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2021 - Is inflation finally back in the conversation?

Reagan1k

By Reagan1k
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Captainant

Captainant 28569

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11 minutes ago, HamsterHookah said:

I find it funny that people begrudge a company like Chevron/Exxon for making record profits and passing on costs instead of being patriots and taking lower profits because they can afford it right now, but were not offering to pay more for gas when it was cheaper and Chevron/Exxon were losing billions just a handful of fiscal quarters ago.

Losing "billions", assuming you mean several (less than ten) billion is still a hell of a lot less than $75 billion in stock buybacks on top of record profits. Show your work and actually consider the numbers. I looked up Chevron and Exxon's financial performance over the last few years and they both posted profits - not losses - over FY21 and FY22. FY20 did have losses, but they were FAR shadowed by profits in 21 and 22. This doesn't jibe, ya turkey. 

11 minutes ago, HamsterHookah said:

Human beings are emotional creatures and don't realize or don't like that good business, while being lawful and ethical and fair, is not emotional.

Wow lol. When I think of successful American business, I certainly think of "lawful, ethical, and fair", and definitely not regulatory capture, fraud, and briber-i-mean-lobbying. This is impressively wide-eyed, even for you Chrispy lol

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The only thing more predictable than the GOP running up huge deficits on tax cuts and military spending, is each one suddenly becoming horrified by deficit spending 5 mins after a Democrat is sworn in

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HamsterHookah

HamsterHookah 112

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13 minutes ago, Captainant said:

Losing "billions", assuming you mean several (less than ten) billion is still a hell of a lot less than $75 billion in stock buybacks on top of record profits. Show your work and actually consider the numbers. I looked up Chevron and Exxon's financial performance over the last few years and they both posted profits - not losses - over FY21 and FY22. FY20 did have losses, but they were FAR shadowed by profits in 21 and 22. This doesn't jibe, ya turkey. 

Wow lol. When I think of successful American business, I certainly think of "lawful, ethical, and fair", and definitely not regulatory capture, fraud, and briber-i-mean-lobbying. This is impressively wide-eyed, even for you Chrispy lol

So where were you when Exxon lost an historic $20 billion dollars (article from 8 quarters ago, as I mentioned: https://www.reuters.com/business/energy/pandemic-pushes-exxon-historic-annual-loss-20-bln-cut-shale-value-2021-02-02/)? 

Were you offering to pay double for gas to be a good guy and take on some of the loss? Why not if you expect a business to do so for you out of hand (and not because there are advantageous reasons for doing so, like positive customer brand and loyalty, etc.)

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jimmyjazz

jimmyjazz 47231

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There was discussion a page back about Cal-Maine (CALM), which purportedly supplies 40% of US eggs.  (I have not verified this, although wiki claims ~ 25%.)  

It took very little effort to find this information (again, which I have not verified, and will not) which seems to show very minor losses in one quarter of the pandemic, minor profits for three other quarters, and a skyrocketing profit since then, which absolutely swamps the increase in stock price.  Hmmm.  

Now, I don't have an MBA, I'm not a bizdev guy, I really don't get off on any kind of market data besides derivative trading (which I'm not all that good at) . . . but doesn't this seem to indicate that Cal-Maine hasn't exactly been clobbered by either the pandemic or avian flu?  Wiki (yeah, I know) would lead me to believe their SOLE business is eggs.  So, in that light, I have to suggest that perhaps record earnings and a tiny loss (which is swamped by a loss not three years prior) would suggest . . . oh, I don't know . . . price gouging?  It's not the complete story, I'm not going into their SEC filings, maybe buybacks have some effect here, but it still seems like a 3X increase in the price of eggs might be egregious.

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Neonmoon

Neonmoon 38130

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33 minutes ago, jimmyjazz said:

LMAO, I'll make sure to dig in tonight when I'm trying to go to sleep.

