Latest Inflation Numbers and Discussion

[JoeWras]

I hope the discussion about the credit limit battle (which is unavoidably political) does not preclude you from mulling over the inflation discussion (which is not at all).

No, I think it is important, and Ezra and Krugman started out pointing out potentially inflationary issues from both sides of the isle. Then it kind of went off on one topic. It was a difficult read up to that point, and I just had enough.

But I get how politics feeds into inflation discussion and I continue to mull over the effects of the various politically fed issues (government spending, small groups of legislators focusing on using debt ceiling for leverage, and so on.)

 

[JoeWras]

One more point also bears repeating. The Fed is deeply concerned with changes in the cost of labor (wage growth), more so than employment growth, because that’s what makes inflation persistent.

Anecdote: I was in Wal*Mart recently, and two employees were kind of shouting "shop talk" to each other. It went something like this:

"Yeah, she started at 17, can you believe that? I've been working at 14 forever."

"You gotta do something about that. I'd go into <somebody's> office right now and start your demands."

There was clearly some anger and airing of dirty laundry so a bunch of customers can hear it is kind of uncool. BUT... it shows just how much clout the service worker has.

The previous day, I basically got offered a job on the spot at Lowes while I was just chatting with the cashier (who was a manager). He's desperate. I didn't want the job, of course, I'm ER'd.

Crazy stuff.

 

[milford]

Anecdote: I was in Wal*Mart recently, and two employees were kind of shouting "shop talk" to each other. It went something like this:

"Yeah, she started at 17, can you believe that? I've been working at 14 forever."

"You gotta do something about that. I'd go into <somebody's> office right now and start your demands."

There was clearly some anger and airing of dirty laundry so a bunch of customers can hear it is kind of uncool. BUT... it shows just how much clout the service worker has.

The previous day, I basically got offered a job on the spot at Lowes while I was just chatting with the cashier (who was a manager). He's desperate. I didn't want the job, of course, I'm ER'd.

Crazy stuff.

The current labor distortion in the economy is quite alarming. My SO's public company was told that they were instituting a hybrid work schedule 3 days a week from the office and 2 days remote starting this year for the majority of the employees. However, after a few weeks, she started noticing that some of her co-workers stopped showing up and a month later, she is the only person that still shows up besides her boss on her team. Her boss even mentioned one time, "Wow... it seems like its only me and you showing up nowadays."

Even with all the news of the tech layoffs recently (although if you take a deeper look... the layoffs aren't really that significant because most of the tech companies over hired during Covid) it seems like we haven't come back to a normal employment situation for a lot of the companies.

 

[Markola]

Here’s an interview of Jay Powell from Thursday on the David Rubenstein Podcast. Rubenstein goes bluntly for the hard questions and Powell answers where he can. One takeaway is, Powell says he expects more rate increases. Another is, he watches the services sector inflation more than the other sectors. And, there’s good insight into what it’s like to be a Fed Chair.

Perhaps interestingly, at one point in my career, circa 2009-11, I knew Jay Powell. I’ve been to his house in Chevy Chase a couple of times, he gave me a ride across Virginia to a meeting once, and he was a job reference for me, so I like hearing him talk about what his mind-boggling professional life is like for him now.

https://podcasts.apple.com/us/podcast/the-david-rubenstein-show/id1400511832?i=1000599956455

 

[Koolau]

OUTBACK Steak House was pushing "gift cards" before X-mas. So DW and I bought each other enough gift cards to last the year. FF to last week. We just saw a brief article in the local paper that our local OBSH was ceasing business by end of the month. Well, cwap! We do have 2 other locations on Island, but neither is close nor convenient. So we thought we'd go Saturday to "burn" a couple of cards for lunch. Normal opening time is 11AM. So we get there at 11:20 and a few folks are hanging out on the porch. I was thinking, "everyone else must be burning their gift cards so there's a line." Nope! They had delayed opening until 12 Noon because they only had one cook that day!

So we tucked away our gift cards and will take them with us to the mainland where we're hopeful that labor sanity will prevail - but we've always been optimistic that way.

 

[Mr._Graybeard]

The USA also has a vibrant community of legal (and yes, some illegal) immigrants who work hard and add value to their own personal wealth and to the net wealth of the country. IMO, it is one of the significant advantages the USA had over countries that maintain a more consistent demographic.

Yes. Immigration has historically driven this country's economy.

 

[pb4uski]

And now immigration is a dirty word... how's that working out for us?

