4 ms·

So far so good. Inflation is slowing down.

scrlk 4y ago
I don't think we are out of the woods yet. China reopening could put upwards pressure on energy markets that are already supply constrained.
jerf 4y ago
Albeit only to the extent where it could be holding even or even slightly growing, but the noise in the data happened to be high before and lower now. If you look back over other periods of inflation growth, they have periods like this in them; nothing goes straight up or straight down. I'd be much less likely to say something like this if it was down by 1 or 2% or something. However, it is also compatible with the Fed slowly getting it under control, and slowly under control is better in a lot of ways that quickly getting it under control. Basically, the numbers we have now don't mean a lot, except that extreme things aren't happening.
- draw_down 4y ago
codeslave13 4y ago
Energy is still very fickle. Locally ive had 30-40 cent price swing both ways over 7-8 days. Diesel is still in the shitter. We simply cant produce more. And all it will take this winter is some good storms and i think energy will crank back up. Nit just energy though (thats where most of the drop has come from) most supply chains are still barely functional. Its just all still a giant mess
- toomuchtodo 4y ago
  Fed can’t print refining capacity or EVs unfortunately. Demand destruction is a blunt force tool. Tangentially, "Green Banks" are popping up from the inflation reduction act, which will improve the targeting of economic policy in this regard (cheaper money for clean energy, storage, energy efficiency, electric mobility). https://reasonstobecheerful.world/green-banks-are-turning-climate-action-dreams-into-realities/ https://reasonstobecheerful.world/green-banks-are-turning-cl... https://www.epa.gov/inflation-reduction-act/greenhouse-gas-reduction-fund https://www.epa.gov/inflation-reduction-act/greenhouse-gas-r...
- Analemma_ 4y ago
  The Fed generally reacts to core (i.e. without energy and food) inflation. You really can't count on monetary policy to help you with energy costs; buy an EV and/or a heat pump.
- themitigating 4y ago
  The amount of diesel used for entertainment in the US is shocking considering how vital it is to the economy.
  - SV_BubbleTime 4y ago
    >diesel used for entertainment As in?
    - gedy 4y ago
      Maybe Vin?
    - vondur 4y ago
      Im guessing large bands on tour with tour busses and trucks for the equipment? Look at how large of a show the recent Rammstein concerts were.
    - thwayunion 4y ago
      Presumably non-commercial vehicles and non-commercial boats; the quantity used may be large but as a percentage of commercial, industrial, and heating it's fairly small.
    - accrual 4y ago
      All I can think of is the semi trucks carrying not just entertainment, but all manner of physical products needed by almost every industry.
    - deleted 4y ago
      [deleted]
time_to_smile 4y ago
When you look at the various lens of CPI over time for this chart [0] it's not completely obvious to me that we're in a long term downward trend for inflation. We've definitely seen some important dips in inflation the last two months, and I think the fed is correct in not being too aggressive. At the same time it's really hard to predict the next point in any of those lines. Additionally all of those "lower" inflation values are still above anything (outside of energy) we've seen in 20 years. Not to mention that inflation this November, while lower than this October, is still higher than last November. 0. https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm https://www.bls.gov/charts/consumer-price-index/consumer-pri...
- tiahura 4y ago
  What do you mean by long term?1 year or 10? If you watch CNBC most CEOs are saying that the price pressures have been abating over the last quarter or so. The take away is that we’ve peaked. Getting down to 2% is going to take time and pain.
  - no_wizard 4y ago
    Are these cash rich businesses that the CEOs are head of that will benefit from the inflation curbing measures though? Lots of cash on hand while the value of the currency goes up means you can buy overseas material far cheaper than before. I don't think its going to be "even" on price pressure though. Businesses that routinely borrow money - which are alot actually, and not just in speculative ways - are of course going to be hurt. The most obvious is real estate / mortgage / construction industries . However the restaurant, automotive, and light manufacturing[0] industries (to name a few) are also going to be negatively impacted. [0]: https://en.wikipedia.org/wiki/Light_industry https://en.wikipedia.org/wiki/Light_industry
ClarityJones 4y ago
Inflation is an increase in the general price of goods and services in an economy. Ask yourself what is currently driving price increases? In my estimation it's the Fed's own rate hikes. The price of mortgages is going up. The price of car loans is high. The production of consumer goods relies on leverage and the increased finance expenses are pushing up the price of milk, gas, clothes, etc. Of course the rate of inflation is slowing, the Fed is slowing their hikes from the previously imposed a .75 raise to the present .5 hike.
- georgeecollins 4y ago
  >> Ask yourself what is currently driving price increases? It's good to remind people that the reason for inflation up to this point is probably: - The US government spending a huge deficit during covid. - The war in Ukraine causing shortages / high prices for grain but most importantly oil and gas. - Covid lockdowns in China creating shortages. I understand that inflation sucks, particularly for people where gas or food is a big part of their spending. But I am also amazed at how our economy seems to be enduring a world wide pandemic and major war. There are many times in history when shocks like this caused much worse problems. As an American I am proud of how resilient our institutions are. But I could be counting my chickens before they hatch.
- JamesBarney 4y ago
  Mortgage rates and interest rates on car loans aren't factored into the CPI.
paulpauper 4y ago
We're going to need a year of price stability before confidence comes back. It probably will not take much to get prices going up again.
- alphabettsy 4y ago
  How much of confidence is tied to inflation and how much is tied to talk of inflation?
bitshiftfaced 4y ago
Nah, it's been teeter tottering around 6% for the last 12 months. Maybe it'll continue to trend down, but we could've said that in April based on the same belief, and we would've been wrong. Disregarding the last year, we haven't seen our current level of inflation for forty years. We are by no means out of the woods yet. The balance sheet is trending down, but we're only where we were a year ago, so still up ~5 trillion from pre-covid levels.
- mywittyname 4y ago
  But if you look at the past 3 months, it's sub-3.0% annualized. Overall CPI-U was 0.4%, 0.4%, and 0.1% for the past three months, with some sectors seeing price declines.
hajile 4y ago
Remember, we've now inflated 30+% (wholesale goods) since April 2020 and even if it stabilized 100% right now, the results of that inflation are going to haunt the system for a long time.
- mywittyname 4y ago
  We also just exited a decade of extraordinarily low inflation. Cumulative inflation over the past decade for the CPI-U "all items, all regions" is 31% since 2012 (228 -> 298). Which is basically 3% annualized, or "normal".

