Latest Inflation Numbers and Discussion

[Winemaker]

Many stores are just dropping items from shelves, Our Walmart no longer carries almond butter, as the DW can not eat peanuts.


Every jobs report in 2023 has been revised downward in later months. However, today's job report, corrected August and September number higher.

My SIL has been out of work since April, and the business went bankrupt. He did CAD drawings for engineering and architectural firms for new buildings and upgrades, but that number has been drastically been cut. For years he worked 10+ hours/day, but had his hours cut last October, then let go in April.

 

[MichaelB]

Given the high level of interest in retail theft and store closings, the posts discussing that were moved to a separate thread which can be found here https://www.early-retirement.org/forums/f27/retail-theft-and-store-closings-119516.html

 

[GenXguy]

Now where is that darn recession the FED is working on creating?

The FED is certainly not working hard enough on that.

 

[braumeister]

A stray thought that occurred to me recently is that sometimes what we automatically ascribe to inflation is actually due to something else.

I was looking at my car insurance bills, which have increased significantly in recent years, and just put it up to inflation due to repair costs.

But then I started looking at my statements more carefully, and noticed the part where they had started using my age as a factor in determining the costs. That made a lot of sense, since I'm definitely in that age range now.

 

[MichaelB]

The FED is certainly not working hard enough on that.

Thank goodness they aren’t. If the going rate of inflation remains below 4% a recession might cause unnecessary economic pain.

 

[JoeWras]

Thank goodness they aren’t. If the going rate of inflation remains below 4% a recession might cause unnecessary economic pain.

So what's the target? 2% or 4%? Fed says it is 2%.

I get your point, but where does the Fed stop for this "recession buffer?"

I want to go on record and say I'm not a fan of persistent 3.9% inflation.

 

[Montecfo]

So what's the target? 2% or 4%? Fed says it is 2%.

I get your point, but where does the Fed stop for this "recession buffer?"

I want to go on record and say I'm not a fan of persistent 3.9% inflation.

I don't think anyone is. But there is no spigot to immediately shutoff inflation. It is a process and one that is working I might add.

 

[MichaelB]

So what's the target? 2% or 4%? Fed says it is 2%.

I get your point, but where does the Fed stop for this "recession buffer?"

I want to go on record and say I'm not a fan of persistent 3.9% inflation.

The Fed is on record that the target is 2%, reaffirmed most recently yesterday by Chicago Fed President Austen Goolsbee yesterday on the OddLots podcast (recommended).

I think no one is a fan of 3.9%. The question is does the Fed need to inflict much greater pain upon the US economy to get it lower or will it get there with the current level of tightening.

Keep in mind that the Fed is also doing QT and higher interest rates are still moving through the economy.

 

[JoeWras]

They have a delicate dance between inflation and recession, that's for sure.

 

[jimbee]

The Fed is on record that the target is 2%, reaffirmed most recently yesterday by Chicago Fed President Austen Goolsbee yesterday on the OddLots podcast (recommended).

I think no one is a fan of 3.9%. The question is does the Fed need to inflict much greater pain upon the US economy to get it lower or will it get there with the current level of tightening.

Keep in mind that the Fed is also doing QT and higher interest rates are still moving through the economy.

MichaelB, you are a model of class and data.

 

[MichaelB]

MichaelB, you are a model of class and data.

Lots of good contributions in this thread by other members as well. It’s really a good thread.

 

[jimbee]

Yes, it is a good thread.

 

[Gumby]

September 2023 Numbers

CPI-U = 307.789

Inflation rate year over year = 3.7%

I-Bond inflation adjustment on November 1, 2023 = 3.94%

CPI-W = 302.257

Social Security COLA for checks received in January 2024 = 3.2%\

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

 

[finnski1]

CPI-U = 307.789

Inflation rate year over year = 3.7%

I-Bond inflation adjustment on November 1, 2023 = 3.94%

CPI-W = 302.257

Social Security COLA for checks received in January 2024 = 3.2%

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

Thank you as usual.

 

[Marc]

CPI-U = 307.789

Inflation rate year over year = 3.7%

I-Bond inflation adjustment on November 1, 2023 = 3.94%

CPI-W = 302.257

Social Security COLA for checks received in January 2024 = 3.2%

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

CPI-W inflation rate year over year = 3.6%

 

[aja8888]

CPI-U = 307.789

Inflation rate year over year = 3.7%

I-Bond inflation adjustment on November 1, 2023 = 3.94%

CPI-W = 302.257

Social Security COLA for checks received in January 2024 = 3.2%

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

Thanks!

 

[Chuckanut]

FWIW in the podcast below Mohamed El-Erian predicts that if the FED will accept 3% inflation a recession probably can be avoided. If they want 2%, not so good. Of course, this is just one man's opinion.

