Key Inflation Measures Are Falling at Their Fastest Pace in 40 Years

[onthedarkside]

 

Last Friday, the Commerce Department released its monthly update on personal income and spending, and as it does every month, the latest release, covering February, includes data on a key measure of inflation that’s closely watched by the Fed: the Personal Consumption Expenditures (PCE) price index, both in its overall “headline” version and an array of variants.

 

Over the past two years, we’ve gotten used to hearing about record-breaking inflation readings; last June, for example, the Consumer Price Index rose at its fastest twelve-month rate — 8.9 percent — since the peak of the 1970s–early 1980s inflation wave that was finally brought to an end by former Fed chair Paul Volcker’s brutal reign of tight money.

 

But this month’s record is a little different.

 

READ MORE

https://jacobin.com/2023/04/inflation-falling-volcker-summers-housing-pce-cpi

 

[Credo]

This seems like some good news, but when it's economics, it tends to be good news for some bad news for others.   

Thus far, I have been impressed with the administration's ability to get us through the pandemic and the massive upheaval.   

[nauseus]

 

Stripping out housing prices, food and fuel to fudge the numbers to get the numbers you want.

 

Another nonsense article. 

[placeholder]

3 hours ago, nauseus said:

 

Stripping out housing prices, food and fuel to fudge the numbers to get the numbers you want.

 

Another nonsense article. 

Another reflexively nonsensical comment, actually.

Clearly you don't get it. First of all, whether under Trump or Biden, core inflation as always been the preferred measure of inflation to strip out volatility. Prices of fossil fuels and food typically jump around a lot.

As for rents. Unlike other items rental contracts usually come due once a year. So if prices rose sharply over for the months of january through june and then and then rose from july to december would mean inflation has slowed down markedly in those last 6 months. And if the slowdown continued into the following january, then it would finally show up in the statistics even though price increases had already slowed down markedly.

[ozimoron]

US 10 year yields are dropping like a rock, inverted compared to the 2 year which is apparently a harbinger of a recession coming.

 

The US non farm payrolls are out this week and they will be very interesting in predicting a recession coming or not. Gold is rising sharply as a response as the price of gold always rises before and during a recession.

[placeholder]

28 minutes ago, ozimoron said:

US 10 year yields are dropping like a rock, inverted compared to the 2 year which is apparently a harbinger of a recession coming.

 

The US non farm payrolls are out this week and they will be very interesting in predicting a recession coming or not. Gold is rising sharply as a response as the price of gold always rises before and during a recession.

Actually, inverted yield rates can also mean that expectations are that inflation will continue to decline significantly.

 

 

[Isaan sailor]

All I can see is a rising Baht—and it doesn’t bode well for some expats or exports.

[Eric Loh]

22 minutes ago, Isaan sailor said:

All I can see is a rising Baht—and it doesn’t bode well for some expats or exports.

All Asian currencies strengthened in tandem with the declining US 10 years yield signalling slower economic growth with the likehood of recession. Even oil with the decrease output couldn't gain traction. 

Edited April 5, 2023 by Eric Loh
add word

[nigelforbes]

9 minutes ago, Isaan sailor said:

All I can see is a rising Baht—and it doesn’t bode well for some expats or exports.

There is almost no impact on the value of exports regardless of whether THB is strong or weak. The key factors that affect export levels are the state of the home economy of the importing country. I've posted the BOT report on this subject several times, they have looked at Baht value vs export levels over two decades and the link just doesn't exist.

 

 

[nauseus]

2 hours ago, placeholder said:

Another reflexively nonsensical comment, actually.

Clearly you don't get it. First of all, whether under Trump or Biden, core inflation as always been the preferred measure of inflation to strip out volatility. Prices of fossil fuels and food typically jump around a lot.

As for rents. Unlike other items rental contracts usually come due once a year. So if prices rose sharply over for the months of january through june and then and then rose from july to december would mean inflation has slowed down markedly in those last 6 months. And if the slowdown continued into the following january, then it would finally show up in the statistics even though price increases had already slowed down markedly.mc

 

 

I wonder how much money most people have left after paying for a roof, food and transport?

