Enjoy the experience of our restaurant.
Register to know our latest news.



Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt.


Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt.


Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt.


Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt.

December 16, 2022

Economic Perspectives

Steve Scranton

SVP, Chief Investment Officer and Economist


Today’s Perspectives revisits the topic of inflation and tries to provide some perspective on the “real world” impact for the average worker. Economists, analysts, and the media may say it is great news that the inflation rate has peaked and is coming down. The average worker is probably saying “What are you talking about? My paycheck still does not cover the increases in my expenses.” Not to be too graphic, but the analogy for what the average worker is experiencing is that the bleeding has slowed but they are still bleeding since price increases are still faster than wage increases.

The table at the end of this newsletter breaks down the various items included in the inflation calculation and shows the year-over-year growth for each category. 

  • The data being analyzed is from the Bureau of Labor Statistics as of 11/30/22.
  • The second column shows the percentage weight that each item makes up of the total inflation calculation and the third column is the year-over-year increase.
  • The items in each major category are sorted from smallest to largest year-over-year increase.


  • The official inflation rate has clearly peaked, and the size of the price increases is slowing.
  • The problem for the average worker is that most prices are still rising, just at a slower pace.
  • The average worker has experienced 20 consecutive months of negative wage growth once inflation is factored in.
  • The inflation rate may be slowing but prices are still higher than 12/31/19.
  • The expenses that matter the most to consumers — core expenses — are rising faster than the official inflation rate.


  • It is unlikely that anyone purchases all the items that comprise the Consumer Price Index.
    • This is why I say that inflation is unique to each person depending on what you buy.
  • It is also unlikely that people buy every item on their shopping list monthly. This may delay the impact of price increases until the point in time when they need to buy the item again.Auto purchases (new or used) are an example of this.
    • Auto purchases typically occur every 3-5 years.
    • With the surge in auto prices, people may hold on to their vehicles longer than they normally do. When you see zero percent financing offered or extended term financing, you will know that the auto companies are feeling the effects of reduced demand. 
  • Year-over-year core expense growth continues to rise faster than the overall inflation rate
    • Official Consumer Price Index 1%
    • Rent                     + 1%
    • Gasoline         +10.1%
    • Food               +10.6%
    • Electricity       +13.7%
    • Natural gas    +15.5%
    • Diesel            +65.7%
  • Shelter (rent) makes up the biggest weighting for the calculation of inflation. It may make up an even bigger weighting for the average worker since they do not buy all of the items included in the CPI calculation.
    • Except for those on month-to-month rent, the average worker does not experience monthly increases in shelter costs. For most it is an annual increase. As a result, many people may be facing rent increases in 2023. The month when the rent may increase will depend on when they signed their lease.
    • People on month-to-month rents experienced the rent increases far sooner but will experience declines in rental rates sooner as well.



  • Economists, analysts, and the media may tout how wonderful it is that the inflation rate is falling, and that inflation is now “only” 7.1%. The average worker most likely disagrees. In real world terms, core expenses (food, energy, and shelter) consumed 39% of the average worker’s paycheck in November 2021. Today, that percentage remains at 39%. The inflation rate may have come down, but the average worker has not seen their financial condition improve.
  • This inflation cycle has been especially damaging for low income workers because some of the biggest price increases have occurred in core goods (food, energy, shelter).
    • They do not have the option to simply stop buying the items.
    • Instead, they are forced to make potential life altering decisions to reduce their expenses and survive.
  • I believe it is important to frame economic data in the context of the average worker. The average worker deals in real world dollars and cents versus economic growth rates. To me, understanding how economic data impacts the average worker is what is important. So, translating economic data into what the real world impact is to the average worker will help us understand the impact to the economy. Since consumer spending remains the biggest force to US economic growth, understanding how the average worker is impacted is key.
  • For many workers, especially the lower brackets of wage earners, the light at the end of the tunnel may still look more like an incoming freight train. 


Economic Data

This week’s economic data showed clear evidence of an economy that is slowing, as much of the economic data showed deterioration from the previous month’s data. 


  • The Department of Labor continues to confound economists and analysts as they announced a 20,000 decrease in initial jobless claims. Total initial jobless claims are now 211,000. Despite all of the layoff announcements, it appears that laid off workers are quickly finding new jobs. Total continuing claims rose by 1,000 and are now at 1,671,000.


  • The Mortgage Banker Association reported a 3.2% increase in mortgage applications last week. A drop in mortgage rates and slow declines in home prices appears to have brought buyers back into the market last week.


  • The Bureau of Labor Statistics (BLS) reported a continued slowing in the US inflation rate as measured by the Consumer Price Index (CPI). The CPI rose 0.1% for the month of November compared to 0.4% in October. This was better than the median forecast of a 0.3% increase. On a year-over-year basis, CPI rose 7.1% after rising 7.7% in October. This was also better than the 7.3% median forecast. While that may make financial market participants happy it is nothing to cheer about for the average worker. Real average hourly earnings (earning after inflation) fell 1.9% on a year-over-year basis and real average weekly earnings fell 3.0%. This is the 20th consecutive month where expenses rose faster than wages.
  • The Bureau of Labor Statistics (BLS) reported a 0.6% decline in import prices in November. This was a bigger drop than the 0.4% decline in October. On a year-over-year basis, import prices rose 2.7% after rising 4.1% in October. Export prices fell 0.3% after falling 0.4% in October and, on a year-over-year basis rose 6.3% after rising 7.4% in October.


  • The New York Federal Reserve reported a large deterioration in its manufacturing index for December. The index fell from a reading of +11.4 in November to -11.2 in December. This indicates manufacturing activity in the New York regions is declining.
  • The Philadelphia Federal Reserve reported manufacturing activity in its region continued to contract, but at a slower pace. Its manufacturing index improved to -13.8 in December compared to -19.4 in November.
  • The Federal Reserve reported further deterioration in industrial production in November. Industrial production fell 0.2% after falling 0.1% in October.
  • The Federal Reserve also reported its manufacturing index fell 0.6% in November after rising 0.3% in October.

Retail Sales

  • The Census Bureau reported a 0.6% decline in retail sales in November. This was worse than the median forecast of a 0.2% decline and a large drop from the 1.3% increase in October. Motor Vehicle & Parts Dealers, Furniture & Home Furnishing, Building Materials & Garden Supplies and Department Stores all saw a monthly decline of over 2%. Food Services & Drinking Places had the best increase at 0.9% followed by Grocery Stores at 0.8% and Health & Personal Care Stores at 0.7%. This may be the first sign that consumers may be reaching the limits of using savings and credit cards to maintain spending.

Small Businesses

  • The NFIB reported a slight increase in its Small Business Optimism Index. The index rose from 91.3 to 91.9 which was better than the median forecast of a 90.5 reading. The index continues to stay below its 49 year average. Inflation continues to be the top rated challenge for small businesses. Filling open jobs also remains a challenge as 44% of the survey respondents reported they could not fill open job positions.


As the holiday season approaches, enjoy time with your loved ones and friends this weekend.

Patrick Dawson


Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book.

It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged.

Lorem Ipsum is simply dummy text of the printing and typesetting industry.


Enjoy our meals. You can click each menu to display more information.


Seafood Platter