Inflation is not letting up, as the June CPI came in hotter than anticipated, reaching levels not seen since 1981.  Labor markets are still strong, but inflation is eating into recent wage gains, and the risk of recession still exists.  Also returning to 80s levels is the value of the Euro!

Economics

• June CPI hit another 40+ year record at 9.1% year-over-year. Prices were up 1.3% for the month, and core inflation (without food or energy) was up 0.7%--both higher than expected/hoped for. (Yahoo Finance) (AP)
• While most talking heads on TV were gloomy, Jim Cramer of CNBC had a slightly different take on the numbers.
• Again, the word “recession” is floating around. Recessions are often officially “called” almost after the fact (2 quarters of negative GDP.) So what indicators are economists looking at for clues? (Vox)
• Retail sales rose by 1% in June, slightly more than expected.  With inflation at 1.3%, sales fell slightly in real terms.  Biggest increases in spending were found in gasoline and online sales, and in bars and restaurants. (CNBC)
• If you have twenty minutes, it might be worth listening to this Bloomberg interview of Cleveland Fed President Loretta Mester talking about the inflation report and how that and other data are considered when the Fed considers interest rate increases, and the potential for recession.
• The US fiscal budget deficit has been shrinking by record percentages this year. Pandemic outlays have wound down, and the increase in economic activity is brining in more (tax) revenue. (Reuters)
• The Euro has been hovering around parity with the US dollar for the first time in 20 years. This reflects the relative economic conditions in the EU compared to the US. Inflation is a global phenomenon, and inflation and recession risk are currently greater in Europe. Higher interest rates in the US also play a role. (CNBC) (NYT)

Investing

• The Humble Dollar gives us a different perspective on truly diversified portfolios. We usually start with a US Stock Market Index, but in the global realm, that is only 25% of total assets.
• When both stocks and bonds are down so far this year, are there situations when it still might make sense to sell? Adam Grossman gives us some examples in this Humble Dollar post.
• Housing prices may be beginning to cool down in some areas, but they are still high. Couple that with higher interest rates, and Michelle Singletary of the Washington Post suggests that now may not be the best time to buy a house.

Financial Literacy

• South Carolina is now fifteenth state with Personal Finance course requirement for graduation! (WSPA)
• The Philadelphia Inquirer reports on “Buy the Hood,” a free summer program founded by two friends in 2015 (a teacher and a real estate agent) in Philadelphia to teach children about finances, budgeting and real estate.  During the pandemic, the camp went virtual and broadened their geographic reach.  They are looking to start programs in other cities. 

Miscellaneous

• This Visual Capitalist graphic shows the net wealth required to be in the top 1% across the US.
• How many TikTok videos do you watch that look like ads? Influencers on TikTok apparently don’t get into trouble if they don’t disclose their sponsors. (Vox)

About the Author

Beth Tallman

Beth Tallman entered the working world armed with an MBA in finance and thoroughly enjoyed her first career working in manufacturing and telecommunications, including a stint overseas. She took advantage of an involuntary separation to try teaching high school math, something she had always dreamed of doing. When fate stepped in once again, Beth jumped on the opportunity to combine her passion for numbers, money, and education to develop curriculum and teach personal finance at Oberlin College. Beth now spends her time writing on personal finance and financial education, conducts student workshops, and develops finance curricula and educational content. She is also the Treasurer of Ohio Jump$tart Coalition for Personal Financial Literacy.