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I think the article's own title is incorrect? > Headline CPI in March rose by 8.5% *from a year ago* Another notable piece: > core inflation appeared to be e
by kirbyfan64sos 5y ago
I think the article's own title is incorrect?
> Headline CPI in March rose by 8.5% *from a year ago*
Another notable piece:
> core inflation appeared to be ebbing, rising 0.3% for the month, less than the 0.5% estimate
which matches the other commenter mentioning that the gas prices were a massive contributor to this.
- throwaway4good 5y agoCore inflation is 6.5% yoy which is very high. The other figures are month to month and are noisy and have a seasonal component.
- throwaway4good 5y agoThe core inflation tells you that this is more than a fluke in energy prices. I would say it is due to loose monetary and fiscal policies (duh). Maybe we are in for a 70es rerun; and the 70es inflation spiral didn't really end until Paul Volker, Thatcher, and Reagan changed the economic policies. Also stopping the inflation spiral helped bankrupt the Soviets who were a great benifitter of the rising commodity prices ... just a hint.
- bubbleRefuge 5y agoThe hypothesis that Volker killed inflation has been discredited. Inflation in the 80's, like today, was supply side from reliance on oil for energy. When natural gas replaced oil for energy production in the US, inflation came down.
- onlyrealcuzzo 5y ago> The hypothesis that Volker killed inflation has been discredited. Highly subjective.
- bubbleRefuge 5y agoIt may have even caused more inflation as 20% on treasuries adds lots of interest income to the economy on the demand side.
- jbay808 5y agoAh yes -- the Erdogan school of economics.
- bubbleRefuge 5y agoAll econ is fairly subjective. Hence the "dismal" science label. search for "Volker" http://bilbo.economicoutlook.net/blog/?p=7591 http://bilbo.economicoutlook.net/blog/?p=7591
- nostrademons 5y agoAnd folks like you are why we are going to get more inflation...
- mgfist 5y agoSupply shocks (from covid + ukraine war) are a much bigger reason.
- iso1210 5y agoYes majority of the inflation is caused by a lack of supply due to covid (lots of things shut down, from microchip manufacturers to international shipping to lumber mills to refineries and produciton hasn't ramped up), and of course crude oil prices increasing. If you don't think this has any affect on inflation Ive got a bridge to sell you.
- matwood 5y agoI agree. What the fed missed here when they originally said transitory was just how long it would take the supply chain to recover. Places in China are still doing zero-covid style lockdowns causing further shocks to supply around the globe. Throw in a war that drove energy prices up, and you have quite a number of existential factors that could quickly go in the other direction.
- kdkfk 5y ago[dead]
- lmeyerov 5y agoYou'd think that, but data-driven economists were finding low correlations for this kind of (rational) thing specifically for the modern US dollar, which is confusing. Super great PlanetMoney/freakonomics episode on inflation ~last year. If I remember right, this broken state goes back to at least the Obama years, maybe closer to Clinton. It's a weird state to be in. The rational thing becomes to continue (leverage) the weird situation -- the market expects continued regular high spend for whatever regular big thing of the month/year -- and the irresponsible thing becomes any deviations that risk rocking the boat (ex: risk EU style rallying on austerity becoming a self-fulling prophecy). A lot on inflation concern is triggering FUD loops (sporadic supply chain hits vs YoY spirals), so when we know the market treats USD differently to beginwith, accepting the FUD (by policies that assumes the USD is a weaker currency) is kind of the worst thing policy makers can do. Likewise, most non-US countries rely on USD stability, so probably same thing for their policy makers. I'd hate to be the one making these calls.
- kzrdude 5y agoCovid measures left a whole lot of people working from home, inefficiently, or inefficiently working on location (less customers, higher costs). The efficiency loss is also being paid for partially by rising prices, inflation. Same salary, less work output for it.
- jimbob45 5y ago> Covid measures left a whole lot of people working from home, inefficiently. Can you explain what you mean by that? I think many of us would argue that we’re more efficient now in WfH situations.
- kzrdude 5y agoWe'd need a wide survey. Whatever the HN crowd in aggregate thinks, it's not representative of the whole population who had to work at home, splitting their attention between homeschooling kids and other distractions and work.
- jimbob45 5y agoI’ve yet to meet anyone who wasn’t more productive after switching to WfH, HN or otherwise. That seems to be the case for my colleagues as well. If you have some data or experiences that show otherwise, feel free to share them.
- kzrdude 5y agoLots of people want it to be true. I feel for those who can't admit how far they've fallen behind due to social disconnection or not being able to trade ideas with colleagues. I wish there were more solid studies done. Many use self-estimated productivity. Some seem to simply be pro-remote work, i.e have that as an agenda. That's fine as an interest of course but doesn't answer the question in terms of forcing everyone, for those it's not a good fit. My workplace is post-remote now. We're back to fulltime in the office. I'm super happy for all the random interaction, problem solving together and coffee breaks. The social interaction enables us to work better in the team. The best policy was not the topic of the comment but it's probably to let those who want and like remote work to do it.
- lghh 5y agoWasn't Volker nominated by Carter? And based on the premise that Volker would be doing what Volker did? Does Reagan deserve the praise there? Only mentioning because the Volker nomination was such a good move that I want to make sure the right person gets credit.
- jjoonathan 5y agoYes. Carter got the blame for chemotherapy, Reagan got credit for the recovery. This time around, who wants to be Carter? Somehow I suspect we will be short of volunteers. Neoliberal propaganda shot itself in the foot. Oops.
