Wal-Mart’s “Always Low” prices starting to edge up.

Patrick McKeever of MKM Partners says prices at Wal-Mart have edged higher in recent months:

In a note last week, retail analyst Patrick McKeever of MKM Partners, identified what he calls a “small, but meaningful increase” in the price of 86 Wal-Mart items he tracks on a regulator basis. The average price is up 0.6 percent in the last two months. On an annual rate, that’s about a four percent inflation rate.

Photographic evidence here.

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What is going on in Silicon Valley?

Consider:

  • Tired of defections to Facebook and elsewhere, Google is offering all of its employees a 10 percent salary increase.
  • Twenty-five employees fired by Digg were immediately approached by other companies, including Twitter and Groupon.
  • Talented college grads with no work experience are reportedly getting job offers paying $120,000 or (much)  more.
  • I.T. job postings are booming.
  • Start-ups are being acquired just for their employees. Derek Andersen: “[L]ook at the number of companies getting acquired for talent by Google, Facebook, and now LinkedIn. Seems like someone is getting bought for talent every other week. It hasn’t been that way for a couple of years. A top tier developer friend recently told me that he’s been encouraged by many to start a company and sell to Google/Yahoo in 6-months for a big check just to acquire the team. I believe it’s 100% realistic.”

Something is happening here, and it sure ain’t deflation.

Related:

Is The Silicon Valley Talent Shortage Getting Worse?

Silicon Valley and the  Talent Crunch


As inflation expectations continue to rise, long bond continues to sag

Prices of long-dated treasuries continue to fall, meaning yields are rising. Below is the chart for the iShares Barclays 20-year Treasury Bond Fund (ticker: TLT).

TLT is looking sickly lately

The interest rate on the 30-year treasury bond is now 4.25 percent, up from 3.52 percent on August 31, 2010. (Disclosure: the author is currently long TLT.)


Party like it’s 1999!

If Google wants to provide free servants to its employees, that’s fine by me. (Hey, I’m a happy GOOG shareholder.)

But we here at Inflation Watch would be remiss if we didn’t notice that something interesting is going on in the Silicon Valley labor market.

As Gawker reports:

Tech companies in recent months have reported a shortage of programmers as they snap up more and more talent. Google and Facebook are competing so fiercely over some engineers that half-million-dollar retention bonuses are not unheard of. And they’re not the only ones vying for talent; flush with venture capital, Twitter is on a hiring spree, as are AmazonFoursquareZynga and other startups.

Hiring sprees? Free servants?  Half-million dollar retention bonuses? Doesn’t sound like a deflationary spiral to me.


Toyota may raise prices to counter weak yen

As the dollar weakens, Americans are likely to pay more for goods imported from other countries. Thus, it is not surprising to learn that Toyota is mulling higher prices for autos it exports to the U.S. MarketWatch:

Toyota Motor Corp.  is considering raising the prices of some of its export models in the U.S. to counter the impact of the strong yen, the Yomiuri Shimbun reported in its Wednesday morning edition. The company may raise the prices of some of its 2012 export models–including the Prius hybrid, the Corolla and upscale Lexus models–which go on sale in the U.S. from next year, the report said. But to stop the move having an overly negative effect on sales, the automaker will raise prices by only a few percent, the report added.

Related: Nintendo swings to a loss, in part because of the stronger Yen.


Jones Group, VF Corp. plan to raise clothing prices

Dow Jones Newswire reports that two apparel companies are planning to hike prices in response to higher commodity costs:

Jones Group Inc.’s (JNY) disappointing third-quarter results sparked a sell-off in the apparel sector Wednesday, as soaring raw material costs weighed on margins and sparked fears ahead of a slew of upcoming earnings reports in the group. Apparel makers and retailers had generally been optimistic about how they plan to mitigate rising raw materials costs. Cotton prices, for one, have repeatedly reset all-time highs in recent weeks as uncooperative weather in key cotton-producing regions has squeezed inventories since the beginning of the year But fears were stoked Wednesday after Jones Group’s margins contracted to 33.5% from 35.6% due to the higher costs. Cotton prices, meanwhile, hit an all-time record high of $1.305 a pound on Tuesday. Jones Group shares tumbled 22.6% to $15.10 in recent trading, dragging down other apparel stocks such as VF Corp. (VFC), Liz Claiborne Inc. (LIZ), Volcom Inc. (VLCM), Guess Inc. (GES) and Hanesbrands Inc. (HBI), all of which were down between 3.5% and 7% on higher-than-average trading volume… Jones Group Chief Executive Wesley Card said on a conference call that the company will look to offset the higher cotton costs by raising prices on its products–considered risky with continuing signs of belt-tightening among consumers. Similar concerns are haunting apparel company VF Corp. During its third-quarter earnings call last week, Chief Financial Officer Richard Shearer noted cotton prices are likely to rise to higher levels than the company envisioned, and it’s planning for selective price increases.

Jones Group has a bunch of brands I’ve never heard of. VF Corp. makes Lee and Wrangler Jeans.


Big Oil reports higher earnings due to higher energy prices

Yahoo! News:

Royal Dutch Shell Plc beat all analyst forecasts by reporting an 18 percent jump in third-quarter profits thanks to higher oil and gas prices, setting a trend for the sector… ConocoPhillips, the third-largest U.S. oil company, said on Wednesday that its quarterly profit more than doubled. Both companies were helped by a 12 percent rise in crude prices compared to the third quarter of 2009, while U.S. natural gas prices were 29 percent higher and British gas prices doubled.