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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

#151

Post by vsareto »

hristov wrote: post #123
hnburnsy wrote: post #94

Anyone notice that brand name soda (looking at you Coke) has increased almost 100% while the generic/house brand has had slight increases. I feel like Coke is testing the pricing limits of its customers especially with the smaller packaging and these prices will not come back down.

Then buy generic. This is one way to fight inflation. Coke will get the message very quickly if their sales start coming down.

If you drink neither and choose water, then it'll really come down. Bonus: you'll feel better

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

#152

Post by ragazzina »

hristov wrote: post #123
hnburnsy wrote: post #94

Anyone notice that brand name soda (looking at you Coke) has increased almost 100% while the generic/house brand has had slight increases. I feel like Coke is testing the pricing limits of its customers especially with the smaller packaging and these prices will not come back down.

Then buy generic. This is one way to fight inflation. Coke will get the message very quickly if their sales start coming down.

If GP comment is right, and the price of Coke has really increased 100%, the sales would have to decrease by half before they were hurt in the profits.

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

#153

Post by mikem170 »

koolba wrote: post #96
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.

> No one has received a penny. The Biden administration mailed student loan checks to people (conveniently set up to arrive just before the most recent midterm): https://www.foxbusiness.com/personal-finance/student-loan-re... The checks are "rebates" for people who paid their student loans during the moratorium. The idea is to reimburse those people and add back their student loan debt so they can claim the maximum $…

I'm not following your point about student loan debt relief impacting the economy. It seems that money has not yet been released yet. From your link [0]:

> "If you made voluntary payments during the payment pause (from March 13, 2020, through Dec. 31, 2022) and your current loan balance is below the amount of debt relief you’ll receive, after you successfully apply for and receive debt relief under the administration's debt relief plan, we’ll automatically refund the amount you paid during the payment pause (only up to the remaining amount of your eligible debt relief)," the Office of Federal Student Aid states on its website.

> But that plan is currently being challenged in court. A federal appeals court on Oct. 21 issued a temporary block on the student loan forgiveness program as it considers legal challenges raised by six states: Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina.

I didn't see anything corroborating your statement that checks were mailed out. Maybe I missed something?

It's my understanding that the pause in student loan payments was initiated prior to Biden becoming president, along with the trillions of dollars of stimulus given to small business owners and individuals, as alluded to by the top post in this thread.

[0] https://www.foxbusiness.com/personal-finance/student-loan-re...

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

#154

Post by richiebful1 »

nine_zeros wrote: post #105
guiriduro wrote: post #17

Earlier quoted context omitted.

But it does argue to permit the current tighter fiscal and monetary position to work as it appears to be doing, perhaps too well/quickly, rather than tightening more out of a dangerous over-abundance of caution.

Likewise, it gives the FED a chance to say that they'll only raise rates by 50% next time and maybe only 25% in January. Then they can keep high interest rates for a long time while layoffs continue to cause demand destruction.

FYI, 50 basis points is a 0.5 percentage point increase, not 50%

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

#155

Post by hanoz »

onion2k wrote: post #131
thomastjeffery wrote: post #83

Earlier quoted context omitted.

They effectively said, "The increase went down." It would have been much clearer for them to say, "The increase has slowed."

Or clearer still "The increase is smaller than expected."

That this month's rate is smaller than expected is a completely different thing to it being smaller than last month's rate.

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

#156

Post by FollowingTheDao »

throwingrocks wrote: post #27
fasteddie31003 wrote: post #16

RANT: This inflation and coming recession is entirely on the hands of the current leadership in the Fed and Treasury. Their super-low interest rates over the years are coming full circle. We live in a centrally planned economy. My advice to the Fed is to set the Fed Funds Rate to equal inflation! This will stop the wild swings in the economy and keep inflation in check. When the Fed Funds Rate is lower than inflation…

Yeah....and the inflation we're seeing elsewhere in the world is just a coincidence.

"Elsewhere" they have also had 0% or even negative Central Bank Interest rates.

https://pearsonblog.campaignserver.co.uk/wp-content/uploads/...

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

#157

Post by InTheArena »

PopAlongKid wrote: post #135
InTheArena wrote: post #5

Earlier quoted context omitted.

Probably too strong of a statement. I don't view this as a huge miss (.2%), and ask anyone you know on a fixed income what this is doing to their retirement. Ulitmately, it's the glut of cash out there (IMHO) that is going to need to resolve itself before inflation gets back to a normal level.

>anyone you know on a fixed income what this is doing to their retirement I don't know any retireees on a fixed income. They all get Social Security, which is not fixed. And if they have any signifcant savings, those interest rates are also not fixed, and have been rising a lot recently (recently advertised CD rates at 3-4% are common where I live).

Fixed is too wide of a term, but there are still people like my grandmother, who is in her 90s, as well as my parents, who have seen huge drops in the ability for their savings to pay for their retirement.

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

#158

Post by throw0101a »

fasteddie31003 wrote: post #16

RANT: This inflation and coming recession is entirely on the hands of the current leadership in the Fed and Treasury. Their super-low interest rates over the years are coming full circle. We live in a centrally planned economy. My advice to the Fed is to set the Fed Funds Rate to equal inflation! This will stop the wild swings in the economy and keep inflation in check. When the Fed Funds Rate is lower than inflation…

> Their super-low interest rates over the years are coming full circle.

Super-low interest rates have very little to do with it. The Fed rate has been low for over a decade and inflation has only appeared recently:

* https://fred.stlouisfed.org/series/FEDFUNDS

Similarly neither has QE done much about consumer prices. People predicted the almost end of the financial world when QE started years ago and not much has happened in the intervening years; from 2010:

> We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment.

* https://economics21.org/html/open-letter-ben-bernanke-287.ht...

Neither does money supply: Japan's M2 has been rising for decades and they've had low inflation (and even deflation) in that same period:

* https://fred.stlouisfed.org/graph/?g=PA7P

The current situation is partly due to velocity and the cheques that were sent out by the Treasury (not Fed) earlier in 2022. But also due to supply-side stuff life oil (see RU) and food (see RU). An SF Fed report estimates about half of the current US inflation is on the supply side/chain side of things:

* https://www.frbsf.org/economic-research/publications/economi...

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

#159

Post by ceejayoz »

thehappypm wrote: post #139
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.

People don’t need to make payments, why bother making a payment if its going to get forgiven?

The payment pause on student loans ends in a month and a half (and is a separate program that's been around since the start of the pandemic). The legal battles over the forgiveness program are likely to go far beyond that, and lots of people have loan balances well over the $10k proposed forgiveness.

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

#160

Post by bitshiftfaced »

matwood wrote: post #80
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…

And to add to your explanation, because inflation jumped so quickly and then slowed we'll eventually hit a YoY number that plummets. If milk is $4/gallon today and still $4/gallon 12 mos. from now, that's 0% YoY inflation. This will inevitably lead to people saying the numbers are fake because milk used to be $2/gallon.

Even in the early 80s after huge interest rate hikes, YoY CPI inflation stayed above 2% (until the mid 80s).

Rather than modeling it as "the price increases happened in a short period of time and then went back to normal," I think it's more likely that it happened more spread out and persistently, and perhaps still is going on. It's not going to jump to zero after some given month

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