Food price hikes are no longer outpacing overall inflation
cnn.com
cnn.com
It reads like some businesses had to increase wages to retain employees but this doesn't seem to be causative as these employees were asking for higher wages because of the increased cost of living, not the other way around.
Note: most of those long-haulers have recovered, but I suspect that a great many of those didn’t recover back to their original job. That means during the time they were disabled, they had to be replaced, possibly at a higher wage.
https://www.marketplace.org/2022/01/24/how-much-labor-force-...
> The raw death count gives us a sense of scale: for example, the US suffered roughly 470,000 excess deaths in 2020, compared to 352,000 confirmed COVID-19 deaths during that year.
https://covid.cdc.gov/covid-data-tracker/#datatracker-home
Total Deaths 1,159,864
That roughly tracks.
This statement is at such odds from reality it actually makes me curious. You are off by a factor of 20x. Do you think that you are knowledgeable about the events of the pandemic? How did you get your news about it?
Its made all the more puzzling by the fact that your own source has the correct figures.
There are a lot of other factors that are driving prices.
I don't really have a strong opinion on the veracity, but I think the guy being interviewed is trying to provide an explanation for why restaurants specifically have 4x more MoM inflation than groceries. I don't think he's making an overall claim about the cause of recent inflation.
As far as the relationship between increased labor costs and low unemployment, lower unemployment gives workers more opportunities to vote with their feet and gives unionized workers more bargaining power.
This is backwards. No business increases wages because employees ask for it. Employees always ask for higher wages. Wages go up when you can't find workers for lower wages.
It's best not to conflate actual measures being tentatively interpreted on the basis of a century of history with some guy with a camera and a YouTube channel. They're not even the same category of thing, as pondering that for a moment will show.
The commenter upthread "penciled in" a recession for Q3 of next year and cited your favorite metric. I think that's closer to a TikTok hit than a "tentatively interpreted" bit of pop economics.
But to treat with your actual point: it still sounds like bunk to me. I had to dig, but FRED does indeed have a chart for this (https://fred.stlouisfed.org/series/T10Y2Y) and sure, if you squint, it looks like it predicts. Except that the time between an inversion and the predicted recession is all over the map. It looks like the 1988 recession took two years (!) to actually arrive, while the 1980 recession jumped the gun. And 2008 seems to refute the theory, because the inversion had corrected itself almost a year before the financial crisis (which pretty clearly had nothing to do with bond rates anyway). Also the magnitude of the inversion doesn't seem to have any correlation with the recession, the inversion swung way lower in the late 70's than it did any other time, but that recession was actually pretty mild. And the inversion of 2006 was barely an inversion at all.
Yeah, this is wrong. No serious economics seem to be pushing this.
We have an inversion right now because the Fed has been swinging its hammer like crazy and the market is responding to the fact that they think rates are going to drop rapidly RSN (which is a higher risk for longer term bonds, obviously). That explanation makes a ton more sense than some handwaving about a "predictive metric".
No it didn't, it inverted in 1978. 1-2 years after the inversion starts is pretty consistent.
And yes, it is actually used as an indicator: https://fortune.com/recommends/investing/the-inverted-yield-...
After three years of constant inflation and shrinkflation on the majority of products you buy?
- a family size of cookies used to be 17.2oz, its now 14.6oz for the same price
- laundry detergent scent enhancer - 13oz to 10oz and increased in price
- a pack of frozen burritos went from 20 items to 18 for the same price
- baby wipes in a smaller sized package and they increased in price
- OJ went from a half gallon (64oz) to under a half gallon (59oz) for the same price
- many milk manufacturers have trimmed down their half gallon to slightly under a half gallon while keeping the price the same.
- snack crackers like wheat thins went from a pound for a family sized box to 14oz
Color me skeptical. I've seen this movie before it always ends in a painful recession.
Regardless, I agree with your sentiment that inflation is still above the 2% target and may prove to be sticky as incomes need to rise to meet the inflation we saw over the past 3 years. My prediction is that we'll be at 5% rates plus quantitative tightening for at least another full year. If they start doing rate cuts, I think we'll start going above 3% inflation and then the Fed has the tough job of taking the fruit punch bowl away from a market which thinks the party is just getting started. Going into an election year, that becomes politically difficult regardless of what they do.
CPI also adjutsta for quality and performance - if iPad 2 is twice better than iPad 1, but costs the same, CPI will show -50%.
If asbestos was banned in buildings, CPI for construction could be negative even if prices increase.
Not the best link, but you can find more on this easilly: https://www.cultofmac.com/85778/federal-reserve-president-cr...
I do agree that a soft landing is still a recession. But the more people that realize that, the less soft the landing might be.
I think Dodd-Frank addressed this, but maybe it was some legislation after. I think they made ACH details transferrable and padded payment windows iirc.
> But the more people that realize that, the less soft the landing might be.
Yeah, definitely, but that's why they crank the interest rate through the ceiling. People that are cash heavy could come up quite a bit if left uninhibited. Of course, they can still do that, but not in a property acquisition kind of way.
Can you clarify?
If you have a ton of cash on hand when markets go to shit and interest rates go through the roof you suddenly have something no one else does: cash on hand that was traded when that dollar was worth less. When you buy property or stock with that money, you've effectively bought it at a hefty discount. When the markets and interest rates normalize again you stand to make huge gains.
They lock up financing to put a cap on growing inflation, but that same cap stops people from taking advantage of the market and thereby continuing inflation through a new avenue.
BUT the opposing force is the inflation that originally justified the spike in interest rates. That cash they are holding is simultaneously worth less due to the devaluing of the dollar, but also enables you to operate when others have run dry.
EDIT: so I guess there is a distinction in the value of the dollar when you are using it to buy large things that require debt vs the day to day little items. Because the little items will get inflated easily as everyone allocates their limited capital to food and fuel. But the real estate market will stagnate as no one can trade houses around in this environment.
It was like a 14 month burst, and it's been over since last summer. Here's the chart: https://www.bls.gov/charts/consumer-price-index/consumer-pri...
And yes, it includes changes in package size.
I genuinely don't understand the doomslinging impulse on this. It's like people actually want inflation to be worse than it actually was, as if it makes them Right on the Internet or something. But it's wrong. You're wrong.
Who's achievement? This was a supply chain shock caused by COVID and war in Ukraine, then piggybacked by corporate collusion / greedflation.
Taising of interest rates achieved nothing, possibly made it worse by decreasing money supply avaliable to address supply chain bottlenecks. There is a good nimber of economists that support this viewpoint:
https://www.cnbc.com/2022/09/02/joseph-stiglitz-thinks-furth...
We are entering an era where economic dogma is anti-physical - when there is a shortage of energy our governments hike interest rates instead of adressing root of the problem, like building power plants or improving efficiency.
The best charts I could find on this are from an admittedly-biased think tank, but the sources it's pulling from are well-regarded and neutral:
https://www.americanprogress.org/article/7-reasons-the-u-s-e...
The US also recently passed a massive investment in building out renewable energy.
In terms of specific government actions, that's upzoning all residential areas and approving plans by default with chance for challenges if they fit within established (reasonable) requirements.