Latest Inflation Numbers and Discussion

[Gumby]

For your viewing pleasure, here is a graph of the year over year inflation rate - monthly for the past twelve months.

 

[Marc]

For your viewing pleasure, here is a graph of the year over year inflation rate - monthly for the past twelve months.

Doesn't look too bad when you cut off the y-axis.

 

[audreyh1]

Doesn't look too bad when you cut off the y-axis.

Ha ha, but the trend is what’s important.

 

[Gumby]

Doesn't look too bad when you cut off the y-axis.

As long as it is properly labeled, the Y axis can begin wherever is convenient, because, as Audrey notes, the trend is the more important part.

 

[Born2Fish]

For your viewing pleasure, here is a graph of the year over year inflation rate - monthly for the past twelve months.

Gumby - could you change y-axis to "0-9.5%"?

(oops. I posted before seeing the latest responses.)

 

[audreyh1]

CPI Release for Feb 2023

CPI = 300.84

Year over year inflation = 6.035%
Inflation since Jun 2022 annualized = 2.29%
Inflation since Aug 2022 annualized = 3.15%
Inflation since Sep 2022 annualized = 2.71%
Inflation since Jan 2023 annualized = 6.7% raw. With seasonal adjustment = 4.8%

May 2023 I-Bond inflation component if no change next month = 2.71%

https://www.bls.gov/news.release/cpi.nr0.htm

What was the CPI number for August 22, and is there a place to find this online? So far I’ve been saving some of the monthly CPI releases, but I don’t have them all. I don’t know if they are archived somewhere.

 

[Gumby]

Gumby - could you change y-axis to "0-9.5%"?

(oops. I posted before seeing the latest responses.)

No, I can't. I didn't make the graph, I copied it. However, it is correct.

Here is a companion graph of the CPI for that period, which shows the same trend. You will note that is starts at 286 on the y-axis, because that is the most convenient way to show the relevant data.

 

[Marc]

What was the CPI number for August 22, and is there a place to find this online? So far I’ve been saving some of the monthly CPI releases, but I don’t have them all. I don’t know if they are archived somewhere.

https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm

 

[Gumby]

What was the CPI number for August 22, and is there a place to find this online? So far I’ve been saving some of the monthly CPI releases, but I don’t have them all. I don’t know if they are archived somewhere.

They are here:

https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_us_table.htm

 

[yhoomajor]

2% inflation rate is under control (if population/productivity is growing by that much.)

6% inflation is NOT under control. Trying to put some temporary "trend" spin on this is just that.. a spin. Data is data.

https://www.cnbc.com/2023/03/14/cpi-inflation-february-2023-.html

"The consumer price index increased 0.4% for the month, putting the annual inflation rate at 6%, the Labor Department reported Tuesday.

Excluding volatile food and energy prices, core CPI rose 0.5% in February and 5.5% on a 12-month basis. The monthly reading was slightly ahead of the 0.4% estimate, but the annual level was in line."

 

[latexman]

2% inflation rate is under control (if population/productivity is growing by that much.)

6% inflation is NOT under control. Trying to put some temporary "trend" spin on this is just that.. a spin. Data is data.

Excluding volatile food and energy prices, core CPI rose 0.5% in February and 5.5% on a 12-month basis. The monthly reading was slightly ahead of the 0.4% estimate, but the annual level was in line."

Agreed, I haven't excluded/stopped using food and energy. Have you?

 

[Gumby]

Data is data. One's feeling that something is "under control" or not is an opinion, not data. Since 8:37 am this morning, I have presented nothing but data.

 

[yhoomajor]

Data is data. One's feeling that something is "under control" or not is an opinion, not data. Since 8:37 am this morning, I have presented nothing but data.

Per Federal Reserve, inflation rate of 2% is under control. That's the reason they have been increasing interest rates.. to bring it under control, to 2%. Because, 4%,5%,6% or higher is not where they want it to be. Thats not my opinion. Thats where Federal reserve is. I would leave this there. No point in beating a dead horse and arguing over whether 6% inflation is under control or not.

btw Gumby - I appreciate your compilation of inflation data and I look forward to it every month. So please don't take my comments above personally.

 

[pb4uski]

Higher ups have only limited times they can purchase or sell company stock, to avoid any impropriety. And sometimes it is taken too far. A church fellow and former higher up in my mega corp, sold stock every year at a certain week in August to pay college tuition. Our mega corp made an announcement on week before his pre scheduled sale, he then in turn went to the legal department to determine whether he should cancel his sale, as not to be in violation. They gave him the green light, saying that he had set a previous pattern of sales 3 years prior. The SEC tagged him, notified mega corp, and they cleared the matter up to not press charges, provided that he resign.

