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US annual inflation declines to 7.7% in October vs. 7.9% expected

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Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#191

Post by giantg2 »

lottin wrote: post #170
giantg2 wrote: post #108

Earlier quoted context omitted.

No historical data is going to tell us the future. But it can give us an idea of the trend, which is useful since in a large system like the economy the trend tends to change relatively slowly as compared to individual compentents.

A statistic is only useful if you know how to interpret it. Case in point: you can have double digit year-over-year inflation, while simultaneously falling prices for the last 11 months.

This doesn't make sense. Falling prices for what? CPI is a measure of cost of a basket of goods. You can't have net aggregate falling prices and a rising CPI unless you are measuring different prices.

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#193

Post by passwordoops »

Funny how markets and analysts lose their minds when the numbers don't match exactly the predicted when there are no error bars associated to either the estimate or the value. Coming under or over is a lot different when we're talking +/- 0.05 vs. 0.5...

And yes, I tried checking. The Fed does put out their data, but nary a precision factor to be found

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#194

Post by abeppu »

photochemsyn wrote: post #67

Isolated data points aren't really worth analyzing - something like a running 6-month average makes more sense. See this 2009 blog post on how to inflation-adjust current prices/revenues to those from decades before: > "For this exercise, we’ll use the annual average CPI-U values for 1973 (44.4) and 2008 (215.303). Because the CPI-U includes relatively volatile items such as food and fuel, I tend to avoid the monthly…

> Isolated data points aren't really worth analyzing - something like a running 6-month average makes more sense

Isn't the YoY inflation definitionally equivalent with running (geometric) mean of the past 12 (annualized) monthly increases?

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#195

Post by cwilby »

joshuahedlund wrote: post #173
danielmarkbruce wrote: post #164

Earlier quoted context omitted.

It is skewing if you are looking for an up to date change. It's like, is it better to get two points on a curved line and draw a straight line through them, or is it better to calculate the derivative and the the slope at a specific point?

That depends on how noisy or smooth the changes are. That's why it's valuable to look at both.

That literally leads to the conclusion that prices rose, in your example.

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#196

Post by wkrsz »

Why is this causing USD/EUR exchange rate to fall? And in general USD to lose value compared to other currencies.

My guess is that expectation of higher inflation was combined with expectation of further interest rate increases to combat it. Interest rate increases generally make currency more attractive for investments from abroad, which increases exchange rate.

This expectation was "priced in" current exchanged rates and now the market has corrected.

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#197

Post by noasaservice »

It's not "Inflation". It's straight up wage theft by the rich. They're jacking up prices and blaming (hand-wave) Inflation to extract more profit. And no, workers wages being bumped up to $15/hr is no excuse. Look no further than the profits.

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"Workers around the world: lost $3.7 trillion in the pandemic Billionaires around the world: gained $3.9 trillion in the pandemic

It's the biggest one-year wealth transfer in history, yet somehow barely anyone is talking about it."

https://twitter.com/danpriceseattle/status/13751892041251143...

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Iron Mountain CEO says he's been 'praying for inflation' because it means he can raise prices

https://www.businessinsider.com/ceo-praying-for-inflation-ra...

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Leading grocery chains such as Kroger (KR) and Alberstons have said in recent days that they expect to benefit from rising prices. Sales boomed at these chains and other grocers during the early stages of the pandemic, but have slowed down in recent months as more people return to eating meals out.

“Our business operates the best when inflation is about 3% to 4%,” Kroger CEO Rodney McMullen said on an earnings call with analysts Thursday. “A little bit of inflation is always good in our business.”

https://www.cnn.com/2021/06/18/business/grocery-store-inflat...

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#198

Post by aaomidi »

dmix wrote: post #189
alistairSH wrote: post #148

Earlier quoted context omitted.

Of course they are. There was a much-watched video that went around a few weeks ago that composed quite a few CEOs talking about pushing the pricing envelope to take advantage of inflation news (effectively saying: "People now expect price increases, we can leverage that to our gain!"). https://www.youtube.com/watch?v=psYyiu9j1VI

There's not really much we can do about this. Artificial price ceilings were tried in Venezuela and it only contributed significantly to their massive food shortages they experienced. Most notably it resulted in a big reduction in the variety of food available because while some of the biggest companies could survive with the new lower prices (and work with the gov directly to set those prices) the bulk of small/medi…

One thing we can do is give the NLRB actual teeth to enforce its laws.

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#199

Post by tomcam »

Pigalowda wrote: post #183
ceejayoz wrote: post #65

Earlier quoted context omitted.

How did student loan cancellation reverse inflation reduction when it's on hold due to legal challenges? No one has received a penny.

I haven’t been paying anything since non-penalized forbearance started. Why pay when interest is 0% and there’s no penalty for not paying? I’ve been using money that normally goes to loans for other bills. I imagine plenty of other people are buying more stuff with the money so i imagine it does contribute to inflation

> Why pay when interest is 0% and there’s no penalty for not paying?

Just spitballing here… But maybe you should pay because you promised to pay it, the costs were borne by the vast majority of taxpayers who did not take out such loans, and because tradesmen and other perfectly deserving parties do not get access to such easy money?

Re: US annual inflation declines to 7.7% in October vs. 7.9% expected

#200

Post by rzimmerman »

lunaru wrote: post #31

It bears repeating because this is a common mistake in inflation discussions: a decrease in inflation metrics means price increases are slowing down, it doesn’t mean that prices are going down （that would require a negative CPI print). Also, this number is year over year, so the decrease just means the price increases between Oct 21 and Oct 22 are not as steep as between Sept 21 to Sept 22, which is not hard to achie…

Yes the YoY number is useful for getting rid of seasonal variations. The monthly CPI is also noisy. But when there’s a big spike over a few months (like we had 8-16 months ago) YoY won’t go down meaningfully for at least a year.

This is actually great (if noisy) news. 2 months of 0.4% CPI increase is equivalent to 5% yearly inflation. But the YoY is still high because it was much worse 8-12 months ago.

I hadn’t even considered that people will think low numbers are a lie because prices don’t go down. But of course (sadly) you’re right.

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