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US Consumer Price Index up 4.2%

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Re: US Consumer Price Index up 4.2%

#231

Post by nonethewiser »

JumpCrisscross wrote: post #51

Up 4.2% (2.9% core, i.e. stripping out food and energy) over the last 12 months before seasonal adjustment. The higher-frequency data are more concerning. CPI “increased 0.5 percent on a seasonally adjusted basis in May, after rising 0.6 percent in April” and 0.9 percent in March [1]. (0.3, 0.2, 0.3 percent for December, January, February, respectively.) So a linear trend of 6% from March, closer to 9% if one extrapo…

> Together with the jobs numbers, it would be weird for an independent Fed to not raise rates.

Not really. They may believe the inflation is driven by supply shocks, not excess demand. For example, the oil blockade. Raising already restrictive rates wont increase the supply of oil.

They don't even need to be right. If they simply believe this is what's driving inflation, they could decline to raise rates without that necessarily indicating a lack of independence.

Personally I expect the FED not to be independent and to let inflation run a little hot while lowering rates to attack the debt from 2 angles. But even still, its not true that high CPI + not lowering rates = non-independent fed

Re: US Consumer Price Index up 4.2%

#232

Post by mono442 »

JumpCrisscross wrote: post #206
jmyeet wrote: post #183

Earlier quoted context omitted.

You mean with the greatest wealth transfer to the wealthy in history that added a quarter to our entire national debt? Yeah, you can't do that often. The US national debt is about to hit $40 trillion. It was $20 trillion 9 years ago. What Trump and Biden should've done is implemented a windfall profits tax of probably 80%. But there's absolutely zero chance of that happening by either party.

> mean with the greatest wealth transfer to the wealthy in history that added a quarter to our entire national debt? The national debt was added before the inflation took hold to counter the Covid recession. (When the MMT nutters were at the helm.) Powell cured the resulting inflation without causing a recession. He did that without adding anything to our national debt. > What Trump and Biden should've done is implem…

> Powell cured the resulting inflation without causing a recession. He did that without adding anything to our national debt.

That doesn't actually seem like a huge achievement. Inflation is the rate of change so if you stop creating as much money out of thin air, then it's not really a surprise that prices don't increase as much.

Re: US Consumer Price Index up 4.2%

#233

Post by thisisit »

dw_arthur wrote: post #93

Paradoxically, inflation has contributed to me taking a sabbatical. While I live in a LCOL area and made ~140k/year it just no longer felt worth it to work as I saw my retirement accounts start to match and exceed my salary in yearly gains. I do plan on going back to work in a part time manner, but inflation has killed any reason for me to work hard at a job for that level of salary. Furthermore, the feeling of "what…

I understand that salaries might have been stagnant and with wages not keeping with inflation it doesn't seem to make sense to continue working.

The stock market often aligns with inflation. After all if the companies growth is not beating inflation what exactly is the point really? But that also comes at the expense of not paying people their due worth and incrementing below inflation rate.

But past returns do not guarantee future results. Stock markets ebbs and flows. It will take a blip, not even a crash, to impact those retirement accounts.

IMO this is a risky idea especially if there are jobs available.

Re: US Consumer Price Index up 4.2%

#234

Post by JumpCrisscross »

mono442 wrote: post #232
JumpCrisscross wrote: post #206

Earlier quoted context omitted.

> mean with the greatest wealth transfer to the wealthy in history that added a quarter to our entire national debt? The national debt was added before the inflation took hold to counter the Covid recession. (When the MMT nutters were at the helm.) Powell cured the resulting inflation without causing a recession. He did that without adding anything to our national debt. > What Trump and Biden should've done is implem…

> Powell cured the resulting inflation without causing a recession. He did that without adding anything to our national debt. That doesn't actually seem like a huge achievement. Inflation is the rate of change so if you stop creating as much money out of thin air, then it's not really a surprise that prices don't increase as much.

> That doesn't actually seem like a huge achievement

Historically, it has been.

> Inflation is the rate of change so if you stop creating as much money out of thin air, then it's not really a surprise that prices don't increase as much

You're confusing money supply and price levels. Inflation measures the latter. You can have constant money supply and stable prices, inflation or deflation. And since most money is privately created, controlling how much money is and isn't created "out of thin air" is actually quite challenging.

Re: US Consumer Price Index up 4.2%

#235

Post by fireflash38 »

mrtksn wrote: post #225
foobarian wrote: post #195

Earlier quoted context omitted.

Reminds me of stories from ex-Yu during high inflation periods (e.g. yearly doubling; not counting periods when there were runaway spikes of almost daily doubling) when people would go to remote areas where shops didn't yet get the updated prices from headquarters and basically walked away with a bunch of near free stuff.

