4 ms·

US Core Inflation Jumps by Most Since 1991

24 points by jules-jules 6y ago

rjknight 6y ago
Year-on-year inflation is still below the inflation target!
lvs 6y ago
Clickbait. The month-over-month rate of change "jumped," but that's just recovery of deflation in the prior three months. The overall inflation rate remains well below what it was for all of 2019.
bryanrasmussen 6y ago
Shouldn't inflation decrease during a recession?
- ianai 6y ago
  Totally depends on how much the Fed prints money. They’re literally buying stocks last I heard.
  - est31 6y ago
    And quite expectably, stock prices inflate at larger rates than the prices of other goods. Stats show that people save more cash than they did before corona. Very reasonable decision as times are more dangerous but it will be a major catastrophy when all of that money gets back into the economy.
    - cma 6y ago
      I don't think core inflation/CPI counts stock inflation.
    - bildung 6y ago
      > And quite expectably, stock prices inflate at larger rates than the prices of other goods. Actually stock prices grow slower than in 1981-89 and 1991-2000 (though a bit faster than 2001-07): https://www.macrotrends.net/2324/sp-500-historical-chart-data https://www.macrotrends.net/2324/sp-500-historical-chart-dat... Edit: Stocks appreciated faster than consumer prices inflated, over pretty much the whole period.
    - ianai 6y ago
      I’m not really that concerned about inflation from people moving money from their savings to expenditures in the future. For one, deflation is way worse than inflation. For two, inflation isn’t as bad as widely assumed. If anything we’re seeing in real time how awful completely stable ie 0 rates can be on society as it’s pushed people into investments purely because There Is No Alternative (TINA). The oddball hoarding is pretty scary-though seems to have been confined to the short term across all the things people hoarded. Back to savings, people increasing their savings is a rational choice right now. For all they know they may need that to survive in the future. Those savings will probably sit on the sidelines until we reach herd immunity. Being that could be a year away and lots of time without meaningful work the savings are likely to be spent at non-inflationary rates. It’s much more likely people need further stimulus to avoid huge booms in homeless populations through rent and mortgage shortcomings.
  - lvs 6y ago
    No it does not totally depend on that. The inflation of stock valuations does, arguably, totally depend on loose monetary policy. But this is the consumer price index. That depends on demand, and demand remains low.
    - ianai 6y ago
      We are in seriously weird times. I take your point and know you’re rooted in basic economics as correct. But I also know Fed policy is pushing RE prices through the roof and the stock market has had high volatility due in part to Fed policy. The stock market seems to have some tie to how well people think things are going which may be reflected in consumer confidence thus demand. But yeah not the direct point I wrote above.
- meragrin 6y ago
  This "recession" was due to government shutting down the economy and not economic reasons. When things are allowed to operate "normally" again, there is bound to be a bounce back. It also probably took a bit of time for the trillions in stimulus to have an effect. The indication of trillions more in stimulus coming probably doesn't hurt either.