 

[Aerides]

65 pages, nice thread you got there, would be a shame if someone politicized it so a pig had to show up...

 

[kgtest]

Here’s an interview of Jay Powell from Thursday on the David Rubenstein Podcast. Rubenstein goes bluntly for the hard questions and Powell answers where he can. One takeaway is, Powell says he expects more rate increases. Another is, he watches the services sector inflation more than the other sectors. And, there’s good insight into what it’s like to be a Fed Chair.

Perhaps interestingly, at one point in my career, circa 2009-11, I knew Jay Powell. I’ve been to his house in Chevy Chase a couple of times, he gave me a ride across Virginia to a meeting once, and he was a job reference for me, so I like hearing him talk about what his mind-boggling professional life is like for him now.

https://podcasts.apple.com/us/podcast/the-david-rubenstein-show/id1400511832?i=1000599956455

Wait, you ride around with the Chairman of the Fed?

 

[Koolau]

Wait, you ride around with the Chairman of the Fed?

No, but I did stay at a Holiday Inn Express.

 

[Bigdawg]

Wait, you ride around with the Chairman of the Fed?

Rode around with a guy who would eventually become the chairman of the fed.

 

[Markola]

^^^^Yes, I rode with the guy who would become the chair of the Fed. Past tense. I was living in DC working for a nonprofit organization whose board included a new trustee named Jay Powell. This was before he joined the Fed board and he was running an investment fund. He was the same understated, thoughtful, fairly quiet person one would imagine from his non-dramatic tv performances. We liked each other well enough, then I took a job in a different city and lost touch and he, well….

 

[GravitySucks]

^^^^Yes, I rode with the guy who would become the chair of the Fed. Past tense. I was living in DC working for a nonprofit organization whose board included a new trustee named Jay Powell. This was before he joined the Fed board and he was running an investment fund. He was the same understated, thoughtful, fairly quiet person one would imagine from his non-dramatic tv performances. We liked each other well enough, then I took a job in a different city and lost touch and he, well….

At least one of you got to retire. That poor guy is probably still working 40 hours a week.

 

[aja8888]

At least one of you got to retire. That poor guy is probably still working 40 hours a week.

He must be worried about inflation gnawing away at his $50,000,000 stash.

 

[Markola]

at least one of you got to retire. That poor guy is probably still working 40 hours a week.

lol

 

[Markola]

He must be worried about inflation gnawing away at his $50,000,000 stash.

You know, that car we drove in across Virginia was a much older and worn BMW than one might expect. LBYM, Baby!

 

[aja8888]

You know, that car we drove in across Virginia was a much older and worn BMW than one might expect. LBYM, Baby!

Yeah, but it still was a BMW. His wife probably drives the big new Mercedes.

 

[Markola]

^^^^. I mean, he’s the public servant, not her.

 

[aja8888]

^^^^. I mean, he’s the public servant, not her.

Actually, he's not, as the position is not elected, it's appointed. But I see your point.

 

[pb4uski]

^^^ Since his annual salary as Fed Chair is $226,300, and he could make millions in the private sector, I'll grant him the public servant label.

BTW, his net worth is reported to be $20-55 million so he doesn't real need that rich private sector gig.

 

[jldavid47]

Since his annual salary as Fed Chair is $226,300, and he could make millions in the private sector, I'll grant him the public servant label.

Even at $226,300 I think he can still pay the mortgage and feed his family even in the DC area.

 

[Letj]

The USA also has a vibrant community of legal (and yes, some illegal) immigrants who work hard and add value to their own personal wealth and to the net wealth of the country. IMO, it is one of the significant advantages the USA had over countries that maintain a more consistent demographic.

+1000 and for that reason I have a lot of faith in the US economy and why we will always stay steps ahead of our nearest competitors especially since US market is the most open and transparent.

 

[Koolau]

You know, that car we drove in across Virginia was a much older and worn BMW than one might expect. LBYM, Baby!

That makes me feel better already! I like hearing that he's a LBYM kinda guy.

 

[Koolau]

Reminds me that we had a thread here once about "famous people" (or some such title) that we had met. Here on the FIRE forum, this story of riding around with Jay Powell would pretty much put you near the top.

I "met" President Carter at the White House and Ronald Reagan at a rally before he became President, but they didn't know me from Adam. THIS story is impressive. My hat is off to you, Markola.

 

[Markola]

^^^^ Thanks! I can take no credit, because it was due to my job and, for him, volunteer service. Of course, had I known where he was going I would have kept in touch!