This link is super CR and no idea if true but interesting 

https://www.reed.senate.gov/news/releases/reed-asks-ftc-to-crack-down-on-possible-egg-price-gouging

Spoiler

the largest U.S. egg producer, Cal-Maine Foods – which controls 20 percent of the retail egg market -- reported record profits of $323 million as of the most recent quarter, swinging from a loss of $16.8 million during the same period in the previous year. The company also reported a huge increase in profit margins quarter-over-quarter, from negative 2.4% to 22.3%, which could be an indication of gouging.

 

https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=105576

Spoiler

Highly pathogenic avian influenza (HPAI)—a disease infecting birds and poultry—struck egg-laying hens throughout 2022. As a result of recurrent outbreaks, U.S. egg inventories were 29 percent lower in the final week of December 2022 than at the beginning of the year. By the end of December, more than 43 million egg-laying hens were lost to the disease itself or to depopulation since the outbreak began in February 2022. Losses were spread across two waves: from February to June (30.7 million hens) and from September to December (12.6 million hens). On constrained supplies, wholesale egg prices (the prices retailers pay to producers) were elevated throughout the year. The HPAI recurrences in the fall further constrained egg inventories that had not recovered from the spring wave. Moreover, the latest outbreak wave came at a point when the industry seasonally adjusts the egg-laying flocks to meet the increasing demand for eggs associated with the winter holiday season. Lower-than-usual shell egg inventories near the end of the year, combined with increased demand stemming from the holiday baking season, resulted in several successive weeks of record high egg prices. The average shell-egg price was 267 percent higher during the week leading up to Christmas than at the beginning of the year and 210 percent higher than the same time a year earlier. During the last week of 2022, inventory sizes started to rise, and prices fell. Going forward, wholesale prices are expected to decrease as the industry moves past the holiday season and continues rebuilding its egg-laying flocks. This chart first appeared in the USDA, Economic Research Service’s Livestock, Dairy, and Poultry Outlook:

 

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52-80

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14 hours ago, gsoda3 said:

cal maine (CALM) reported earnings just before the new year.  they're the largest producer of eggs in the country, something like 40%.  i didn't listen to their conf call so they might have given insight (intentions into price behavior) but as far as i remember they didn't provide any in their earnings report. 

CALM reports a 20% domestic market share

https://calmainefoods.com/media/1402/calm-investor-presentation-192023.pdf
 

the other US producers (most private) are close behind 

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52-80

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If i was an evil capitalist chicken baron, id use the same excuse for gouging egg prices to gouge the price of the chicken too. seems like a missed opportunity..

https://fredblog.stlouisfed.org/2023/01/egg-and-poultry-price-inflation

 

 

Egg prices are absolutely soaring, while chicken meat prices have been well-grounded. What gives?

Team FRED Blog never wants to sound like Chicken Little, but we also don’t want to walk on eggshells. So, first, let’s simply look at the data: The FRED graph above shows that the average price of whole fresh chickens (in brown) rose 13% between January and December 2022 while the average price of eggs (in yellow) rose 120%. That’s 10 times faster!

Now let’s combine these data with some reporting from the US Department of Agriculture: During 2022, repeated outbreaks of avian influenza ravaged farm flocks of egg-laying hens, thereby drastically reducing the supply of eggs, which drove their prices to record highs. But the price of chicken meat has not experienced the same degree of inflation. Why?

Well, farmers don’t have all their chickens in one basket. Chickens raised for meat (a.k.a. “broilers”) have been less exposed and therefore less susceptibleto the avian influenza that has decimated the egg-laying hens, and the supply of broilers has been reduced less than 1/10 of 1%. Because these two separate supplies of chickens have not been equally affected, neither have their prices. And, despite the regional concentration of losses to poultry populations, the average price of eggs remained remarkably similar across US regions.

