Why This Money Manager Says The Latest Round Of Inflation Is Permanent

Inflation has been a confusing topic throughout the summer of 2021.

Tuesday's Consumer Price Index report showed a 0.9% increase for the month, more than double what economists were expecting.

This could alarm investors, yet the Fed has continued to call inflation "transitory."

The non-seasonally adjusted CPI rose 5.4% year-over-year — the highest level seen since August 2008.

Core-CPI rose 4.5% over the year, which is the largest increase since 1991.

Related Link: An ETF for Inflation

Why Navellier Says Inflation's 'Alive': The producer price index rose 1% in June, surpassing economist expectations of 0.6%, money manager Louis Navellier said in a Wednesday newsletter. 

Approximately 60% of the PPI increase came from higher service costs, which tend not to backtrack, substantiating claims that “inflation is alive and still increasing” and “the latest round of inflation is now permanent,” he said. 

One macro cause of the inflationary environment is a materials/supply shortage that comes amid increasing business and consumer demand, said Navellier.

As supply catches up with demand, upward pressures on inflation should moderate, he said.

China, however, posted 36.7% and 32.2% increases in imports and exports, respectively, for June, indicating the “demand push will likely persist,” said Navellier.

About Navellier: Navellier is the chairman and co-founder of Reno, Nevada-based Navellier & Associates, which manages $2.5 billion in assets. He also writes four growth investment-focused newsletters and often provides market outlook and analysis on Bloomberg, Fox News and CNBC.

Related Link: What To Do When Inflation Sticks Around