The tame inflation report confirmed the mindset of traders that the Fed will leave interest rates unchanged at tomorrows FOMC meeting. The producer price index (PPI) rose just 0.1% in August, below the 0.3% increase that economists had predicted. To tilt the scales even more in favor of a "tame" inflation report, the core PPI plunged 0.4%. Gasoline prices and car prices were the key words in today’s analysis of the PPI report, but to add my two cents in, I think the retail sector will soon be getting the attention on its mild price increases and/or decreases.
Yesterday, I finally succumbed to my daughter’s constant begging to do the "go back to school” shopping. To her it is totally fun to go from store to store to store to find the perfect outfit for school. To me it's trying to locate a parking space that isn’t a mile away, fighting the crowds, losing part of my hearing from the LOUD music that blares in the teeny pop shops, but the icing on the cake is; I am doling out money from store to store. But, I have to tell you, the sticker shock of the prices for the clothes was a pleasant surprise. At Macy’s, I was getting clothes that were marked down 20%, then another 10% on a promotional sale and then another 20% off for using my Macy’s card. I almost felt guilty!! Another store that was a pleasant surprise was Abercrombie & Fitch; the prices seemed to be cheaper than last year. I usually have my daughter buy a few pieces at a time because it becomes too expensive, but not yesterday, I let her buy a whole outfit!! The going back to school shopping was fun for both of us!!
I know that this observation of the dynamics of the pricing structure is basic and old fashion, but when it hits your pocket book directly, it does have meaning.