Since being posted on YouTube June 11, it’s gotten 3,350,833 views. Granted, I alone count for 50 or more. But still, the video’s view count speaks for itself.

Here’s what I said in June: “Priceless video on pricey food culture. Legit music too.”

To this I’ll just add three quick reasons why it’s the best viral video of 2011:

(1) There’s no other pop culture bit that captures yuppie first world problems (and accompanying inner monologue) better, (2) Its genius lies in simultaneously ripping and supporting Whole Foods with dead-on knowledge of the food chain and its clientele, and (3) first-ever rap video with DJ scratching in the back of a Prius.

The video was done by Fog & Smog films, a creative crew from LA and the SF Bay Area. They’ve done two other videos since that are both good, plus an ad for Hyundai. Well deserved success, and I hope this crew has more big wins.

And now for their main attraction:

June Retail Sales
-Overall Retail Sales Month/Month: +0.1%
-Retail Sales less autos Month/Month: +0.0%
-This dismal Retail Sales gain is indicative of flat GDP.

Initial Jobless Claims
- 405,000 for week ended July 9, down 22k from previous week
- 4-week Moving Average 423,250, down 3,750 from previous week
-While this number is better that the prior (initially 418,000 and revised to 427,000), there is a psychological barrier at 400,000. No one is going to celebrate for the jobs market until such time as the 4-week average gets under 400,000.

Business Inventories
-Inventories – Month/Month change +1.0 %
-We again have business at +1.0% getting ahead of the consumer at +0.1% in Retail Sales.
-Business spending for inventories will contract to make up the difference.
-Business inventories are the dollar amount (at cost) of inventories held by manufacturers, wholesalers, and retailers.

One final word on yesterday’s Treasury market: the market sold early (higher yields) as Bernanke indicated the possibility of QE3. A very successful reopening of the $21 billion 10-year Treasury auction brought yields down post-Bernanke.

Mortgage Applications:
Purchase Index – Week/Week Change 4.5 %
Refinance Index – Week/Week Change 16.5 %
Composite Index – Week/Week Change 13.0 %
Refi index driven by low rates but purchase index is a ray of hope.

Industrial Production
Month/Month change +0.1 %
Capacity Utilization Rate – 76.7 %.

Meanwhile rates are up as mortgage bonds sell sharply (FNMA 4% coupon -62 basis points) on inflation worries in the U.S. and especially China. Rates rise when bond prices drop in a selloff, and bonds sell on inflation threats because inflation reduces buying power of a bond’s future cash flows. Today’s U.S. and China inflation data below.

U.S. May producer prices, a measure of manufacturing inflation, were relatively flat at 0.2 for the month but very high at 7.3% since May 2010. Excluding volatile food and gas prices, PPI was 0.2% for May and 2.1% since May 2010.

May consumer inflation in China rose 5.5% since May 2010, its highest level in three years, and economists don’t see relief soon.

Bonds are topped out at the 200-day moving average so, while a further rally (that would bring lower rates) looks unlikely, a steep price drop (that would cause rates to spike) isn’t justified by economic data. Rates are fantastic, and below is a preview of the rate week ahead.

First, a word on last week’s “low” consumer and producer inflation shown in the accompanying table.

Yearly consumer and producer inflation figures appear tame … if you focus on the “Core” figures which exclude food and energy. This is what the Fed does because they say food and energy prices are too volatile short-term to dictate monetary policy.

But it’s not only monetary policy that dictates consumer mortgage rates. Day-to-day, it’s mortgage bonds that dictate mortgage rates.

If bond markets see inflation trends, they tend to sell, pushing rates higher. This happens because bonds pay investors fixed income each year. If inflation sets in, it erodes the buying power of that future bond income. This causes investors to sell, bond prices to drop, and yields (or rates) to rise.

So while rates are low as bonds rally on bad economic news, bond markets are more sensitive to all-inclusive inflation numbers than the Fed. Those figures are called “All” in the table, and you’ll see they’re much higher (than Core) for consumers and especially producers.

Next week, bond investors will get more producer inflation inputs Monday and Thursday from New York and Philadelphia regional manufacturing surveys. These surveys have shown higher inflation in recent months, and rates will rise slightly if the trend continues.

Bond markets will also digest April housing starts Tuesday and April existing home sales Thursday. These numbers may show a continued weak trend which will help rates.

The jobs picture is slightly weaker which also helps bonds and rates. Thursday’s initial unemployment insurance claims figure will be the latest read.

After three weeks of rising jobless claims, last week’s claims (reported May 12 for the week ending May 7) decreased by 44k, and the four-week moving average of new claims rose 4,500 to 436,750.

Stay tuned, and hope you have a great week.

Today’s first link on food inflation and last link from working class rappers are both dedicated to former mirror foggers “hungry trying to get the meal.” In between is the latest zero-down gimmickry and analysis on home affordability.

-Facts behind recent rise in food prices (FarmGateBlog via Points&Figures)

-Harvard Study: 25% of Renters Spend 50%+ of Income On Rent (NationalMortgagePro and Harvard)

-No Money Down Is Back! (for rocket scientists only) (Nick Timiraos, WSJ)

-This GRAPHIC Explains A Lot: “Subprime Is Back!″ (TheBasisPoint 11/2010)

-The Housing Bear Climbs Over The Mountain (Credit Writedowns)

-Quality Control by Jurassic 5. Real loan agents live by these words (vid below)

-Domain name price inflation (Paul Kedrosky) and buying tips (Fred Wilson)

-President Trump: “I’m Very Serious” (BusinessWeek)

-Just when you though American politics couldn’t get more bizarre (Economist)

-The Milkman Indicator, great primer on food inflation (DailyReckoning)

-Man in cow suit robs Walmart of 26 gallons of milk (InsideNova)

The Fed’s preferred measure of inflation, the Personal Consumption Expenditures Index (PCE), showed inflation was up 0.4% in February and up 1.6% since a year ago. Removing oil and food prices, “Core” inflation was up 0.2% in February and up 0.9% since a year ago. The Fed often argues that food and energy are too volatile to count short-term, but even the Fed’s favored Core PCE inflation is trending up since October. Bonds tend to sell on such trends, which is how bonds opened but have since recovered to flat after the pending home sales data (below).

Personal income was only up 0.3% in February vs. 1.2% jump last month, and February savings is still a bit high at 5.8% vs. 6.1% last month. Consumer spending was up 0.3% in February after being flat last month. Here’s a full summary and table.

And pending home sales rose 2.1% in February. Bonds improved after this report beat expectations of 0.3% and was an improvement over the 2.8% drop last month. But it’s still down 8.9% from a year ago, and is the latest reminder that housing is still the weak spot in the economic recovery.

First business inflation: The February Chicago Purchasing Managers Index is the first of three monthly manufacturing surveys to be released this week, and showed the highest manufacturing activity since July 2008. See p.2 of report for purchasing manager’s comments on higher inflation. And consumer inflation: the Fed’s preferred measure of inflation, the Personal Consumption Expenditures Index, showed inflation was up 0.3% in January and up 1.2% since a year ago. Removing more volatile oil and food prices from the readings, inflation was up 0.1% in January and up 0.8% since a year ago. Personal income jumped 1% in January, and savings was 5.8%—both numbers are rather high. The table below has all consumer income and spending details.