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The Almighty Buck Businesses Technology

Inflation Hit New Four-Decade High in June as Prices Climbed 9.1% (nytimes.com) 259

Posted by msmash from the how-about-that dept.
Prices in June climbed 9.1 percent from a year earlier, the fastest pace since 1981, as soaring gas prices, rising rents and swelling grocery bills made everyday life more expensive for American households. The pickup in prices was broad and faster than expected, spelling trouble for the Federal Reserve. From a report: The inflation index, including food and gas could slow down in July's data because prices at the pump have moderated in recent weeks. The national average cost of a gallon of unleaded gas peaked at about $5 last month. This week, it was around $4.65. But gas prices are volatile and could shoot up again. The report contained unwelcome news beyond the headline number. A core inflation index that strips out food and fuel prices -- giving a sense of underlying inflation trends -- remains high and came in faster than economists expected The core index climbed 5.9 percent the year through June, barely a slowdown from 6 percent in the previous report.

The core measure actually climbed 0.7 percent from May to June, more than the previous monthly increase and bad news for central bankers. The question is whether that deceleration will last, and the answer is unclear. The global economy has been buffeted by a series of shocks that have not ceased since the coronavirus pandemic began. Factory shutdowns and shipping shortages have roiled supply chains, worker shortages are making it harder for airlines to fly at capacity and hotels to rent out rooms, and Russia's invasion of Ukraine has disrupted oil and gas supplies. Economists have spent more than a year struggling to predict how and when inflation will settle back down.
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Inflation Hit New Four-Decade High in June as Prices Climbed 9.1% More

Inflation Hit New Four-Decade High in June as Prices Climbed 9.1%

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  • "Core Index" (Score:5, Insightful)

    by Hodr ( 219920 ) on Wednesday July 13, 2022 @08:59AM (#62699252) Homepage

    Why is there a "core index" that strips out food and fuel? What possible insight could this provide other than to give a smaller number that doesn't look as bad?

    • Volatility (Score:5, Informative)

      by Comboman ( 895500 ) on Wednesday July 13, 2022 @09:19AM (#62699290)

      In a word, volatility. Grocery prices can change weekly and gas prices change daily. For example, a hurricane in the gulf coast can drive gas prices up sharply for a few weeks and then back down almost as quickly. Prices for other goods and services tend to change more slowly which makes them a better indicator of long term trends. Both long term and short term rates are important of course, which is why both are tracked.

      • Re:Volatility (Score:4, Insightful)

        by Hodr ( 219920 ) on Wednesday July 13, 2022 @10:50AM (#62699502) Homepage

        Sorry, I don't buy it. If you want long term rates, track long term. You want short term, track short term. Pretty sure that why we have a monthly, 12 month trailing, and end of the year rate.

        Removing volatile markets doesn't give you a long term outlook (especially when those markets have been volatile in one direction for a long period of time), it gives you an incomplete outlook.

        Surely whan they say, for example, "March saw a 2% increase, but the last 12 months ending in March only went up 2.5%" that gives a more accurate view of a temporary increase than "March only went up 1% because we decided not to count a bunch of stuff".

        • Re:Volatility (Score:5, Insightful)

          by Whateverthisis ( 7004192 ) on Wednesday July 13, 2022 @11:10AM (#62699552)
          That's not how statistics works. When you're looking long term, you're looking at a signal over time. Volatile markets in this case create noise that can hide more concrete pictures of what's happening. Particularly when you're looking at markets that move very differently than each other. That's because the data and metrics are just useless unless they can translate to some sort of policy action to correct it.

          Food and gas change quickly, but because they change quickly it also means there are more tools in place to adjust those. Housing on the other hand moves slowly, but when it does move forcing a correction is actually quite difficult; the policy tools the government might use to help address rising housing costs take a long time to take effect. So it's important to look at both; data that understands both the volatile markets that change quickly and also the markets that change slowly. A 100% rise in the cost of food and gas might hide a 5-10% cost in goods like housing and related markets like construction materials, meaning there could be a problem brewing and the data you use might not tell you the whole picture until it's too late, particularly because these indices are always a basket of goods. Another way to think of it is demand shock or supply shock can change volatile markets like food and obfuscate the real picture, whereas a problem like too much money in the economy can be seen more clearly in slower moving markets like housing. Fixing a supply/demand shock is relatively easy or maybe you just don't do anything, whereas too much money in the economy can be catastrophic. Rising housing costs are rarely subject to short term demand shocks, but absolutely subject to an inflated money supply.

