some_banker_guy

Agreed, nice to see someone talking about recent inflation figures. I think the real issue remains the labour market, it's not clear if companies are labour hoarding still or we are somehow amidst a massive shortage. Anything you do to try to increase supply is counter-productive if you don't have workers to do it..

While this is true, the size of direct fiscal in the US i.e. stimmie checks was enormous. I think the original poster is correct, I encourage anybody in this thread to look into what happened with used cars. At times that accounted for as much as 1.5% of the month on month inflation figures.

A globalised supply chain was disrupted by covid and that exposed some pretty gnarly non-linearities in how pricing happens. Combined with an explosion in shipping prices that actually pre-cluded low inflation areas from exporting their disinflation to high inflation e.g. I've linked elsewhere charts on shipping costs. Have a look at a USDJPY chart and wonder why the US wasn't loading up on cheap Japanese goods..

I know it's upsetting to a lot of people and they don't like it, but if you can charge a higher price and still sell it, it is economically rational to charge that.

PS. Don't roast me, I'm not defending the practice, just the definition of economic rationality.

I think this is slightly misguided, the cost of shipping was what exploded (see link below). It wasn't really a capital destruction as much as logistical issues/spill over from coronavirus.

https://www.freightos.com/freight-resources/coronavirus-upda...

I've seen so much discussion and threads being overly reductive about inflation, essentially the end prices of goods are a function of their inputs and the competition for those goods. It's important to understand that you have many non-linear effects overlapping to create the final goods price. For example, chip shortages meant inspite thousands of physical cars being finished, they couldn't be shipped for lacking a few components. There's nothing more money can do about that. But cars are essential, so the price of used cars exploded in response.

This is just one example of hundreds of different, overlapping issues that coronavirus brought to the supply side picture. At this point in the picture, much of the service side of the economy was physically shut e.g. you couldn't go to bars. Revenge travel, eating out etc. created a crowding out effect and drove prices higher there when they did open.

The billion dollar question is whether or not we continue to see this crowding / revenge effect or in fact people just have more money than you think and are simply spending it. There's mountains of data on both sides of this debate, if you look at consumer credit it seems to be increasing (people can't afford?), but savings rates also remain stubbornly high (but have money?). In spite of price increases, consumer demand remains very high (look at retail sales) and employment makes new record highs and JOLTS continues to be through the roof.

It's not a simple puzzle as many people seem to suggest.

https://ycharts.com/indicators/us_monthly_inflation_rate which is partly why inflation is so much better recently. Services inflation ex OER (i.e. excluding housing which for legacy reasons is extremely slow moving average) remains too high, however.