- soVeryTired 6y ago
  The chart shows a modes uptick which follows a large drop. But neither the drop or the uptick take inflation to a level that’s unusual unusual compared to its recent history. Wake me up if it continues for another six months!
  - ianai 6y ago
    I agree this inflation story isn’t the story we should focus on. We should be doing everything to get our numbers under 1 new case per 100k people per day. We’re still having a 9/11 event every three days by death count.
    - CyberRabbi 6y ago
      Saying we have a “9/11 event every three days” is an excessively emotional and alarmist way to frame what’s happening. 600K people die in the US of cancer every year. If we took your framing, that means cancer is causing a 9/11 every other day. (Edit: did incorrect math here originally) Please try to use emotionally neutral language when communicating to others about the pandemic. It has already been distorted and politicized in the public sphere enough, in both directions.
      - lvs 6y ago
        In both cases, these are excess deaths that would not have otherwise occurred. That is not true of cancer. Your choice to downplay the comparison is as consciously political as GP's choice to point out the comparison.
        CyberRabbi 6y ago
        I downplayed nothing. You have further proved my point.
      - darkerside 6y ago
        Cancer _is_ causing 200 9/11s every day, and people are freaked out by it. That's why we spend billions on cancer research every year. And if we could prevent cancer by simple changes to our lifestyle by wearing masks and social distancing, you can bet that most people (not all) would support it and look at people who don't with disgust. I disagree with your trivialization of these deaths. I unironically presume that you have little empathy for individual deaths due to gun violence, accidents, and other tragedies, since those are even smaller in scope than the enormous number of people who die of cancer on a regular basis. Edit: I also fell into the trap of not questioning your assumptions. 600k a year is 1,643 per day. So a 9/11 every two days. Closer to COVID in numbers than you presented. Still horrible. I stand by the rest of my post.
- the-dude 6y ago
  The are finally doing the helicopter money. Some have a better income from not working than they had when they were working. https://en.wikipedia.org/wiki/Helicopter_money https://en.wikipedia.org/wiki/Helicopter_money
  - bryanrasmussen 6y ago
    Ben Bernanke: As God is my witness, I thought helicopter money would fly.
- RobertoG 6y ago
  If a crisis create supply problems, for instance, disrupting supply chains, inflation could increase. Inflation is too much spending (not "printing") for too little capacity in the economy. You could get inflation for spending more than the economy can accept (but in normal times modern economies are rarely at full utilization), or, assuming full utilization, by keeping the same spending when what the economy can produce decrease for some reason. In fact, despise what many people says, the second way is far more common that the first, including Zimbabwe (1). (1) - http://bilbo.economicoutlook.net/blog/?p=3773 http://bilbo.economicoutlook.net/blog/?p=3773
defertoreptar 6y ago
Looks like it had a recent jump, but is still below the trend line. https://fred.stlouisfed.org/series/CPILFESL https://fred.stlouisfed.org/series/CPILFESL (You can zoom in on the recent year by using the slider at the bottom.)