I don't think we are out of the woods yet. China reopening could put upwards pressure on energy markets that are already supply constrained.

jerf 4y ago

Albeit only to the extent where it could be holding even or even slightly growing, but the noise in the data happened to be high before and lower now. If you look back over other periods of inflation growth, they have periods like this in them; nothing goes straight up or straight down. I'd be much less likely to say something like this if it was down by 1 or 2% or something. However, it is also compatible with the Fed slowly getting it under control, and slowly under control is better in a lot of ways that quickly getting it under control. Basically, the numbers we have now don't mean a lot, except that extreme things aren't happening.

draw_down 4y ago

codeslave13 4y ago

Energy is still very fickle. Locally ive had 30-40 cent price swing both ways over 7-8 days. Diesel is still in the shitter. We simply cant produce more. And all it will take this winter is some good storms and i think energy will crank back up. Nit just energy though (thats where most of the drop has come from) most supply chains are still barely functional. Its just all still a giant mess

toomuchtodo 4y ago
Fed can’t print refining capacity or EVs unfortunately. Demand destruction is a blunt force tool. Tangentially, "Green Banks" are popping up from the inflation reduction act, which will improve the targeting of economic policy in this regard (cheaper money for clean energy, storage, energy efficiency, electric mobility). https://reasonstobecheerful.world/green-banks-are-turning-climate-action-dreams-into-realities/ https://reasonstobecheerful.world/green-banks-are-turning-cl... https://www.epa.gov/inflation-reduction-act/greenhouse-gas-reduction-fund https://www.epa.gov/inflation-reduction-act/greenhouse-gas-r...
Analemma_ 4y ago
The Fed generally reacts to core (i.e. without energy and food) inflation. You really can't count on monetary policy to help you with energy costs; buy an EV and/or a heat pump.
themitigating 4y ago
The amount of diesel used for entertainment in the US is shocking considering how vital it is to the economy.
- SV_BubbleTime 4y ago
  >diesel used for entertainment As in?
  - gedy 4y ago
    Maybe Vin?
  - vondur 4y ago
    Im guessing large bands on tour with tour busses and trucks for the equipment? Look at how large of a show the recent Rammstein concerts were.
  - thwayunion 4y ago
    Presumably non-commercial vehicles and non-commercial boats; the quantity used may be large but as a percentage of commercial, industrial, and heating it's fairly small.
  - accrual 4y ago
    All I can think of is the semi trucks carrying not just entertainment, but all manner of physical products needed by almost every industry.
  - deleted 4y ago
    [deleted]

