Good Job, Fed! Real Stock Prices Up 37X More Than Real Wages

Ooops! The Wall Street gamblers, who have been aggressively front-running the Fed’s imminent capitulation to their huffy demands for a new round of money-printing, got slapped with a splash of hotter-than-expected inflation this AM. In particular, Powell’s latest inflation-tracking gimmick—the so-called SuperCore CPI— came in at a red-hot 8.4% annualized rate for January.

Of course, the whole chart depicted below is a lot of puzzle palace humbug. Powell’s favorite SuperCore CPI actually excludes 75% of the item-weight in the CPI!

That’s right. The core CPI for services less energy services accounts for 60.8% of the item weights in the CPI basket, but when you subtract per the Powell SuperCore the 36.2% weight assigned to shelter services, you end up with just 25% of the total item-weights.

So, if you want to make pretend that a quarter-loaf is the new inflation whole-loaf, why not go full retard and confect an UltraCore CPI which excludes 100% of the item-weights? Or in the alternative, cut Powell’s salary by 75% and see if he still thinks inflation is rapidly gliding toward the Fed’s idiotic 2.00% target.

Jerome Powell’s SuperCore CPI, 2019 to 2024

The fact is, the statistical games played by the Fed and its Wall Street masters are totally beside the point. Main street Americans do not live by the monthly deltas in some arbitrarily shorted basket of goods and services, but by whether or not their wages are keeping up with the relentless rise in the overall cost of living.

In a word, they have not been keeping up—or at least not since the Donald and his Uniparty confederates on Capitol Hill first locked-down the main street economy and then flooded it with $6.5 trillion of fiscal stimmies—accompanied by upwards of $4 trillion of freshly minted Fed credit—in barely 12 months. In fact, since April 2020, average hourly wages (purple line) in the entire private sector have increased by barely 15%, whereas the overall CPI (black line) has risen by 21%.