24 points by jules-jules 6y ago

Year-on-year inflation is still below the inflation target!

lvs 6y ago

Clickbait. The month-over-month rate of change "jumped," but that's just recovery of deflation in the prior three months. The overall inflation rate remains well below what it was for all of 2019.

bryanrasmussen 6y ago

Shouldn't inflation decrease during a recession?

ianai 6y ago
Totally depends on how much the Fed prints money. They’re literally buying stocks last I heard.
- est31 6y ago
  And quite expectably, stock prices inflate at larger rates than the prices of other goods. Stats show that people save more cash than they did before corona. Very reasonable decision as times are more dangerous but it will be a major catastrophy when all of that money gets back into the economy.
  - cma 6y ago
    I don't think core inflation/CPI counts stock inflation.
  - bildung 6y ago
    > And quite expectably, stock prices inflate at larger rates than the prices of other goods. Actually stock prices grow slower than in 1981-89 and 1991-2000 (though a bit faster than 2001-07): https://www.macrotrends.net/2324/sp-500-historical-chart-data https://www.macrotrends.net/2324/sp-500-historical-chart-dat... Edit: Stocks appreciated faster than consumer prices inflated, over pretty much the whole period.
  - ianai 6y ago
    I’m not really that concerned about inflation from people moving money from their savings to expenditures in the future. For one, deflation is way worse than inflation. For two, inflation isn’t as bad as widely assumed. If anything we’re seeing in real time how awful completely stable ie 0 rates can be on society as it’s pushed people into investments purely because There Is No Alternative (TINA). The oddball hoarding is pretty scary-though seems to have been confined to the short term across all the things people hoarded. Back to savings, people increasing their savings is a rational choice right now. For all they know they may need that to survive in the future. Those savings will probably sit on the sidelines until we reach herd immunity. Being that could be a year away and lots of time without meaningful work the savings are likely to be spent at non-inflationary rates. It’s much more likely people need further stimulus to avoid huge booms in homeless populations through rent and mortgage shortcomings.
- lvs 6y ago
  No it does not totally depend on that. The inflation of stock valuations does, arguably, totally depend on loose monetary policy. But this is the consumer price index. That depends on demand, and demand remains low.
  - ianai 6y ago
    We are in seriously weird times. I take your point and know you’re rooted in basic economics as correct. But I also know Fed policy is pushing RE prices through the roof and the stock market has had high volatility due in part to Fed policy. The stock market seems to have some tie to how well people think things are going which may be reflected in consumer confidence thus demand. But yeah not the direct point I wrote above.
meragrin 6y ago
This "recession" was due to government shutting down the economy and not economic reasons. When things are allowed to operate "normally" again, there is bound to be a bounce back. It also probably took a bit of time for the trillions in stimulus to have an effect. The indication of trillions more in stimulus coming probably doesn't hurt either.
soVeryTired 6y ago
The chart shows a modes uptick which follows a large drop. But neither the drop or the uptick take inflation to a level that’s unusual unusual compared to its recent history. Wake me up if it continues for another six months!
- ianai 6y ago
  I agree this inflation story isn’t the story we should focus on. We should be doing everything to get our numbers under 1 new case per 100k people per day. We’re still having a 9/11 event every three days by death count.
  - CyberRabbi 6y ago
    Saying we have a “9/11 event every three days” is an excessively emotional and alarmist way to frame what’s happening. 600K people die in the US of cancer every year. If we took your framing, that means cancer is causing a 9/11 every other day. (Edit: did incorrect math here originally) Please try to use emotionally neutral language when communicating to others about the pandemic. It has already been distorted and politicized in the public sphere enough, in both directions.
    - lvs 6y ago
      In both cases, these are excess deaths that would not have otherwise occurred. That is not true of cancer. Your choice to downplay the comparison is as consciously political as GP's choice to point out the comparison.
      - CyberRabbi 6y ago
        I downplayed nothing. You have further proved my point.
    - darkerside 6y ago
      Cancer _is_ causing 200 9/11s every day, and people are freaked out by it. That's why we spend billions on cancer research every year. And if we could prevent cancer by simple changes to our lifestyle by wearing masks and social distancing, you can bet that most people (not all) would support it and look at people who don't with disgust. I disagree with your trivialization of these deaths. I unironically presume that you have little empathy for individual deaths due to gun violence, accidents, and other tragedies, since those are even smaller in scope than the enormous number of people who die of cancer on a regular basis. Edit: I also fell into the trap of not questioning your assumptions. 600k a year is 1,643 per day. So a 9/11 every two days. Closer to COVID in numbers than you presented. Still horrible. I stand by the rest of my post.
the-dude 6y ago
The are finally doing the helicopter money. Some have a better income from not working than they had when they were working. https://en.wikipedia.org/wiki/Helicopter_money https://en.wikipedia.org/wiki/Helicopter_money
- bryanrasmussen 6y ago
  Ben Bernanke: As God is my witness, I thought helicopter money would fly.
RobertoG 6y ago
If a crisis create supply problems, for instance, disrupting supply chains, inflation could increase. Inflation is too much spending (not "printing") for too little capacity in the economy. You could get inflation for spending more than the economy can accept (but in normal times modern economies are rarely at full utilization), or, assuming full utilization, by keeping the same spending when what the economy can produce decrease for some reason. In fact, despise what many people says, the second way is far more common that the first, including Zimbabwe (1). (1) - http://bilbo.economicoutlook.net/blog/?p=3773 http://bilbo.economicoutlook.net/blog/?p=3773

defertoreptar 6y ago

Looks like it had a recent jump, but is still below the trend line. https://fred.stlouisfed.org/series/CPILFESL https://fred.stlouisfed.org/series/CPILFESL (You can zoom in on the recent year by using the slider at the bottom.)