Note1: Skip the first 17 minutes unless you are a NY Jets fan.
Note2: Discussion of the US economy begins at approximately 28 minutes.

https://podcasts.apple.com/us/podca...-r-i-c-s-j-e-t-s/id1539292794?i=1000627079959

 

[JoeWras]

As I'm wont to do, I listen to the CPI report on CNBC (I only have it on radio). Because I don't have it on TV, I don't visit frequently, but know the players well enough.

The analysis was all over the place on this. One of the the pundits, I think Cramer in this case, but it might have been Liesman, keep bringing up the stickiness of "shelter," and how it is so surprising.

To me, it shows they live in the Manhattan bubble. Just because rents there are currently dropping, it means nothing.

I'm going to keep beating the drum of "home repairs." There is no component for "home repairs" in the CPI. It is boiled into OER, which is then boiled into Shelter. Home repairs are a significant cost for any homeowner. And they are constant.

Anyone not living in a fancy NY apartment and who has to go out and get contractors to look at their home repair needs know just how bad the repair cost situation is right now. We don't have "Supers" to handle this messy chore.

My sense is that the rises have finally leveled off. But the incredible rise in home repairs has to still work their way through the numbers. This, along with the intentional built in lag of OER is causing Shelter CPI to play out much longer than just about anyone expected, including myself.

 

[CaptTom]

...To me, it shows they live in the Manhattan bubble...

Exactly. Or the Washington bubble. Or the academia bubble. Or the Finance bubble. Or the bubble of pundits who follow all those bubbles.

I need look no farther than the Social Security COL adjustment posted the other day. Combined with last year, it's, what, around 10%?

I'd be hard pressed to name one thing which costs seniors only 10% more than two years ago. But even if there are exceptions, I'm positive that if you averaged out a typical senior's expenses, they'd have increased 30-40% or so since then. My point: these numbers are a joke, and everyone knows it. They can make all the calculations and pretty charts they want. They're not fooling anyone.

 

[Marc]

December 2022 CPI-U was 296.797 which was lower than the September 2022 CPI-U of 296.808. Therefore, even if the next three months inflation totaled just 0.2%; i.e., 307.789 to 308.669; year over year inflation increases to 4%.

We are in need of some deflation; not just disinflation.

Marc

edited to add: This quite probably is a temporary "problem" as January through March 2023 inflation numbers were high so year over year should come back down.

 

[Gumby]

That's why we shouldn't get into a such a panic about any single month. The long term trend is the most important thing.

 

[milford]

FWIW in the podcast below Mohamed El-Erian predicts that if the FED will accept 3% inflation a recession probably can be avoided. If they want 2%, not so good. Of course, this is just one man's opinion.

Note1: Skip the first 17 minutes unless you are a NY Jets fan.
Note2: Discussion of the US economy begins at approximately 28 minutes.

https://podcasts.apple.com/us/podca...-r-i-c-s-j-e-t-s/id1539292794?i=1000627079959

I think what most people forget is that a recession is part of a normal economic cycle to reset the economy and is actually good for the economy every so often. What is not good is the Fed/Gov't constantly intervening trying to prevent/delay the recession. This only inflates the recession when it occurs causing a larger disruption to the economy.

 

[CaptTom]

I think what most people forget is that a recession is part of a normal economic cycle to reset the economy and is actually good for the economy every so often...

I was actually thinking the same thing. For some reason that seems to be a controversial idea in some circles. I'm no expert, so I wasn't going to be the one to raise it.

But now that it's out there, anyone have any thoughts?

Maybe I'm biased, but it sure feels like what we need right now is a good recession. If it comes with some deflation, so much the better.

There are winners and losers in any economy. Yes, a recession and deflation will hurt some people. But by and large, it'll help those who have been hurt the most by the runaway inflation and income inequality we've seen lately. And hurt those who've benefited from it. I don't feel quite so sorry for them.

 

[pb4uski]

I think what most people forget is that a recession is part of a normal economic cycle to reset the economy and is actually good for the economy every so often. What is not good is the Fed/Gov't constantly intervening trying to prevent/delay the recession. This only inflates the recession when it occurs causing a larger disruption to the economy.

A mild recession would be a small price to pay to reign in inflation.

 

[Winemaker]

I'm going to keep beating the drum of "home repairs." There is no component for "home repairs" in the CPI. It is boiled into OER, which is then boiled into Shelter. Home repairs are a significant cost for any homeowner. And they are constant.

I think the " home repairs", "grass cutting", "tree trimmers" part of the economy is rooted in just plain old greed. My neighbor got quotes to have his tree trimmed; his regular trimmer wasn't answering his phone. Bids went for $2400, $1600, and $1200. A week later, his regular guy called, explained he was getting radiation treatments, and called and said he'd be out and would charge his usual $600.