          So instead they look at both measures in order to get a more complete picture of what's happening. There is no one silver bullet metric to understand the entire economy; multiple tools are needed to give a more complete picture.

          • Re:Volatility (Score:5, Insightful)

            by strikethree ( 811449 ) on Thursday July 14, 2022 @09:38AM (#62702104) Journal

            The only numbers that really matter are the prices of food, housing, and transportation. I think it is great that consumer items like TVs and phones are cheaper overall, but they mean fuck-all to whether or not I am breathing tomorrow.

            Things are desperate for millions of people right now. At issue is whether or not they will be able to sleep somewhere safe and protected tomorrow. The price of shelter is the price to participate in society and millions are being excluded. That will not end well for you self satisfied fucks who are arguing about statistics and what they mean.

        • Re: (Score:2, Insightful)

          by account_deleted ( 4530225 )
          Comment removed based on user account deletion

      • Re:Volatility (Score:5, Insightful)

        by khchung ( 462899 ) on Wednesday July 13, 2022 @11:10AM (#62699554) Journal

        In a word, volatility.

        If that made sense, we would have a "Core Dow Jones Index" and "Core Nasdaq" that stripped out stocks that fluctuates wildly. You don't see that because what made an index useful is to be able to track that volatility.

        No, the reason to strip out food and energy is *precisely* to make the number look better when oil prices shoot through the roof, so whoever is president won't look the mid-term elections whenever OPEC play games with oil production.

    • Re: (Score:2)

      by mysidia ( 191772 )

      The purpose of the Inflation measures are to check on the standing of the overall economy and costs to consumers.. The Core Inflation is used to adjust the benefits of a number of government programs and financial instruments such as Inflation-Protected securities for inflation, And, therefore it's really really important then that they have a number to accurately reflect Inflation that does not Overstate the amount of inflation just because of changes in price for a few goods and services such as

      • Re: (Score:2, Insightful)

        by stabiesoft ( 733417 )
        Exactly what percentage of the average US citizen is left after stripping food, fuel, housing, insurance, medical? And if fuel includes utilities like juice and nat gas, really what is left. Even travel cost is highly correlated with fuel. You are correct, core is used for government payouts, and so core is purposely kept low.

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      Why is there a "core index" that strips out food and fuel? What possible insight could this provide other than to give a smaller number that doesn't look as bad?

      Because there can be other things that influence the index. Housing prices, for example - if rents or interest rates shoot up, raising housing costs, but food and fuel costs remain stable, you sort of want to know this.

      Even food and fuel isn't necessarily a good index, because some foods shot up, but other foods stayed stable - meat for instance has

    • What possible insight could this provide other than to give a smaller number that doesn't look as bad?

      politics.

  • There are some things that are cheaper. (Score:4, Funny)

    by olsmeister ( 1488789 ) on Wednesday July 13, 2022 @09:04AM (#62699264)
    Stocks.

  • A pandemic and then printing money (Score:5, Insightful)

    by Virtucon ( 127420 ) on Wednesday July 13, 2022 @09:10AM (#62699270)

    We go through a pandemic, lockdowns, shutdown economic activity so people can't work, and then we pump trillions into the money supply. You then have economic leaders and economists who just shrug their shoulders and say "We didn't get it right." or "We didn't think inflation would be a problem."
    Hey, what could go wrong?

    • Re: (Score:2, Interesting)

      by Anonymous Coward
      They don't care because inflating away the national debt is probably the easiest way out of the problem for them. Don't have to raise taxes or cut spending.

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        Except that they're not paying down the debt with all this money printing -- they're still increasing the debt.

