensively on their spending. But with roughly 11 million still out of work and desperate for a new round of COVID-19 relief from Washington, September’s modest uptick in prices is no such signal.

Here’s Jefferies chief financial economist Aneta Markowska’s take: “After several months of above-trend gains, price pressures are finally normalizing. Both headline and core CPI increased by just 0.2% (month-to-month) in September, with the underlying details painting an even weaker picture.”

Graphic: September CPI: All about used vehicles https://fingfx.thomsonreuters.com/gfx/mkt/azgvojwqepd/Pasted%20image%201602602548532.png

In fact, she notes prices would have been unchanged but for one thing: The largest monthly increase in used car and truck prices since 1969. And with cash-strapped consumers increasingly reliant on their own transport to get to an on-site job, that’s no welcome development.

Food price increases, too, are moderating after a big run up in the spring, but where you eat makes a big difference.

If eating at home, as millions without work have no choice but to do, then food prices were lower for a third straight month.

If

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Reynolds Consumer Products Has Found Itself In My Portfolio (NASDAQ:REYN)

Reynolds Consumer Products Has Found Itself In My Portfolio (NASDAQ:REYN)

Reynolds Wrap maker back on stock exchange with $1.2 billion IPO | Business News | richmond.com

Source

Reynolds Consumer Products (REYN) came on the market via an IPO (initial public offering) in the beginning of 2020. The company was a part of Alcoa (AA) for quite a few years and then was acquired by a private equity company controlled by one of New Zealand’s richest men. It has now finally found its way back to the public market as a standalone entity. The company has many products that are considered staples of the household and is most notably known for its aluminum foil wrap.

The company stated it had a 64% share of the market for foil wrap which is quite impressive for any company to have that kind of market share. I believe as a standalone consumer products company, Reynolds will be able to make moves that allow it to improve its profitability and grow in the long run. The ability to operate on its own allows for several changes such as an increase in research and development, new and increased marketing, product innovation, and of course acquisitions. As the company begins to find its way and generate a new path forward, I believe there is an opportunity for long-term investors to benefit along the way. Because of this, I started a position I plan on holding for quite some time.

Company Overview

First things first, while Reynolds Consumer Products is now a standalone company, the principal shareholder remains Packaging Finance Limited. It happens to control 77% of the voting power which means there is little outside shareholders can do to change the direction of the company if they disagree with the Billionaire owner Graeme Hart. The good news is that Graeme has made to me what seems to be seemingly intelligent moves over his career so I believe the success will continue.

Reynolds Consumer

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Citigroup profit hit by consumer bank woes; warns of more pain

Citigroup profit hit by consumer bank woes; warns of more pain

By Imani Moise and Niket Nishant

(Reuters) – Citigroup Inc beat analysts’ estimates for third-quarter profit on Tuesday, driven largely by a surge in trading, but its results underscored deeper troubles in its consumer bank that struggled with a decline in customers and spending.

The bank, which will have Wall Street’s first woman CEO, Jane Fraser, at its helm early next year after long-time Chief Executive Michael Corbat retires, faces a series of challenges as a coronavirus-induced recession grips American households.

Citi’s shares fell over 4% in early trade as management on a conference call indicated that the third-largest U.S. lender was bracing for prolonged pain, a view that contrasted with JPMorgan Chase Inc’s more upbeat views on loan losses.

“We are expecting a somewhat more muted and slower recovery in both unemployment and GDP through 2022,” said Chief Financial Officer Mark Mason.

“In the crisis we are managing through, we’re not seeing acquisitions or new account openings.”

With the recession crushing consumer and business confidence, and with it demand for loans, Citi reported its first outright fall in revenue this year, down 7% to $17.3 billion in the third quarter.

Profit tumbled by more than a third as its credit card customers closed accounts and spent less.

Revenue in North American branded cards, the growth engine for Citi’s consumer bank going into the year, fell 12%.

The bank, one of the largest credit card issuers globally, said end of period open accounts across its portfolio dropped by 4%, or more than 5 million, and purchase sales slid 10%.

BRIGHT SPOTS

There were, however, some bright spots.

Citi’s trading business turned in another strong quarter, with revenue from bond and stock market trading jumping 18% and 15%, respectively.

Credit costs were helped in part by lower loan volumes, particularly in

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Consumer Prices Climbed Last Month, Driven by Used-Car Demand

Consumer Prices Climbed Last Month, Driven by Used-Car Demand

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People walk through a mall at Hudson Yards in New York City.


Spencer Platt/Getty Images

Consumer prices climbed last month, driven by continued strong demand for cars and trucks as the economy rebounds from the depths of the coronavirus recession.

The consumer-price index rose 0.2% in September on a seasonally adjusted basis, slowing from a 0.4% increase in August, the Labor Department said Tuesday. The reading was in line with the 0.2% economists polled by the Wall Street Journal had expected.

Excluding the volatile food and energy categories, core prices rose 0.2%.

Over the past 12 months, the index rose 1.4% on a non-seasonally adjusted basis. Core prices rose 1.7% over the past year.

Prices for used vehicles were up 6.7% last month, the largest monthly increase since February 1969. The gains in this category accounted for most of the monthly overall increase.

“The jump in used car and truck prices over the past three months likely reflects the increased demand from city-dwellers who no longer are comfortable taking mass transit and others who have left the city altogether,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. “We suspect that these rapid increases will not continue for an extended period since the short-term increase in demand should soon become satiated.”

Another sign consumers are moving beyond the pandemic: The index for food away from home continued to rise, gaining 0.6% in September, while grocery prices fell.

U.S. stocks were heading toward a mixed open after the report.

Dow Jones Industrial Average

futures were off 0.6% at 28618,

S&P 500

futures were down 0.4% at 3518, and

Nasdaq

futures were up 0.2% at 12125.

The indexes for shelter, new vehicles, and recreation also increased in September, the Labor Department said. The indexes for airline fares and apparel

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Used Vehicles Lift U.S. Consumer Prices, but Inflation Slowing | Investing News

Used Vehicles Lift U.S. Consumer Prices, but Inflation Slowing | Investing News

WASHINGTON (Reuters) – U.S. consumer prices increased for a fourth straight month in September, with the cost of cars and trucks rising by the most since 1969, though inflation is slowing amid labor market slack as the economy gradually recovers from the COVID-19 recession.

While the benign report from the Labor Department on Tuesday will have no direct impact on monetary policy, it should allow the Federal Reserve to keep interest rates near zero for a while and continue with massive cash infusions as it nurses the economy back to health.

The U.S. central bank is now more concerned about the labor market and has embraced flexible average inflation targeting, which in theory could see policymakers tolerate price increases above its 2% target for a period of perhaps several years to offset years in which inflation was lodged below its goal.

At least 25.5 million people are on unemployment benefits.

The consumer price index rose 0.2% last month after gaining 0.4% in August. The CPI advanced 0.6% in both June and July after falling in the prior three months as business closures to slow the spread of the coronavirus weighed on demand.

A 6.7% jump in the prices of used cars and trucks accounted for most of the increase in the CPI last month. That was the biggest gain since February 1969 and followed a 5.4% advance in August. There were also increases in the costs of new vehicles and recreation. But prices for motor vehicle insurance, airline fares and apparel fell.

In the 12 months through September, the CPI increased 1.4% after rising 1.3% in August. Economists polled by Reuters had forecast the CPI climbing 0.2% in September and rising 1.4% year-on-year.

Excluding the volatile food and energy components, the CPI rose 0.2% last month after increasing 0.4% in

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