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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

#211

Post by Zigurd »

flavius29663 wrote: post #149
Zigurd wrote: post #120

Several commenters have provided various reasons year-over-year numbers are, to put it mildly, difficult to interpret. Another reason is that a major war in Europe started within this year, adding to the difficulty of Y0Y comparisons. The principal weapon deployed against the aggressor is economic warfare to collapse Russia's economy. That has only recently made an impact that can't be denied in Russia. Meanwhile, th…

You can't blame US inflation on the Russia war, this is a DNC misdirection. For the US at least, it should be a minor factor. The US were trading very little with Russia to begin with, even before the war. Russia's economy before the war was still smaller than California, New York or Texas. Waging economic warfare on a medium economy like that should not wreak the US, Europe or the World economies.

Commodities are fungible. The US makes lots of oil and food. The companies that make these things sell them to all comers at global prices.

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

#212

Post by danielmarkbruce »

giantg2 wrote: post #191
lottin wrote: post #170

Earlier quoted context omitted.

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.

CPI up 20% month on month in month 1. CPI down 1% month on month for the remaining 11 months. That would result in what they are saying.

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

#213

Post by tomcam »

Jerrrry wrote: post #205
jklinger410 wrote: post #180

Earlier quoted context omitted.

> since the inflation was largely caused by lockdown stimulus This is a widely disproved myth.

Please explain how literally directly increasing the M1 money supply doesn't cause inflation. Everyone got money for free. Things that are free, tend to have less value.

And by “free” we mean “added to the gigantic mountain of debt our children must pay off“

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

#214

Post by meragrin_ »

danielmarkbruce wrote: post #178
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…

This isn't right. It could in fact mean prices are going down. Had we just reported a month on month -0.4% instead of 0.4%, the yoy rate would have been reported as 6.9%. A headline of 6.9% would mean prices are actually going down.

Anything positive YoY means prices have gone up overall over the last year. For prices to have gone down in general over the last year, the YoY would have to be negative. A headline of 6.9% would mean prices have gone up.

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

#215

Post by nonameiguess »

francisofascii wrote: post #124

Anyone know of a publicly available data of grocery prices for staple products month over month? I really wish I would have saved my grocery receipts over the past five years. Rather than rely on my perceptions.

If you buy from Whole Foods and have Amazon Prime, your receipts are in your order history forever. It's actually been informative, because amidst all of the breathlessness from the past two years, every time I have bothered to check, most of the prices I'm paying haven't gone up at all or have gone up a tiny bit. I buy almost all raw ingredients and cook from scratch, which maybe just works differently than processed goods sold by Coca Cola and what not, or Whole Foods was just so overpriced to begin with that they didn't bother raising.

My grocery bills overall have definitely gone up, but that's because I stopped eating out and buy a lot more groceries.

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

#216

Post by Jerrrry »

phpisthebest wrote: post #51
nivenkos wrote: post #26

The US has it easy, since the inflation was largely caused by lockdown stimulus, and also benefits from being the global reserve currency so it can leverage cheap imports as the interest rate rises increase the value of USD. I wouldn't be surprised if it's better in a few months, especially with the growing protectionism in the anti-inflation act, etc. and acts against Chinese competition, etc. keeping more industry…

There was no Anti-Inflation Act, there was a spending... SPENDING bill they claimed would lower inflation because it also included a very limited amount of deficit reduction which 1 week later they had spent like 3 times on new programs including the Student Loan Cancellation which reversed any inflation reduction the original bill could have had (which was nill in the first place)

You are correct the anti-inflation act is hot garbage, and accelerated inflation immediately.

You are incorrect about the exact specifics about the Direct Student Loan program refunds - anyone who had made payments during the pandemic can be refunded.

You are still generally correct though - inflation is caused by several things, M1 and M2 money supply, employment, demand, supply, and sentiment.

Everyone not paying their loans decreased demand for jobs, as that was the primary motivator for many to work. Additionally, the money printed and disbursed to colleges not being paid back leads to another increase in money supply, since the money never gets repaid, and a few select loan companies are now holding very large U-O-ME's, which the department of education seemingly is going to average between all of us, by forgiving it, further adding to the printed money pile.

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

#217

Post by randomdata »

jklinger410 wrote: post #180
nivenkos wrote: post #26

The US has it easy, since the inflation was largely caused by lockdown stimulus, and also benefits from being the global reserve currency so it can leverage cheap imports as the interest rate rises increase the value of USD. I wouldn't be surprised if it's better in a few months, especially with the growing protectionism in the anti-inflation act, etc. and acts against Chinese competition, etc. keeping more industry…

> since the inflation was largely caused by lockdown stimulus This is a widely disproved myth.

The first order reason for inflation is, of course, a willingness to spend more. Prices flat out can't rise if buyers balk at a seller's higher expectations. Plain and simple.

But it is well understood that said willingness changes on what buyers believe[1]. If they believe that lockdown stimulus is causing inflation, it will cause inflation. The mere existence of lockdown stimulus won't cause inflation, but the emotional response to it very well could.

And given that this appears to be a widely held belief, something even some government officials trumpet as the cause of inflation, it seems unlikely that it isn't a significant contributing factor. How is this dispelled?

[1] https://www.brookings.edu/blog/up-front/2020/11/30/what-are-...

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

#219

Post by JumpCrisscross »

throw0101a wrote: post #118
matwood wrote: post #80

Earlier quoted context omitted.

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.

> If milk is $4/gallon today and still $4/gallon 12 mos. from now, that's 0% YoY inflation. Conversely, if there was a one-time jump in a particular item, it will take a year before it gets 'removed' from the inflation numbers. Extremely contrived example: if gas/petrol was $1/L in December 2021 (and generally in all of 2021), but $1.20/L in January 2022, then there will be a 20% YoY jump in inflation for the January…

Which is partly what we’re seeing. CPI rose 0.4% MoM in October, or 4.8% seasonally adjusted. That’s above target, but better than YoY.

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

#220

Post by danielmarkbruce »

meragrin_ wrote: post #214
danielmarkbruce wrote: post #178

Earlier quoted context omitted.

This isn't right. It could in fact mean prices are going down. Had we just reported a month on month -0.4% instead of 0.4%, the yoy rate would have been reported as 6.9%. A headline of 6.9% would mean prices are actually going down.

Anything positive YoY means prices have gone up overall over the last year. For prices to have gone down in general over the last year, the YoY would have to be negative. A headline of 6.9% would mean prices have gone up.

The slope of price v time would be going down if they'd posted 6.9% yoy.

The discussion is around how the numbers should be interpreted. There isn't confusion around what they have literally reported.

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