      • Re:A pandemic and then printing money (Score:5, Informative)

        by Whateverthisis ( 7004192 ) on Wednesday July 13, 2022 @11:20AM (#62699582)
        Quite frankly the national debt in the US isn't really a concern. In fact in some ways it's an asset for the US, because US Treasury bonds are a reliable asset to invest in so people want to own US debt. US National Debt stands at around 108% of GDP, and the US has many, many tools to address national debt if they really had to.

        Compare that to Japan with 236% of national debt to GDP but with literally 0% GDP growth for nearly 20 years and an aging population; they have a real debt problem and few tools to deal with it. Or Italy with 137% national debt to GDP, but they don't control their own currency and have limited population growth; also few tools to deal with it. Or China, which officially has around US$5T in debt, which seems low. However there is a massive shadow banking system with over $13T in debt that makes up for China's lack of a stock market or ease of financing, and most of this is unregulated so the quality of the loans is questionable, particularly when the assets backing those loans are real estate projects with no tenants. When Chinese banks are freezing deposits and people protesting wanting their funds are broken up violently by the police, that is a debt problem. The US is a LONG ways from that.

        • Yes, all of the above but it’s important to point out how many fiat currencies are pegged to the dollar and most of the world markets trade in dollars. This effectively puts the world under the USD and when it’s inflated all the boats in the world ride that tide. It’s hard have inflation when you dilute the entire world.

    • Re:A pandemic and then printing money (Score:5, Informative)

      by RobinH ( 124750 ) on Wednesday July 13, 2022 @09:23AM (#62699298) Homepage
      The pandemic did create a short term shock to the system, but the longer term situation was always going to be inflationary. The baby boomers are in mass retirement right now, and over the next few years, and the cohort graduating from high school is much smaller, so the overall size of the workforce is going down. Just think about health care in particular... doctors and nurses are retiring at a faster rate than we're replacing them, and COVID created a whole bunch of incentive for doctors and nurses close to retirement to take an early retirement, at precisely the same time when boomers are now entering a period of their lives when they need more health care. There's no obvious lever the government can pull to make this situation better. The problem rests with the decisions of families on whether or not to have kids 25 years ago. This isn't just healthcare either. It's just math... we have fewer people producing and just as many consumers. Get used to having less. On the plus side, if you're just graduating or in Gen X, enjoy the really good job security and constant high wage increases. Just pray the wage increases can keep up with inflation.

      • Get used to having less

        Short term. But medium and long term, should not be, no.

        In an economically free society, the more people, the better. [juliansimon.com] Counterintuitively, they solve shortage problems faster than they become issues, aside from short spikes, and in the long run prices drop, reflecting increased supply.

        But that relies on not having iatrogenic problems in the economy. In medicine, this refera to problems caused by the doctor, or hospital. In govnment and politics and economics, it refers to problems caused by fingers in th

      • Boomers retiring is deflationary. They will be downsizing and their incomes removed from the economy. As they expire their retirement portfolios will be liquidated.
      • Baby boomers are delaying retirement because of our economic problems. They won't leave jobs until it looks "safe enough" to move to a fixed income.

    • Without "pumping trillions into the money supply" (a.k.a. stopping business from collapsing during a shutdown), we would have had an instant recession and super high unemployment that would have taken years to recover from and make the 2008 Great Recession look like mild downturn in comparison. A little inflation (at a time of record low unemployment) is a far more manageable problem. It's definitely the lesser of two evils.

      • Inflation isn't too bad, as long as it doesn't get way out of hand. What you actually want is a bit of inflation. Not too much, so people still want to accept your currency for their goods and services, but also not so little that people would rather cling to it than spend it.

        An inflation bordering on 10% is a bit steep, but it's also a pretty good incentive to spend that dough on something while it still has value.

      • 9% inflation is not "a little". Inflation is an exponential function, it runs away fast, do the math and see where you end up with 9% inflation in ten years. Hint, it's not 90% higher prices.

        Inflation also crushes the lower income people, the prices they pay go up right away, their wages might go up next year.

