The CPI, PPI, CSI, Tariffs, Dick's & Foot Locker, Rite Aid, Warren Buffett, Jamal Roberts, and Memorial Day.
Economically Speaking
The CPI – Consumer Price Index – a key measure of inflation, dropped. Not much, but it dropped.
Year over year, prices increased 2.3%, down from 2.4% a month earlier.
That was the smallest increase in almost four years.
More significantly, grocery prices dropped 0.4% from March to April.
This was the biggest decline since September, 2020.
Egg prices fell 12.7%, but they are still 49% higher than a year ago.
The Core CPI (not counting food and fuel), increased 2.8% from a year ago, the same as expected and the same as the previous month.
Overall, the effect of tariffs has not trickled down to the consumer yet.
And then there’s the PPI – Producer Price Index – the business measurement of inflation.
Year over year, the PPI dropped from 3.4% to 2.4%. That’s huge.
The core PPI dropped from 3.5% to 2.9%. Also significant.
There’s looking back, and then there’s looking forward.
Consumer sentiment fell for the fifth consecutive month. It went from 52.2 to 50.8. Expectations were for 53.5. These are very low numbers.
Consumer sentiment peaked at 112 in January, 2000. That was just before the dot.com bubble burst.
These numbers are driven by expectations going forward and perceptions of what has been happening. In other words, fears of tariffs are driving the sentiment numbers.
Stories This Week…
The U.S. and Chinese governments happened to run into each other at the residence of the Swiss Ambassador to the United Nations last weekend.
Tariffs were dropped to 10% by both countries, with the U.S. tagging an additional 20% until China can demonstrate an impact in reducing shipments of fentanyl over the southern border. Yes, that’s a thing.
There are still other, higher tariffs, such as cars and steel, but that should sort itself out over the next 90 days.
Dick’s finds a good fit with Foot Locker – Dick’s Sporting Goods is paying $2,400,000,000 for Foot Locker.
They are paying Footlocker Shareholders $24 for each share of stock. The day before, the stock was $12.87.
The last time it was $24 was December of last year. I’m guessing that Dick’s thought that was a bargain, since its down likely due to tariffs.
Here is a bit of business trivia for you: I could not find a record of a Fortune 500 merger where both CEOs were women. Now that’s a topic for your next mixer.
If someone knows of one, I’m happy to hear it.
Rite Aid – you may have heard that Rite Aid filed for bankruptcy on May 5. That is the second time in 19 months. This time, it’s for good. To quote the CEO “We are not going to emerge from bankruptcy. Once our assets are sold, Rite Aid will no longer exist.”
For those fans of Thrifty Ice Cream, Rite Aid bought that brand in 1996. I don’t think it’s likely that it will continue.
Warren Buffett is retiring. Yes, that was news from two weeks ago, but even late, it bears reporting. Why?
If I had taken the $2000 that I had saved from working the L.A. Olympics in 1984, and bought one share of Berkshire Hathaway at $1,250, I would have $770,660 today.
Mic drop.
Only in America
As Yakoff Smirnoff used to say (Google it): “What a country!”
The finale of American Idol was last night. The winner, Jamal Roberts, is from the town of Meridian, Mississippi.
Because of my Alabama bank, I happened to make a stop for some business in Meridian. I can tell you they are very excited.
Meridian is the 8th largest city in the state of Mississippi with a population of… 34,466.
31.9% are below the poverty line.
Jamal is a PE teacher and coach at Crestwood Elementary School and has been singing since he was two years old.
Like many Idol contestants, including both of the other finalists, he also sang in church.
Many of the 100+ contestants who qualify to compete come from small towns throughout the United States and sometimes even outside the USA.
Almost without exception, all display a strong sense of humility, and most have a strong commitment to their faith.
It can be moving to hear some of the backstories behind their journey to the audition. It gives you a very real sense of what most of the country is like, once you get away from the big coastal cities.
All of them have a dream of being the next American Idol.
For Jamal, that dream has come true.
It’s Memorial Day – Monday, May 26
Next Monday is Memorial Day, traditionally the start of summer in the USA.
It also marks the time of year when prospects put off all future sales appointments until September.
This is a federal holiday observed (not celebrated) on the last Monday of May. This date has been set since 1971.
I say “observed” because the whole point is to remember our military service men and women who have died during military service for the United States of America.
It is Veterans Day in November that we celebrate living service members, past and present, in case you are keeping track.
Many states and cities lay claim to starting it, but generally speaking, it started as Decoration Day in the 1860s during the Civil War.
In 2000, Congress passed the National Moment of Remembrance Act. This asks all citizens to stop and remember these service members at 3:00 p.m. Or, more appropriately, 1500 hours.
My ask this week is as follows:
Survey your employees and learn if any of their family members died in service to their country.
Then, thank them for their family’s sacrifice.
Whether you are grilling, swimming, driving, or picnicking, please make a point of setting your phone to ping at 1500 hours on Monday. You can even ask Alexa, Siri, or Google; they will be happy to track your activity. They kind of do it already, anyway.
Enjoy the weekend while remembering why we have it.