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bernorange

bernorange 8385

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...
The employment cost index, a barometer the Federal Reserve watches closely for inflation signs, increased 1% in the October-to-December period, the Labor Department reported Tuesday. That was a bit below the 1.1% Dow Jones estimate and less the 1.2% reading in the third quarter. It also was the lowest quarterly gain in a year.
...
Fed officials consider the ECI an important inflation gauge because it adjusts for occupations that are in higher demand and for outsized wage gains in particular industries, such as those that were most affected by the pandemic.

The Q4 reading comes the same day the interest rate-setting Federal Open Market Committee begins its two-day policy meeting. Markets have assigned a near-certainty to the FOMC approving a 0.25 percentage point rate hike before it adjourns Wednesday.

But the greater focus will be on what officials signal about the future of monetary policy.

Markets are anticipating one more quarter-point hike in March, followed by a pause and then one or two cuts before the end of the year. Fed officials have pushed back on the notion of any policy easing in 2023, though they could change their minds if inflation readings continue to abate.

"The Fed is still likely to keep raising interest rates at the next couple of meetings, but we expect a further slowdown in wage growth over the coming months to convince officials to pause the tightening cycle after the March meeting," wrote Andrew Hunter, senior U.S. economist at Capital Economics.
...

https://www.cnbc.com/2023/01/31/employment-cost-index-q4-2022.html

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bernorange

bernorange 8385

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58 minutes ago, FirstTimeCaller said:

