And at least one aspect gave consumers a reason to celebrate.
CNBC noted astutely that the House Steve Jobs built opted to keep prices at iPhone 12 levels — effectively making the iPhone inflationproof. Fortt surmised that a combination of first-rate sacrifice, carrier subsidies and Apple's short-term engineering has given consumers a rare and unexpected price break for upgrading their phones.
The iPhone 13 s relative pricing reminds us that, until COVID 19 visited the world, technological advances played a huge role in boosting productivity and taming inflation. Whatever the rationale of Steve Jobs Chief Executive Tim Cook should be, Apple is defying a particularly nettlesome problem that is stifling consumers: Prices everywhere are bubbling up with no foreseeable end in sight.
All of which leads us to an issue that s not getting the attention it deserves. Nowhere has inflation caused a bigger, but mostly under-the radar, impact than on what we eat.
Bloomberg highlighted the problem in a recent report that quoted United Nations data showing Food inflation skyrocketing 31% year over-year in July. The story also reminded readers that food riots triggered by fluctuating prices were a big driver of the Arab Spring protests in 2011 as if the world needed any more civil unrest. In addition, August's consumer price index showed annual food inflation inching close to 4% in the last few months. According to DataTrek Research, U.S. food prices have soared over the past two years by everyday protein staples such as meats, poultry, fish and eggs.
While protein inflation is unstable, the usual pattern is a sudden lifting. Following a subsequent decline, wrote data analyst Nicholas Colas on Wednesday. We have had two increases in the recent past decade 2020, 2021, but no decline as of yet. The more unsettling aspect is that every year the U.S. imports hundreds of billions worth of food — far more than it ships abroad alas, a story for another day And in that arena, prices are also on the rise: August import price data showed food prices rose 0.6% month-over-month and 10% year over year.
At least a part of that narrative is being driven by global shipping costs, mostly attributed to sky high demand and sky high supply chain woes.
Estimating that global import prices rise when shipping costs double, Capital Economics Simon MacAdam wrote on Wednesday, given the maritime shipping costs have never surged anywhere near as much as they have done during the past year, the full extent of the passthrough is difficult to predict The longer-term impact on consumers isn t entirely clear, but MacAdam noted that if shipping costs were expected to fall soon, importers might wait for costs to normalize and hold off from raising prices.
However, going by charter rate futures for bulker vessels traders have finally come around to the view in the past couple of months that shipping costs are not going to fall this side of Christmas and will be still well above pre-virus levels into 2022. The short version: Don't expect any relief in grocery aisles, or restaurants for that matter, anytime soon.
All this brings us back to the relevant case of Apple and one curious anecdote.
In 2011, then the New York Federal Reserve President William Dudley tried to raise Queens consumers about spiking food prices. The central banker cited the iPad which cost the same as the preceding version as a reason why you need to look at the prices of all things. As one can imagine, the analogy went down terribly with Dudley's working-class audience. One attendee tossed out a memorably biting quip: I can't eat an iPad. A decade later it suffices to say that iPads — or iPhones — are still edible. By Javier E. David, Editor at Yahoo Finance. E: Retail sales advance, month over month, August - 0.7% expected, -1.1% in July None 8: 30 a.m. ET: Retail Sales expected excluding autos and gas, August unchanged expected, - 0.7% in July None 8: 30 a.m. ET: Initial jobless claims, week ended September 11 323,000 expected, 310,000 during prior week none 8: 30 a.m. ET: Continuing Claims, week ended Sept. 4 expected 2.740 million, 2.783 million during prior week None 8: 30 a.m. ET: Philadelphia Fed Business Outlook Index, September 19.0 expected, 19.4 in August NONE 10 00 a.m. ET: Business inventories, July 0.5% expected, 0.8% in June None President Biden has a speech on the economy at 1: 45 p.m. The White House promised to discuss efforts to bring down costs and ensure that the middle class can finally get a break. Over on Capitol Hill, lawmakers are in no rush for a recess but a wall around the Capitol is being reinstalled ahead of a follow-up rally to Jan. 6 called the Justice for J 6, planned for this weekend. The fencing is expected to be finished by tonight.
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