[nauseus]

2 hours ago, Isaan sailor said:

All I can see is a rising Baht—and it doesn’t bode well for some expats or exports.

Directly proportional to the recent weakening of the USD.

[nauseus]

2 hours ago, placeholder said:

Actually, inverted yield rates can also mean that expectations are that inflation will continue to decline significantly.

 

 

Along with most other asset classes.

[nauseus]

3 hours ago, placeholder said:

Another reflexively nonsensical comment, actually.

Clearly you don't get it. First of all, whether under Trump or Biden, core inflation as always been the preferred measure of inflation to strip out volatility. Prices of fossil fuels and food typically jump around a lot.

As for rents. Unlike other items rental contracts usually come due once a year. So if prices rose sharply over for the months of january through june and then and then rose from july to december would mean inflation has slowed down markedly in those last 6 months. And if the slowdown continued into the following january, then it would finally show up in the statistics even though price increases had already slowed down markedly.

You have a sweet tooth - that's why you like fudge. ????

[placeholder]

2 hours ago, nauseus said:

 

 

I wonder how much money most people have left after paying for a roof, food and transport?

Some people would rather wonder than find ound as you have failed to note, unemployment is near a record low. So at least there's no shortage of jobs.t.  

What relevance does your comment have to whether the rate of inflation is increasing or decreasing? And in fact transportation costs have actually declined from 2022

According to the U.S. Bureau of Labor Statistics, prices for transportation are 2.83% lower in 2023 versus 2022 (a $0.57 difference in value).

Between 2022 and 2023: Transportation experienced an average inflation rate of -2.83% per year. This rate of change indicates significant deflation. In other words, transportation costing $20 in the year 2022 would cost $19.43 in 2023 for an equivalent purchase.

https://www.officialdata.org/Transportation/price-inflation/2022-to-2023?amount=20

 

[placeholder]

2 hours ago, nauseus said:

Along with most other asset classes.

Inflation is not an asset. Nor a liability. It's a rate.

[placeholder]

2 hours ago, nauseus said:

Directly proportional to the recent weakening of the USD.

You failed to mention that the weakening came from a very high level. In fact, far higher than any enjoyed by the dollar in the previous administration:

https://fred.stlouisfed.org/series/DEXTHUS

[nauseus]

4 hours ago, placeholder said:

Some people would rather wonder than find ound as you have failed to note, unemployment is near a record low. So at least there's no shortage of jobs.t.  

What relevance does your comment have to whether the rate of inflation is increasing or decreasing? And in fact transportation costs have actually declined from 2022

According to the U.S. Bureau of Labor Statistics, prices for transportation are 2.83% lower in 2023 versus 2022 (a $0.57 difference in value).

Between 2022 and 2023: Transportation experienced an average inflation rate of -2.83% per year. This rate of change indicates significant deflation. In other words, transportation costing $20 in the year 2022 would cost $19.43 in 2023 for an equivalent purchase.

https://www.officialdata.org/Transportation/price-inflation/2022-to-2023?amount=20

 

This is 2023 but we're only as far as April according to my calendar and the oil price is kicking up again, can't you at least wait until the end of the year? 

Edited April 5, 2023 by nauseus

[nauseus]

4 hours ago, placeholder said:

Inflation is not an asset. Nor a liability. It's a rate.

I was referring to the word decline.

[nauseus]

4 hours ago, placeholder said:

You failed to mention that the weakening came from a very high level. In fact, far higher than any enjoyed by the dollar in the previous administration:

https://fred.stlouisfed.org/series/DEXTHUS

Oh no - it's another I failed to mention. 

 

What you failed to mention is that the USD highs of 2022 and early 2023 came after the Fed finally realised that inflation was not "transitory", so aggressively hiked interest rates. Now these are hikes are slowing and are expected to stop, so the Dollar is retreating.

Edited April 5, 2023 by nauseus

[heybruce]

9 hours ago, nauseus said:

 

 

I wonder how much money most people have left after paying for a roof, food and transport?