time_to_smile 4y ago

When you look at the various lens of CPI over time for this chart [0] it's not completely obvious to me that we're in a long term downward trend for inflation. We've definitely seen some important dips in inflation the last two months, and I think the fed is correct in not being too aggressive. At the same time it's really hard to predict the next point in any of those lines. Additionally all of those "lower" inflation values are still above anything (outside of energy) we've seen in 20 years. Not to mention that inflation this November, while lower than this October, is still higher than last November. 0. https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm https://www.bls.gov/charts/consumer-price-index/consumer-pri...

tiahura 4y ago
What do you mean by long term?1 year or 10? If you watch CNBC most CEOs are saying that the price pressures have been abating over the last quarter or so. The take away is that we’ve peaked. Getting down to 2% is going to take time and pain.
- no_wizard 4y ago
  Are these cash rich businesses that the CEOs are head of that will benefit from the inflation curbing measures though? Lots of cash on hand while the value of the currency goes up means you can buy overseas material far cheaper than before. I don't think its going to be "even" on price pressure though. Businesses that routinely borrow money - which are alot actually, and not just in speculative ways - are of course going to be hurt. The most obvious is real estate / mortgage / construction industries . However the restaurant, automotive, and light manufacturing[0] industries (to name a few) are also going to be negatively impacted. [0]: https://en.wikipedia.org/wiki/Light_industry https://en.wikipedia.org/wiki/Light_industry

ClarityJones 4y ago

Inflation is an increase in the general price of goods and services in an economy. Ask yourself what is currently driving price increases? In my estimation it's the Fed's own rate hikes. The price of mortgages is going up. The price of car loans is high. The production of consumer goods relies on leverage and the increased finance expenses are pushing up the price of milk, gas, clothes, etc. Of course the rate of inflation is slowing, the Fed is slowing their hikes from the previously imposed a .75 raise to the present .5 hike.

georgeecollins 4y ago
>> Ask yourself what is currently driving price increases? It's good to remind people that the reason for inflation up to this point is probably: - The US government spending a huge deficit during covid. - The war in Ukraine causing shortages / high prices for grain but most importantly oil and gas. - Covid lockdowns in China creating shortages. I understand that inflation sucks, particularly for people where gas or food is a big part of their spending. But I am also amazed at how our economy seems to be enduring a world wide pandemic and major war. There are many times in history when shocks like this caused much worse problems. As an American I am proud of how resilient our institutions are. But I could be counting my chickens before they hatch.
JamesBarney 4y ago
Mortgage rates and interest rates on car loans aren't factored into the CPI.

paulpauper 4y ago

We're going to need a year of price stability before confidence comes back. It probably will not take much to get prices going up again.

alphabettsy 4y ago
How much of confidence is tied to inflation and how much is tied to talk of inflation?

bitshiftfaced 4y ago

Nah, it's been teeter tottering around 6% for the last 12 months. Maybe it'll continue to trend down, but we could've said that in April based on the same belief, and we would've been wrong. Disregarding the last year, we haven't seen our current level of inflation for forty years. We are by no means out of the woods yet. The balance sheet is trending down, but we're only where we were a year ago, so still up ~5 trillion from pre-covid levels.

mywittyname 4y ago
But if you look at the past 3 months, it's sub-3.0% annualized. Overall CPI-U was 0.4%, 0.4%, and 0.1% for the past three months, with some sectors seeing price declines.

hajile 4y ago

Remember, we've now inflated 30+% (wholesale goods) since April 2020 and even if it stabilized 100% right now, the results of that inflation are going to haunt the system for a long time.

mywittyname 4y ago
We also just exited a decade of extraordinarily low inflation. Cumulative inflation over the past decade for the CPI-U "all items, all regions" is 31% since 2012 (228 -> 298). Which is basically 3% annualized, or "normal".