        • Re: (Score:2)

          by Targon ( 17348 )
          Inflation is really starting to hit businesses. Utility bills, such as electric are going up and up and up, cost of goods required to do business are going up and up and up. They need to pass some of this along, so things like free delivery need to switch to paid delivery, and don't think that the price of everything isn't causing a lot of people to buy or do less..people will stay at home, rather than going out and spending money.
          • But this is in fact what is required. Demand destruction. And the gp post statement of "An inflation bordering on 10% is a bit steep, but it's also a pretty good incentive to spend that dough on something while it still has value." is the nightmare scenario. It pushes inflation up even faster because people buy now at any price expecting things to cost even more tomorrow. I know I now have that thought process sometimes. Pre-9% inflation, you bought when you needed something as you believed it would be avai
        • There's no reason on earth to think that inflation will continue to increase at 9% for the next 10 years.

          The amount of wealth everybody thought they had was out of line with actual production, but not that out of line.

          As for people not understanding exponents, I guess most of them also don't understand annualized calculations and feel like it's an additional 8% to 10% every month when the new figures are released.

    • Doing all those things may have been the correct solution to the pandemic. Ten years from now we should be able to look back and evaluate. But what drives me crazy is people, including economists who pretended that the stimulus money would not be inflationary. This is exactly the expected economic response to adding money to an economy that had supply issues. COVID was not a standard economic "downturn" where a lack of capital was an issue, it was an externally applied limit on productivity,
      • The economy did not have supply issues for necessities. Businesses deemed necessary, like those making body bags, stayed open and continued to produce. Businesses that produced non-necessary things shut down.

        In general, the demand for necessary things is relatively flat. You don't stop buying toilet paper to save money unless things are really desperate. And except at the peak of the pandemic, you still get your hair cut. And I hope nobody is trying to save money cutting back on deodorant.

        The CPI i

    • Re:A pandemic and then printing money (Score:5, Insightful)

      by scamper_22 ( 1073470 ) on Wednesday July 13, 2022 @09:45AM (#62699342)

      There's a certain god-like arrogance to some leaders.
      It defies common sense.

      I grew up in Africa, so inflation was just a part of life. The strange things though is moving to Canada, there's groups of people with views that just astound me. Inflation can't be a problem in a modern economy? Deficits don't matter...

      I sit there and wonder. You know... if the solution to poverty is just deficits and printing money... then all those African nations must be pretty darn stupid or evil to have not solved it already.

      It extends to other issues too. Like social cohesion is a huge thing. Tribalism and ethnic conflict were real problems where I grew up. You really tried to minimize it. In a weird way, it was often seen that the more education you got, the less tribal you *should* be. The less you should care about your race/culture... Maybe a colonial legacy, but that was the vibe.

      So it's weird that now in Canada it's almost like the educated are the ones pushing for tribalism and having everyone be who they are and fermenting tribalism. I sit there... like what do you think is going to happen here? You really want everyone being who they are without common unity? You really think this is a good idea? The response from so many Canadians is a mythical these problems can't happen here.

      I work at a bank and I remember a few years back attending a large meeting where our VP was seated at our table. I was just listening. What struck me was the sheer arrogance of how he spoke. I'll paraphrase as best I can remember, but he basically said

      "I don't know why people are worried about their job and money. Plenty of jobs and we'll eventually have a guaranteed income. People are just causing trouble"

      On the one hand, I guess there was comfort in that a guaranteed income is probably being talked about at a high enough level. On the other hand, it caused me distress to see how casually this guy spoke ignoring very real human issues. People don't live in a theoretical future, they live now. You're not giving out a guaranteed income right now. People can snap at any moment. Protests can get out of hand. Revolutions can happen. Economies could collapse. Inflation could take over. Riots can happen. Yet, here is was... so confident I guess in Canada's good government that people concerned about their own well being were just trouble makers. They got it... they got it. Trust them.

      I don't get how so many really intelligent people can be so arrogant or ignorant of reality. It baffles me.

      • Remember that these people can be flippant because they wonâ(TM)t personally be affected. I recall last year when an acquaintance of mine - with a household income of around $250k - couldnâ(TM)t understand why people on Facebook were complaining about $4/gallon gasoline. It doesnâ(TM)t affect him or me, yet I have other acquaintances who canâ(TM)t afford the extra $100/month. He doesnâ(TM)t get that.