Evidently enough to keep the service economy running strong and employers desperate to hire. 

[placeholder]

5 hours ago, nauseus said:

Oh no - it's another I failed to mention. 

 

What you failed to mention is that the USD highs of 2022 and early 2023 came after the Fed finally realised that inflation was not "transitory", so aggressively hiked interest rates. Now these are hikes are slowing and are expected to stop, so the Dollar is retreating.

Right. If it keeps on retreating it might get as low as it did for most of the previous adminstration.

[nigelforbes]

15 hours ago, nauseus said:

 

 

I wonder how much money most people have left after paying for a roof, food and transport?

Some months very little, some months a lot, that's the whole point.

[nauseus]

7 hours ago, heybruce said:

Evidently enough to keep the service economy running strong and employers desperate to hire. 

https://www.investing.com/news/economic-indicators/us-private-payrolls-miss-expectations-in-march-adp-3049528

[nauseus]

4 hours ago, placeholder said:

Right. If it keeps on retreating it might get as low as it did for most of the previous adminstration.

And it might get lower than that!

[nauseus]

1 hour ago, nigelforbes said:

Some months very little, some months a lot, that's the whole point.

If you can show details of this variation across housing, fuel and food, that might help me to agree with the use of the "core" method. But to me it's just another fudge, used to produce smaller inflation numbers. 

Edited April 6, 2023 by nauseus

[nigelforbes]

6 minutes ago, nauseus said:

If you can show details of this variation across housing, fuel and food, that might help me to agree with the use of the "core" method. But to me it's just another fudge, used to produce smaller inflation numbers. 

The numbers are right there, hiding in plain sight. Star with fuel and selected manufactured goods.

 

https://www.bot.or.th/App/BTWS_STAT/statistics/ReportPage.aspx?reportID=90&language=eng

 

Here's food inflation:

https://tradingeconomics.com/thailand/food-inflation

[nauseus]

28 minutes ago, nigelforbes said:

The numbers are right there, hiding in plain sight. Star with fuel and selected manufactured goods.

 

https://www.bot.or.th/App/BTWS_STAT/statistics/ReportPage.aspx?reportID=90&language=eng

 

Here's food inflation:

https://tradingeconomics.com/thailand/food-inflation

Thanks, although I see generally higher rises than 5% In Thailand YOY. But I think this thread was concerned with the U.S.

 

For 2022 in the United States: Food-at-home prices increased by 11.4 percent in 2022, more than three times the rate in 2021 (3.5 percent) and much faster than the 2.0-percent historical annual average from 2002 to 2021.

https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=105676

 

[nigelforbes]

39 minutes ago, nauseus said:

Thanks, although I see generally higher rises than 5% In Thailand YOY. But I think this thread was concerned with the U.S.

 

For 2022 in the United States: Food-at-home prices increased by 11.4 percent in 2022, more than three times the rate in 2021 (3.5 percent) and much faster than the 2.0-percent historical annual average from 2002 to 2021.

https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=105676

 

They are almost exactly the same. Food inflation is linked to fuel inflation, all food has to be transported:

https://tradingeconomics.com/united-states/food-inflation

 

Here's US fuel.

 

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_epm0_pte_nus_dpg&f=m

Edited April 6, 2023 by nigelforbes

[heybruce]

1 hour ago, nauseus said:

https://www.investing.com/news/economic-indicators/us-private-payrolls-miss-expectations-in-march-adp-3049528

Thanks for the source.  It supports what I posted:

 

"Thirteen services industries reported growth, including arts, entertainment and recreation, accommodation and food services, public administration and mining as well as utilities, construction and information.'

[candide]

43 minutes ago, nigelforbes said:

They are almost exactly the same. Food inflation is linked to fuel inflation, all food has to be transported:

https://tradingeconomics.com/united-states/food-inflation

 

Here's US fuel.

 

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emm_epm0_pte_nus_dpg&f=m

Another explanation for the similarity of food price changes in different countries, is simply that the markets and prices of agricultural commodities (wheat, sugar, orange juice, etc...) are global.