This and That---December 19, 2022 Edition

A few random observations, charts and factoids to provide some context on what is going on in the world.

Inflation

Inflation appears to be moderating. The CPI report for November came in at a 7.1% rate for all items over the last 12 months.

However, energy was still up 13.1% and food was up 10.6%.

If eggs and orange juice are your breakfast of choice inflation is taking a much bigger chunk out of your wallet. It is going to get worse based on current commodity prices.

Credit: https://www.loveandlemons.com/scrambled-eggs-recipe/

The average price of a dozen eggs in commodity markets is now $4.65/dozen. This is almost triple the price one year ago. The CPI number for November only reflects a 49.1% increase over the last 12 months.

Eggs were as low as $1.10/dozen last January.

Source: https://tradingeconomics.com/commodity/eggs-us

The price of orange juice is up 50% in commodity markets since the beginning of 2022.

Source: https://tradingeconomics.com/commodity/orange-juice

It is going to be interesting to see where inflation and the economy go in 2023.

Retail Sales

Retail sales in November registered their smallest increase since December, 2020 when Covid was dampening consumer demand.

This is even more significant when it is considered that November includes the traditionally large consumer spending days of Black Friday and Cyber Monday.

If these numbers were inflation-adjusted they would most likely represent a real reduction in retail sales.

Source: https://tradingeconomics.com/united-states/retail-sales-annual

Retail sales between October and November actually went down -.6% despite the holiday sales in November.

Source: https://tradingeconomics.com/united-states/retail-sales

My casual observations when I have visited the shopping mall recently is that there seems to be a lot of inventory in the stores. The supply chain issues are clearly better than they were. However, are there enough buyers for the merchandise?

For example, this is a picture I took last week of the Apple Store at a mall in Cincinnati. A year ago there would be a long line outside the store waiting to get in due to capacity controls. That is no longer the case.

There were more Apple employees than customers at about noon on a day about two weeks before Christmas.

One other data point on retail.

This is a chart showing inventory levels for the women's workout clothing retailer Lululemon.

It is showing almost $1.8 billion in inventories which is about $1 billion more in goods than it was carrying a year ago.

That is a lot of yoga pants and leggings at $100 a pair or more.

That is especially true when household budgets are being squeezed paying for essentials like food, gasoline and home heating costs.

How essential are $118 yoga pants?

We may found out soon.

Yes, it is going to be interesting to see where the economy goes in 2023.

Covid Update

The United States is on track in 2022 to have the lowest number of deaths associated with Covid since the pandemic began in 2020.

This is due in large part to the fact that deaths in the United States have been remarkably stable for the last eight months.

Source: The New York Times

However, the news is not as good in other parts of the world.

What is interesting is that many of these countries are among the most vaccinated in the world.

Each of the following nations have much higher vaccination and booster uptakes than the United States.

You certainly don't hear about this on the evening news and the data does not conform to the narrative about the effectiveness of the vaccines in preventing severe illness and death.

The most interesting fact to me is that our northern neighbor in Canada, which initiated authoritarian measures the likes of which I thought would be impossible in a free democratic society, is looking at its highest level of deaths from Covid yet in the current year. 

Canada will finish 2022 with more deaths than pre-vaccine 2020 or 2021.

The same is true in Australia which almost looked like the Chinese were in control for much of the pandemic considering the harshness of its Covid public health measures and vaccine policies.

South Korea was not as authoritarian. The population was much more willing to take the vaccines on the recommendation of the governing authorities based on cooperative culture of its society.

However, the results are hard to explain based on the narrative about the vaccines.

"Safe, effective and will prevent severe disease, hospitalization and death."

Tiny, isolated Iceland was also not able to avoid a surge in Covid deaths in 2022 

This is despite Iceland having one of the highest levels of vaccine status across all ages of any other country in the world.

Vaccination Doses by Age in Iceland
Source: https://www.covid.is/statistical-information-on-vaccination

The same is true in Taiwan. It had almost no Covid deaths until 2022 when it started administering booster doses. 

It does not appear to have had the desired effect.

In fact, you have to wonder if it did not have the opposite effect when you look at the data.

Another interesting Covid factoid is contained in looking at the wastewater monitoring data for Covid in  Santa Clara County in California.

Santa Clara County has one of the highest levels of Covid vaccinations in the United States. 89% of every man, woman and child is vaccinated. 60% are boosted.

Vaccination Status in Santa Clara County, California
Source' The New York Times

However, Santa Clara has recently shown the highest levels of Covid in its wastewater samples since the beginning of the pandemic.

The highest levels (green line) have been in the Palo Alto Sewershed which undoubtedly has the highest vaccine uptake in the county being the home of Stanford University and the epicenter of Silicon Valley.

How do you explain it?

I can't.

I just report the data.