      • Those elitists who ignore the risks should see Sri Lanka [youtube.com] as a reference right now.

      • Re:A pandemic and then printing money (Score:5, Funny)

        by argStyopa ( 232550 ) on Wednesday July 13, 2022 @10:57AM (#62699524) Journal

        Any chance you would have the time to run for US president in 2024?

      • I think I just received a cultural enema.

      • I sit there and wonder. You know... if the solution to poverty is just deficits and printing money... then all those African nations must be pretty darn stupid or evil to have not solved it already.

        If you think of currency as "shares" of a country, that you need to use to buy whatever of value that country is producing, that is what creates the demand for the currency. Haiti or Zimbabwe don't produce a lot that outsiders value, so there's not much demand for their currency. I'd guess it's mostly internal de

    • I have no idea who these economists are, but I'll take your word for it. When Trump was president, the stimulus checks seemed like a great idea to many (myself included) because the pandemic really was an unusual situation. But Trump delayed sending them out so that they could be printed with his signature. So it was a necessary economic measure but not so necessary that it couldn't be delayed a few days for political reasons.

      Once Biden and the Democrats took over, they felt compelled to repeat the sam

    • Re: (Score:2)

      by gtall ( 79522 )

      Supply chain throttling and Russia invading Ukraine which caused oil prices to spike. Also, there was pent up demand due to the lockdowns being lifted.

      • Oil prices have been going up ever since late 2020. Prices [macrotrends.net] actually fell in 2020 due to the pandemic but took off in 2021, up 55% and so far in 2022 up another 45%.

        There is a lot of speculation in the market and a war and sanctions against an energy exporter don't help.

  • The entire attitude about raising interest rates when inflation is increasing makes me remember the old, "The beatings will continue until morale improves!" line. Inflation is being driven by high gas/oil prices, which causes transportation costs to go up as well. If it costs more for a business to get items to sell, costs more to deliver, costs more to send staff out on site due to high gas prices, that will be the primary driver of price increases. Electric prices going up, yep, all businesses will

    • Inflation is being driven by high gas/oil prices

      Inflation is being driven by the printing of $2.2T. Which, by the way, was an increase in the money supply by about 11%. Isn't it odd how the prices have gone up by about the same amount?

      • The situation is ok though. All that money will naturally flow into the hands of the rich, and once that settles down the wild inflation will settle down too. Some prices will even come back down to familiar levels.

        Incidentally, as another poster in this thread stated, the prices of stocks are quite low now. If anyone is interested in joining the ranks of the rich, now is an excellent time to get started. Ownership of the means of production (not of dollars) is what distinguishes the rich from the poor,

        • Most people don't care about becoming rich. If they did they wouldn't be on Netflix all day or watching sports or Kardashians
        • Probably a bit early to start buying. And the reality is the poor, have no spare money for the market. Most (maybe all) of the posters on this forum are not in the poor category.

          • People who don't have enough money to invest in stocks/bonds DO have more immediate concerns, agreed. They need to acquire education/certification to work in a field that actually pays. The easy jobs that anyone can do without much education don't pay enough to create upward economic mobility.

            There are SOME low-education jobs that DO pay serious cash, but it is because there is some other reason nobody wants to (or can) do it. Either they are dirty work that people hate, or they require some highly speci

      • Re: (Score:2)

        by Targon ( 17348 )
        Have you heard anything about the value of the dollar being at fault for inflation recently? Think again, the USA produces 97 percent of the oil we need, so nope, it's not "the value of the dollar is lower" as a reason for inflation. It's all about stupidity by people who feel that we should export things from the USA, then import again at the "global price". You may not need to drive 20+ miles to get to work, you may not care that it costs double the amount to put gas in your car, but for those who d
        • The US produces 97% of the oil we need but prices are determined by global markets. That's the worst possible solution except for all of the other ones that have been tried.