I don't get it. It sounds like the CEO did everything on the up and up, or at least tried to, and his violation was because he got bad legal advice. I'm surprised that the SEC would come down hard on him for what you described and wonder it there were other things in the mix.

I hope that he at least fired the lawyers in the legal department who gave him bad advice before he resigned.

 

[Montecfo]

6% inflation is not under control.

All the gimmicks of if you exclude food, energy (and new one lately - housing), then inflation is only this can't hide the reality.

No one said it was under control. But the trend is in the right direction.

Excluding some factors isolates others. This is just analysis. It is not trying to pretend other inflation does not exist.

You may want to read some of the releases before you comment.

 

[Montecfo]

2% inflation rate is under control (if population/productivity is growing by that much.)

6% inflation is NOT under control. Trying to put some temporary "trend" spin on this is just that.. a spin. Data is data.

Do you understand the numbers? the ANNUAL number is counting mostly inflation that happened long ago.

The recent trend is what is occurring now. The recent trend numbers since June are in the 2-3% range.

I am not sure why you view a 12 month old number as valid but the same figure more recently is "spin".

This is all just providing context. Nothing to get upset about.

 

[copyright1997reloaded]

Edward Tufte, in his classic book, "The Visual Display of Quantitative Information" had a whole chapter on charts which (can) mislead - including picking axis start/end points.

No comment (by me) regarding the trend, or intent, or anything else...other than this book was an eye opener for me so many years ago: https://www.amazon.com/Visual-Display-Quantitative-Information/dp/1930824130

 

[Gumby]

You could look at a graph of inflation rates like the one from the front page of the NYT today, which goes from 1965 to present on the x-axis and -2% to +15% on the y-axis. In my view, that chart conveys far less useful information about what is happening currently than the one I posted earlier. And what is happening right now is what will drive any Fed actions with respect to interest rates, not what happened in 1965.

 

[MichaelB]

The BLS data was never intended to provide a real time view of inflation. Looking at the rolling 12 month data gives us a greater sense of the trend. It definitely shows CPI is still high, down substantially from its ‘22 peak and definitely in a downtrend. The graph is from BLS here

 

[Gumby]

And, for those who think I may be deliberately soft-pedaling inflation, here is my opinion - the Fed's job is not done yet and they should still raise rates by 50bps at the next meeting.

 

[audreyh1]

And, for those who think I may be deliberately soft-pedaling inflation, here is my opinion - the Fed's job is not done yet and they should still raise rates by 50bps at the next meeting.

It’s encouraging to see consistent improvement, and the Fed prior dramatic raises have yet to fully impact the economy as the reactions are usually delayed. Plus the Fed hasn’t even paused yet. No one said the Fed’s job was done.

 

[pb4uski]

And, for those who think I may be deliberately soft-pedaling inflation, here is my opinion - the Fed's job is not done yet and they should still raise rates by 50bps at the next meeting.

I agree but I think that for political reasons they will only do 25 bps, and that is ok... given what they have already done another 25 bps isn't going to make much of a difference.

 

[MichaelB]

I don’t see any reason to increase more than 25 basis points, and politics has nothing to do with it. Inflationary indicators are softening and much of the economic froth has been cleaned out.

Lost in this latest inflation report is wages, which is of critical important to the Fed. Nominal wages increased 0.2% MoM and 4.6% YoY, and the average hours worked per week declined 0.3% MoM and 0.6% YoY. Real weekly earnings declined 0.4% MoM and 1.9% YoY.

In the Fed inflation model, inflation can only be sustained when there is growth either in wages or credit (or both) Otherwise, consumers must pull back, which contains inflation.

BLS data here and here

 

[Gumby]

To mix some metaphors, my thought is that it is better to rip the bandage off all at once. Go 50bps now and then stop, rather than 25bps with the threat of more at the next meeting hanging over the market like the Sword of Damocles. I see interest rate stability as beneficial to the economy.

 

[Montecfo]

I don’t see any reason to increase more than 25 basis points, and politics has nothing to do with it. Inflationary indicators are softening and much of the economic froth has been cleaned out.

Lost in this latest inflation report is wages, which is of critical important to the Fed. Nominal wages increased 0.2% MoM and 4.6% YoY, and the average hours worked per week declined 0.3% MoM and 0.6% YoY. Real weekly earnings declined 0.4% MoM and 1.9% YoY.

In the Fed inflation model, inflation can only be sustained when there is growth either in wages or credit (or both) Otherwise, consumers must pull back, which contains inflation.

BLS data here and here

Jobs report hit a similar note on wages.