Small independent shops are often having trouble with keeping up with the prices, so checking out those shops sometimes yields great deals.

They should clearly buy e-ink price displays! /s

Re: US Consumer Price Index up 4.2%

#236

Post by Balgair »

Serious question here: Can we trust these numbers out of this admin? I've not been super plugged into the latest news out of the BLS, but I seem to remember a lot of political firings in the 'econ' part of the government.

I do not mean to be glib here either or start a flame war. I am genuinely asking.

Re: US Consumer Price Index up 4.2%

#237

Post by JumpCrisscross »

nonethewiser wrote: post #231
JumpCrisscross wrote: post #51

Up 4.2% (2.9% core, i.e. stripping out food and energy) over the last 12 months before seasonal adjustment. The higher-frequency data are more concerning. CPI “increased 0.5 percent on a seasonally adjusted basis in May, after rising 0.6 percent in April” and 0.9 percent in March [1]. (0.3, 0.2, 0.3 percent for December, January, February, respectively.) So a linear trend of 6% from March, closer to 9% if one extrapo…

> Together with the jobs numbers, it would be weird for an independent Fed to not raise rates. Not really. They may believe the inflation is driven by supply shocks, not excess demand. For example, the oil blockade. Raising already restrictive rates wont increase the supply of oil. They don't even need to be right. If they simply believe this is what's driving inflation, they could decline to raise rates without that…

> They may believe the inflation is driven by supply shocks, not excess demand

Fair enough, I regret my edit. It would be unusualy for the Fed not to hold or raise rates.

Lowering rates, on the other hand, would be a clear WTF move.

Re: US Consumer Price Index up 4.2%

#238

Post by mono442 »

JumpCrisscross wrote: post #234
mono442 wrote: post #232

Earlier quoted context omitted.

> Powell cured the resulting inflation without causing a recession. He did that without adding anything to our national debt. That doesn't actually seem like a huge achievement. Inflation is the rate of change so if you stop creating as much money out of thin air, then it's not really a surprise that prices don't increase as much.

> That doesn't actually seem like a huge achievement Historically, it has been. > Inflation is the rate of change so if you stop creating as much money out of thin air, then it's not really a surprise that prices don't increase as much You're confusing money supply and price levels. Inflation measures the latter. You can have constant money supply and stable prices, inflation or deflation. And since most money is pri…

> You're confusing money supply and price levels.

They're closely related.

> And since most money is privately created, controlling how much money is and isn't created "out of thin air" is actually quite challenging.

It's the central bank which controls the interest rates, the reserve requirement and other stuff which affects it.

Re: US Consumer Price Index up 4.2%

#239

Post by JumpCrisscross »

mono442 wrote: post #238
JumpCrisscross wrote: post #234

Earlier quoted context omitted.

> That doesn't actually seem like a huge achievement Historically, it has been. > Inflation is the rate of change so if you stop creating as much money out of thin air, then it's not really a surprise that prices don't increase as much You're confusing money supply and price levels. Inflation measures the latter. You can have constant money supply and stable prices, inflation or deflation. And since most money is pri…

> You're confusing money supply and price levels. They're closely related. > And since most money is privately created, controlling how much money is and isn't created "out of thin air" is actually quite challenging. It's the central bank which controls the interest rates, the reserve requirement and other stuff which affects it.

> They're closely related

But not the same. In this case, the difference is material.

> It's the central bank which controls the interest rates, the reserve requirement and other stuff which affects it

Affects. But does not control. That's what makes it challenging.

To my memory, a soft landing from 5+ percent inflation has been achieved precisely once in modern monetary history. (And not for lack of trying.)

Re: US Consumer Price Index up 4.2%

#240

Post by fluoridation »

jr3592 wrote: post #229
fluoridation wrote: post #194

Earlier quoted context omitted.

>The value of your savings is decreasing at a faster rate than ever before, so its a good time to stop saving and spend it? Inflation does incentivize spending, yes. Would you rather have 100 kilos of rice today, or wait and have 99 kilos of rice tomorrow for the same price?

> Inflation does incentivize spending, yes. All inflation incentivizes is finding an asset class that isn't devaluing. If that is what you mean by "spending" then we align. But does inflation incentivize spending money on depreciating assets? Only for fools.

??? "All" it incentivizes? Uh, no. The vast majority of people don't treat their salaries as an investment opportunity, they have to live off it. If you need to fix your water heater, you might get it fixed now while inflation is high than wait until winter (not a great example given the time scales involved, but it gets the point across). Even if you have nothing that you desperately need, if inflation is really high you might blow it on something frivolous because if you try saving it it won't be worth anything in one or two year's time.

Inflation doesn't push people towards non-devaluating assets, it pushes people to get rid of currency by any means they have available.

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