          Let's say we prohibited oil exports and put a price cap of $2.50/gallon on gasoline, what do you think would happen? The answer is that people would buy as much gas as they could for $2.50/gallon and illegally export it at $4/gallon netting a nice $1.50 profit. And US gas stations would be dry and now you couldn't buy enough gas to

          • Where do these "$200k" numbers come from? That seems to be an outlier, and not where my small samples suggest.

            I'm a UC engineering undergrad and masters grad, admittedly a long time ago, but when I go right now and look at the annual costs for getting an undergrad degree, even UCLA is in the $17k range per year. And the Cal State system (better for undergrad engineering degrees) is only around $5k per year. That's a bargain for an extremely high quality education. Here in AZ, ASU, NAU, and UA are similar in

            • And my first job out after my undergrad degree paid enough that I could have paid off my student loan in the first year or two, but there wasn't a real reason to do so. Again, only a sample of one, but I'm not a member of the gentried class. Just a working stiff.

    • Wow thank god we donâ(TM)t have you running the Fed. You could not be more completely wrong. We have had high inflation many times. Most recently in the 70s.

      Paul Volcker used blunt force to finally break the high inflation, raising the average Fed Funds rate up to over 16% by 1981), creating recessions and market losses - while finally breaking the inflationary cycle. It worked. We know that this strategy works. That experience is a key part of what is now called the Taylor Rule, which calls for 12.

      • Why would stock markets plummet? In periods of high inflation, business earnings tend to increase. Stocks are somewhat inflation-proof. On the other hand, stocks are not fed proof. The P/E of the SP500 is 20:1 or, in other words, you are essentially getting 5% interest by owning stocks but you take a risk of the downside. If you can get 1% at the bank, that's a great deal. If a deposit account pays 10%, you'd want to get at least 15% to own stocks. That would mean that stocks' *relative* worth is 1/3

    • Corporate greed is contributing to the problem.

      https://www.epi.org/blog/corpo... [epi.org]

      https://www.npr.org/2022/02/13... [npr.org]

      Data from the U.S. Commerce Department shows that corporate profit margins are the largest they've been in 70 years, and that's caused progressive leaders like Senators Bernie Sanders and Elizabeth Warren to cry foul, saying some companies are using the pandemic as a cover to raise prices far more than is warranted.

      So no, businesses are doing the complete opposite of keeping prices down.

      • Re: (Score:2)

        by Targon ( 17348 )
        While corporate greed can't be ignored, on a pure, "what impacts EVERYONE, from large businesses to small", is the impact of high gas/oil/electric prices. The government DOES have the power to just say, "you can NOT export oil you have gotten in the USA", or to at least set export controls. If it's oil/gas gained from federal lands, the government could also set a, "you can't charge more than X amount" for it as well.

    • Raise interest rates, and all it does is make other things more expensive.

      That's entirely the point!

      If businesses can cope with X% inflation. And workers then get X% pay rises, and businesses increase prices X%. Workers get X% raises again.
      Guess what you now have perpetual X% inflation.

      Fine if X is 2%
      Not so fine if it's 10 or 20.

      Raising interest rates enough to slap businesses in the face, and kick workers in the balls, IS THE POINT.
      Businesses will go bankrupt workers will lose their jobs. Businesses won't be able to just pass on X% price increases. Workers won't be able to

    • Your hypothesis would be better-supported if low interest rates hadn't driven the housing market to the point of near collapse.
    • High gas / oil is a result of the administration explicitly saying higher gas prices will fight global warming.

      https://thehill.com/policy/ene... [thehill.com]

  • Disinflation already starting (Score:4, Insightful)

    by jacks smirking reven ( 909048 ) on Wednesday July 13, 2022 @09:51AM (#62699356)

    This could be a sign of recession kicking in but prices are starting to drop:

    Oil Falls to Three-Month Low as Recession Fears Spook Market [bloomberg.com]

    Chip shortage looking to turn into a glut soon [twitter.com]

    Disinflationary forces rise as commodity prices tanked on recession fears w/Brent tumbled 8% to $99, Copper collapsed nearly 5%, iron ore slumped 3%, Corn dropped 7%, Wheat fell 5%. Bloomberg Commodity Index down 4%. [twitter.com]

    Let's all remember that while macroeconomics does have some decent predictive power there is a large part of it that is simply reading tea leaves still.