Well that seems like good news

https://en.wikipedia.org/wiki/The_old_man_lost_his_horse

~~~

It will be seen as a sign that inflation is cooling and that the Fed is closer to a pivot on QT.  The market will place bets on that expectation.  The Fed might comply.  They also might not.

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gsoda3

gsoda3 3362

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10 hours ago, 52-80 said:

CALM reports a 20% domestic market share

thanks. 

 

did you find the answer to your question in their slide deck?  i forget what you had asked. 

 

 

7 hours ago, 52-80 said:

If i was an evil capitalist chicken baron, id use the same excuse for gouging egg prices to gouge the price of the chicken too. seems like a missed opportunity..

 

in poultry everyone follows tyson's lead.  they actually did raise prices second half of last year to capture higher demand but their earnings came in weaker than expected.  off the top of my head i don't remember how poultry did vis a vis pork/beef so it could be the case poultry sales increased while other segments decreased or it could be poultry didn't do as well due to price increases etc.  

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52-80

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31 minutes ago, gsoda3 said:

thanks. 

 

did you find the answer to your question in their slide deck?  i forget what you had asked. 

i think it was somebody else with a question.
 

although i did find it interesting how the egg market isnt as consolidated as the rest of cattle/agg. and that basically #2 on down are all private companies. there must be some historical reason for that ?

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Royalfan5

Royalfan5 2384

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2 hours ago, 52-80 said:

i think it was somebody else with a question.
 

although i did find it interesting how the egg market isnt as consolidated as the rest of cattle/agg. and that basically #2 on down are all private companies. there must be some historical reason for that ?

Eggs are incredibly more consolidated that cattle, there is effectively no open market in eggs, and zero small commercial producers. Broilers are just as bad. Cattle are the least consolidated of all the livestocks, even as fucked up as the industry is. 

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HamsterHookah

HamsterHookah 112

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On 1/30/2023 at 4:37 PM, Captainant said:

Losing "billions", assuming you mean several (less than ten) billion is still a hell of a lot less than $75 billion in stock buybacks on top of record profits. Show your work and actually consider the numbers. I looked up Chevron and Exxon's financial performance over the last few years and they both posted profits - not losses - over FY21 and FY22. FY20 did have losses, but they were FAR shadowed by profits in 21 and 22. This doesn't jibe, ya turkey. 

Wow lol. When I think of successful American business, I certainly think of "lawful, ethical, and fair", and definitely not regulatory capture, fraud, and briber-i-mean-lobbying. This is impressively wide-eyed, even for you Chrispy lol

Crossposting because I thought you'd get a kick out of this and thought you'd get a nice laugh and make your day a little brighter:

Drinks on Exxon: In 2022, ExxonMobil posted the most profitable year of any Western oil company ever. Thanks to booming energy prices, Exxon made $56 billion in profit last year—equivalent to $6.3 million each hour, per Reuters. The mind-boggling earnings of Western oil giants, which are projected to have been ~$200 billion collectively last year, have also made them a political target for the Biden adminstration, which has blamed them for high gas prices.

https://www.reuters.com/business/energy/exxon-smashes-western-oil-majors-earnings-record-with-59-billion-profit-2023-01-31/

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HamsterHookah

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Powell made it clear that Americans should expect “a couple more rate hikes” going forward. The concern? Inflation is a nasty beast—there’s no guarantee it’s going to keep on falling like it has been.

And some economists have pointed to signs that activity is picking back up again right when we need it to continue slowing down: Housing demand is coming off of its lows, gas prices have climbed since December, and the labor market is still running too hot for the Fed’s liking.

Making things even dicier for Powell is the recent stock market rally. So far in 2023, investors have been gobbling up stocks as if the inflation problem has already been solved. But, in an ironic twist, their optimism that inflation is toast…could actually push inflation higher by boosting asset prices.

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25 minutes ago, Hornius Emeritus said:

So the job market is strong,  wage growth is slowing (which is what the Fed says it wants), and the lowest unemployment rate since 1969 indicates that the tech layoffs aren't causing other layoffs yet? 

I'll take it.


 

The world needs hotel porters who used to program ad-targeting for facebook too. 

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Js1

Js1 87202

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1 hour ago, Hornius Emeritus said:

So the job market is strong,  wage growth is slowing (which is what the Fed says it wants), and the lowest unemployment rate since 1969 indicates that the tech layoffs aren't causing other layoffs yet? 

I'll take it.


 

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Nice Guy Eddie

Nice Guy Eddie 13739

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1 hour ago, HamsterHookah said:

Was just going to say: trading 250,000 jobs via tech-layoff paying $130k for 750,000 jobs paying $43k via low-skill hospitality jobs isn't the win people think it is.

Some (many?) of the 250K tech folks weren't producing labor worth $130K per year. When Google fires that 23-year old with limited experience, it has zero impact on their revenue but saves them the compensation. Tech grew too fast based on pandemic needs and they needed to rebalance their labor force.

Many of the big tech firms still have more employees than they did 12 months ago.

I do feel for the under 35 crowd who have never experienced a time where someone wouldn't keep giving them raises and better jobs regardless of productivity or the economy. 

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Neonmoon

Neonmoon 38130

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3 hours ago, Horn Under a Bad Sign said:

HOLY SHIT.  Economy added 517,000 jobs in January.  Consensus was 190,000.  This is a blowout number. UE at 3.4%.

https://finance.yahoo.com/news/january-jobs-report-labor-market-economy-february-3-2023-125436675.html




 

More context for the BLS numbers. 

ADP says 106,000 added in January 2023

https://adpemploymentreport.com/

BLS data

https://www.bls.gov/news.release/archives/empsit_02032023.htm

This is an important part of the report

Quote

Effective with data for January 2023, updated population estimates were incorporated into the household survey. Population estimates for the household survey are developed by the U.S. Census Bureau. Each year, the Census Bureau updates the estimates to reflect new information and assumptions about the growth of the population since the previous decennial census. The change in population reflected in the new estimates results from adjustments for net international migration, updated vital statistics, and improvements in estimation methodology.

In accordance with usual practice, BLS will not revise the official household survey estimates for December 2022 and earlier months. However, to show the impact of the population adjustments, table B displays differences in selected December labor force series based on the old and new population estimates.

The adjustments increased the estimated size of the civilian noninstitutional population in December by 954,000, the civilian labor force by 871,000, employment by 810,000, and unemployment by 60,000. The number of persons not in the labor force increased by 82,000. Although the total unemployment rate was unaffected, the employment-population ratio and labor force participation rate each increased by 0.1 percentage point.

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HamsterHookah

HamsterHookah 112

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31 minutes ago, Nice Guy Eddie said:

Some (many?) of the 250K tech folks weren't producing labor worth $130K per year. When Google fires that 23-year old with limited experience, it has zero impact on their revenue but saves them the compensation. Tech grew too fast based on pandemic needs and they needed to rebalance their labor force.

Many of the big tech firms still have more employees than they did 12 months ago.

I do feel for the under 35 crowd who have never experienced a time where someone wouldn't keep giving them raises and better jobs regardless of productivity or the economy. 

1) agree with your first point, but my point was for overall economy (wages -> consumption/spend-> services/consumption based GDP) as well as the quality of living and quality of jobs that provide a comfortable living for people are being lost while the nominal term "jobs" are being added which are much less in quality.

2) Tech grew too fast in some instances (Google and Amazon being two culprits), but I've read data that shows that mostly the general tech hires and firms grew linearly at the same rate over time. The myth that the pandemic caused all these tech companies to hire exponentially is false.

 

YoY employee increases in Big Tech

Quote

The popular narrative right now about these layoffs is that tech companies dramatically over-hired during the pandemic, but while that seems to have happened with Amazon — and for arguably very good reasons given the way that e-commerce shot up during lockdowns in particular — the reality is that the rest of the tech companies largely increased at the same rate they always had. Sure, the number of employees they added was large, but that was a function of keeping the same hiring rate off of an ever increasing base.

3) Big tech firms still have more employees than they did 12 months ago, yes, because they are growing their people at a healthy pace.

Quote

 

In short, no one was giving up a job at one of the big five tech companies this year as fear spread about a broad-based slowdown in hiring; I have certainly heard this anecdotally. These companies, though, adjusted more slowly to the slower rate of attrition, which means they accidentally increased their headcount — that’s the theory anyways. And, to the extent that theory is right, the relatively limited size of the layoffs to date actually reflects that: these companies are not returning to their pre-pandemic levels of employees, but rather to where they would be had they kept up roughly the same rates of hiring this year that they have over the last ten.

In short, I don’t see any real indication that this spat of layoffs, at least amongst the big five, is anything other than an opportunistic cull of headcount that (1) gives investors what they want while (2) keeping the exact same sort of strategic priorities and planned employee count the exact same it was a year ago. That may be imprudent: Meta in particular should have probably cut more given the impact on their business of ATT in particular, but for now there simply isn’t much evidence that these companies over-hired or that they are truly changing anything about their employee strategy.

 

No comment on your faux-sympathetic last sentence.

Edited by HamsterHookah
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HamsterHookah

HamsterHookah 112

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1 hour ago, jimmyjazz said:

I haven't followed the tech layoffs save for a few headline stories -- are 250K workers and $130K average compensation correct numbers industry-wide?

250k is a number that is being bandied about a lot, but who knows. I've seen various numbers. Fortune said this: Layoffs in Big Tech have caused turmoil for nearly 250,000 workers in the U.S. since the start of 2022, according to Layoffs.fyi, and has led to what’s been coined as the great tech-job reshuffle. Some affected workers have taken to LinkedIn and other job boards clamoring for a new gig, while others have realized that “that their skills are still a hot commodity,” recent Fortune reporting shows. https://fortune.com/education/articles/amid-big-tech-layoffs-cybersecurity-job-losses-have-been-few-and-far-between-industry-leader-says/

As far as the average compensation I don't think there is data that supports it specifically, but $130k seems conservative (and that's not included the fully loaded cost, just the dollar compensation the employee was getting) based off: https://www.cnbc.com/2023/01/06/what-big-tech-companies-are-paying-based-on-new-public-salary-data.html

This is from a WSJ article I read today: https://www.wsj.com/articles/layoffs-labor-market-bosses-power-workplace-11675347655

 

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