I would venture that word of mouth is spreading among the elites who are on the boards of all these companies - a storm is coming so everything needs to get tied down - so the CEO’s as captains of the ships are following the advice.
Whether the storm actually hits, what gets wrecked, what doesn’t. That is a completely separate issue to these people.
What is the storm they're worried about, if not mass layoffs concentrated within an industry?
Inflation is almost down to normal, employment is still high and will remain so as long as the construction sector avoids layoffs due to the coming cash infusion from federal spending bills.
Seems to me the only storm coming is the one created by these same execs, though I understand each of them is incentivized to follow the crowd.
"The index for all items less food and energy rose 0.3 percent in December, following a 0.2-percent increase in November. The shelter index continued to increase, rising 0.8 percent over the month."
Food inflation increased over November. Shelter index increased at an annualized rate of nearly 10%.
Sometimes, you have to dig deeper than the headline.
The rest of that same page you quoted from mentions we actually had _deflation_ in December (-0.1% CPI-U), because energy costs fell so much, specifically gas.
"Last month, inflation was 6.5%" is not correct by any reading of this data! Your link makes it clear that was inflation over the course of 2022, as I said in clunkier language. The graph on that same first page shows most of that inflation happened in the first 6 months of 2022.
The average of the last 6 months in that graph is 0.15, or ~1.8% annualized. That's an arbitrary cutoff (including July's 1.3 shoots up to 3.9% annualized!), but it seems clear we're on the right track. If the next 6 months look similar to the last 6, we will look back and say inflation was already under control before 2022 ended.
I agree that's high, even for the last year, and certainly not a good or welcome thing, but I'm very glad it's offset by gas prices coming down.
If "being on the right track" means that an increase in one category can't be offset by a decrease in another, that seems like an impossible bar to clear.
It's not obvious to me why inflation there has increased even as mortgage rates have skyrocketed due to the fed; people/institutions feel safer betting on housing prices than on stocks, lately?
Shelter and wages are the two core sticky categories of inflation. You don’t negotiate your lease or employment terms every month. Even if there is a change in supply/demand dynamics, it won’t be visible in the market immediately.
This is also why the Fed has been trying to engineer a soft recession. As long as labor markets are tight, there will be sustained wage inflation. And as long as there is wage inflation, there will be people willing to pay higher rates for longer.
The dominant unspoken narrative in the financial markets is that the Fed will overplay its hand and cause a hard recession, at which point they’ll reverse their rate hikes. And when that happens, all the money sitting on the sidelines will reenter the market, leading to sustained inflation. No one really thinks that this beast can be tamed so easily.
it’s not just money sitting on sidelines, there is also risk appetite on the sidelines, reserve work capacity on the sidelines, the ability and willingness to lever up on the sidelines.
Whether the storm actually hits, what gets wrecked, what doesn’t. That is a completely separate issue to these people.