    • Look at energy use stats. If energy use is dropping (or its growth is slowing), the economy is slowing, whatever the cause. Unfortunately I don't have any idea where to get at least monthly stats.
      A secondary indicator could be pollution levels. During the first chinese lockdowns which they did not admit to, pollution reduction was a sign of "no industrial activity". This one is tricky to correctly factor in the type of pullution of country you're looking at.
      Price signals are IMO absolutely worthless at the

      • Heres the June 2022 EIA energy report:

        June 2022 Monthly Energy Review [eia.gov]

        Do you have a source that explains the relationship you are describing, would like to read it.

        I am not making claims of economic growth or recession (although it seems likely to recede for a little while at least) just that this 9.1% number is more complicated than it seems and CPI is also a lagging indicator.

        For "regular folk" the two biggest pain points (food and gas) look to be on the decline in terms of real numbers and at the very lea

        • The general idea is based on this:
          https://www.researchgate.net/f... [researchgate.net]
          tell me your energy consumption, I can guess your GDP. +/- some error margin.
          I absolutely love this part: [the relationship is pretty much the same as the] scaling of metabolic rate with body mass in animals.

          Concretely the relationship I'm describing
          https://jancovici.com/en/energ... [jancovici.com]
          About half way down.
          I know, random link... But look the guy up, he's a really big fish in France.

          Thanks for the link. Should have thought of the EIA. Although som

    • Expectations influence behavior (whether those expectations are accurate or not). Part of the reason for fuel inflation is that there is strong belief that, like microchips, we might go from shortage to glut. Hence oil companies aren't interested in spending more to increase production that they would have to shut down in a hurry. I'm not saying those expectations are correct. But they drive behavior.
  • Blah blah blah inflation! Who cares as long as the corporations are recording all-time record profits and managing $$$billions for stock buybacks and dividends, and CEOs are getting record bonuses. Sure, they'll need to lay off a few thousand employees, but who cares?
  • Inflation is when currency loses value due to over-circulation, not when commodity prices spike due to scarcity or speculation. The latter is literally just price, and it can and always does eventually reverse. Inflation, however, is almost impossible to reverse, so it's bald-faced fearmongering to call high prices "inflation" when the cause is clearly emergency-based (Russia's murder spree in Ukraine).

  • And corporate profits are skyrocketing (Score:5, Insightful)

    by GrumpySteen ( 1250194 ) on Wednesday July 13, 2022 @12:03PM (#62699756)

    "The S&P 500â(TM)s profit margin had never before hit 11%, but it surpassed 12% in 2021 and is expected to reach 13% in 2022"
    (source) [marketwatch.com]

    Corporations are taking advantage of the situation to increase their profit margins and claim it's all inflation. Major producers of energy, food and other necessities are all reporting record profits and those profits.

    Inflation is still an issue, but it's being aggravated by corporations making a grab for all the short-term profits they can get regardless of the effect it has on the country.

  • 9.1% is the year over year figure, which says very little about the current rate of inflation. The month over month figure for June was 1.3%, which is an annualized rate of 15.6%, but that does not include the monthly compounding. The monthly compounding means that the current inflation rate is about 17% a year, and that is even still using the various fudge factors that were created to make it seem lower. This is the same rate as the days of Jimmy Carter.

    Most genius "journalists" don't even report the m

  • Now that we have sustained high inflation, I look forward to the Fed compensating with sustained zero or negative inflation, in line with their policy.

    https://www.cnbc.com/2020/08/2... [cnbc.com]

  • The "next-to-no-interest" wild party was extended far too long. Now there's nothing left. No leverage remains, and no yanking back and forth on lending rates will help. Understand that this was "earned". The good news for the Republicans is that the timing has worked in their favour. While they have been the most strident of objectors to ending the prosperity party, the inevitable crash is happening under Democratic governance. So they can do what they would have done under any circumstance, but with a thin

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