- jimbokun 5y agoI feel like Biden has been surprisingly willing to do "the right thing" in spite of political fallout. Like leaving Afghanistan, even though it led to the Taliban regaining control.
- ThunderSizzle 5y agoBiden delaying and screwing up Trump's plan to pull out of Afghanistan that was already in progress and getting Americans killed, leaving millions/billions of dollars of equipment, and sacrificing people who helped our soldiers to the Taliban is "the right thing"?
- jimbokun 5y agoTrump never pulled out of Afghanistan, just talked about doing it and "made plans" that he handed to his successor to execute. Just like Obama, really. Biden actually did it, and paid the political price. There was never going to be any way to withdraw without horrific consequences. Which is why neither Obama or Trump actually did it.
- throwaway4good 5y agoYeah. Volker was brought in by Carter. And Reagan got all the credit - supposedly he tricked the Russians into thinking the Star Wars program actually worked and that was why they went bankrupt. Things have obviously changed - but the basics are still there: inflation comes from monetary and fiscal expansion - once the spiral picks up - commodities lead the way - and that’s the Russians.
- memish 5y agoVolcker raised rates to almost 20% to break inflation in the 70s. But that's when debt was low and we were able to service it. Now that debt is high, how much can the Fed actually increase rates? Are they out of options?
- deleted 5y ago[deleted]
- onlyrealcuzzo 5y agoWho says they'll need to raise rates to 20% to stop inflation? I think everyone agrees they can't raise rates to 20% without causing catastrophic side effects. I think everyone also agrees they don't need to raise rates that high.
- throwaway4good 5y ago5% would probably do.
- TradingPlaces 5y agoSeasonally adjusted data are adjusted.
- gruez 5y agoYeah but characterizing a rise of 8.5% that happened over a year, as happening in one month is misleading.
- mc32 5y agoThe administration’s own people are owning up to inflation although conveniently attributing all of it to Putin. It’s an amazing turnaround from the unisonic voice of “it’s transitory”, ‘printer go brrrrrrt’ is a conspiracy, don’t you worry…
- stjohnswarts 5y agoYeah I'll concede this. Job numbers are often similar. They jump a lot month to month. Unless there is some crazy spike that you just can't ignore, it's better to use a trendline.
- iambateman 5y agoWhile it’s confusing, it’s the industry standard to express inflation percentages on an annual basis.
- vernie 5y agoAlso bigger number means more clicks.
- mFixman 5y agoThat's how you know you are talking about a first-world country. My dear home country had an official (likely underreported) inflation rate of 5.5% in March alone.
- tommiegannert 5y agoNah, this headline is just wrong. The standard way to formulate YoY changes is what GP said, or "Consumer prices rose 8.5% in the year ending in March". The MoM change for March is a hefty 1.2% in its own right.
- parkingrift 5y agoThis headline may be "wrong" in your eyes but this is the way that inflation is universally reported. Even finance centric news sites such as Bloomberg or WSJ report inflation in this way. It is universally understood to mean year ending.
- stickfigure 5y agoGiven the amount of confusion here, it's not universal. HN can do better than Bloomberg or WSJ. Clarity matters, mods should change the title.
- parkingrift 5y agoThe only thing I see here is people making petty semantics arguments. No one seems confused as to what we're actually discussing.
- ren_engineer 5y ago"if you don't include food, energy, housing, or healthcare prices, inflation isn't that bad!"
- JumpCrisscross 5y ago> don't include food, energy, housing, or healthcare prices Straw man. Core inflation includes housing and healthcare. If one can’t understand why food and energy inflation aren’t cleanly a monetary phenomenon in the midst of Russia, an energy exporter, invading Ukraine, a food exporter, I’m not sure how to help.
- abnry 5y agoInflation was occuring before the Ukraine invasion.
- JumpCrisscross 5y ago> inflation was occuring before the Ukraine invasion A hypothesis perfectly corroborated by core PCE, the metric OP criticised [1]. [1] https://news.ycombinator.com/item?id=31003409 https://news.ycombinator.com/item?id=31003409
- lalaland1125 5y agoCorrect, but the Ukraine invasion caused a distinct spike. You can see this in how March is an outlier in the data (37% of the energy commodity inflation for the entire year in a single month)
- spoonjim 5y agoWhy does it matter to actual people what the cause is? If you’re poor and gas costs $7 you’re fucked, regardless of whose fault it is.
- dragonwriter 5y ago> Why does it matter to actual people what the cause is? Because we live in a representative democracy and policy responses are likely to be a significant electoral issue.
- Mikeb85 5y ago> I think the article's own title is incorrect? >> Headline CPI in March rose by 8.5% from a year ago How do you figure? YoY is the best way to measure these things since there's seasonal changes that happen month to month.
- BaseballPhysics 5y agoTBH, I'm pretty surprised that core inflation seems to have not grown as much as expected. That's actually very good news, given that core inflation is lifted by fuel prices (since increased fuel prices influence prices across the economy). This... seems like a good news story? Obviously the Russian invasion of Ukraine has royally messed up fuel and food prices, but that's a specific shock that's independent of larger macroeconomic issues.
- anecd0te 5y agoInflation is typically reported year over year
- colinmhayes 5y agoExactly, the headline implies that prices rose 8.5% this month, not since last year.
- butlerm 5y agoSome news outlets falsify their inflation reporting as a matter of course. Consumer prices obviously did not rise 8.5% in March, they rose 8.5% over the preceding twelve months ending in March. https://www.bls.gov/news.release/cpi.nr0.htm https://www.bls.gov/news.release/cpi.nr0.htm