Census results and prospects for inflation

[ejman]

Well, we actually do need more people in the US, since the working age population would otherwise be in decline. Not good for the economy, not good for SS, and not good for those of us who will need skilled care, as well as not being good for the US's continued technological competitiveness. Time for Porky, I suppose.

I do wonder to what extent technological progress such as AI, automated production etc will reduce the need to tie economic growth to population increase. This past decade was the slowest rate of population growth for quite a while but yet the economy did manage to grow and AI and automated production is still in its infancy to a large extent.

 

[Mr._Graybeard]

I do wonder to what extent technological progress such as AI, automated production etc will reduce the need to tie economic growth to population increase. This past decade was the slowest rate of population growth for quite a while but yet the economy did manage to grow and AI and automated production is still in its infancy to a large extent.

Of course, the downside to automation is that it eliminates jobs. Most people in this country need to work to have a decent life.

Remember George Jetson? He rode his spaceship and moving sidewalk to get to w*rk, where he put his feet up and took a snooze. Automation back then was seen as all convenience -- but it also can disrupt lives. In the real world, George would have been at the top of the RIF list.

IMO, some aspects of technology have taken a dystopian direction over the last 20 years. I dread the day when hackers can produce convincing fake videos of public officials -- it isn't far off.

On another topic, DW and I spent a couple weeks in Tokyo in 2019. The Ginza is sparkling and glamorous, and neighborhoods are tidy in spite of the country's "lost decades" of economic growth. If you were to throw a gum wrapper on the sidewalk, someone behind you would likely pick it up and put it in a trash bin. The population is socially structured to a level we'll never see.

Japan's national debt has risen to 223% of GDP. It hasn't resulted in runaway inflation, though -- in fact, the country is fighting to keep deflation at bay.

 

[OldShooter]

Of course, the downside to automation is that it eliminates jobs. ...

That's a common concern but it amounts to "This time it's different." Maybe. Maybe not.

The other problem with looking to automation and productivity improvement is that there are many things that are not amenable to productivity improvement. Automation will never increase the productivity of a string quartet or shorten Chopin's Minute Waltz to be under a minute. More prosaic, I am not sure I want a robot to replace my barber and I don't think we'll see robot residential electricians or plumbers. I've read a couple of articles pointing out that the pay for these types of jobs will continue to rise specifically because they can't be automated. So there is some inflation for you.

 

[Music Lover]

I think one problem is that we measure our economic success based almost solely on "growth."

While it's very possible to have a vibrant, successful society without it, the rich and powerful only care about personally becoming more rich and powerful.

Somehow, I think the rest of us will do just fine if population trends downward.

People have been conditioned to to believe that increasing the population is a requirement but there really is very little downside to a smaller population.

 

[Closet_Gamer]

I don't forecast things...but if I had to make a bet right now, I'd bet on inflation for loads of reasons.

Money printing
Govt explicitly getting that money in the hands of people who will spend it
Infrastructure spending
Covid fueled savings among the well off that is about to come off the sidelines
Global Covid supply chain disruptions (Indian call centers)
Wealth effect of the equities market
"Blow that Dough" psychological effect of Covid deaths

I think those of us who have assets will be fine...they will inflate.

As ever, the people who get plastered will be the less skilled, working segement of society. Their wages won't grow fast enough to keep up with the inflation. Most of us on this board will just see some gyrations in our savings velocity or SWA.

My $0.02

 

[Potterquilter]

I wonder about the post Covid changes that may affect inflation. With the shift to people working at home, some possibly permanently, the restaurants, gas stations, office space, and car replacement for example were affected. Also, many items, like washers and dryers are in low supply. Supply and demand often raises prices.

Here in my upper middle class area our real estate is booming, food is more expensive, and restaurants (which are packed) have jacked up their prices. I know several people who are waiting months for delivery of large appliances.

It will be quite interesting to watch the transition to a fully opened country, with Covid wildly out of control around much of the world. How that will affect inflation, who knows.

 

[Scuba]

I wonder if there is a credible inflation metric. For many years, inflation has supposedly been low, yet the prices of many things we consume have increased astronomically. Our monthly health insurance premium has more than doubled since our ER 4.5 years ago. Grocery prices have skyrocketed, as have restaurant prices. Same for wine. Travel prices had increased substantially as well pre-COVID, and while there are some good near-term bargains, demand is booming and prices will soon reflect that.

The only categories of our spending that have decreased are mortgage payments due to refinancing at a very low rate and gasoline. Virtually everything else is higher by a substantial degree.

 

[Gumby]

Since I have been the major grocery shopper over the past year, I have noticed that package sizes are smaller than they once were. For example, a pint container of ice cream is now only 14 oz. A can of tuna is now 5 oz. instead of 6. And so on. In addition to messing up older recipes, these changes represent hidden inflation, because they sure didn't drop the price when they cut the size.