Three rules for interpreting the CPI print coming in 10 minutes:
1. Don't make too much of one month's number 2. Don't make too much of one month's number 3. Don't make too much of one month's number
By the way, the same rules apply if it comes in lower than expected 1/
Also, of course, this report won't include the effects of the recent drop in oil prices 2/
The big questions won't be resolved today, although we're looking for clues. How much of what's happening is the bullwhip effect, i.e., shortages made worse by panic buying? 3/ bis.org/speeches/sp211…
Are wage/price decisions starting to reflect expectations of future inflation? 4/
Unless you're a reporter obliged to have an instant take, think and analyze before posting! 5/
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Willing to consider this. But I can't find any combination of numbers under which real wages are down enough to justify the extreme gloom consumers are reporting 1/
Still thinking about why Americans are so downbeat about the economy, inspired in part by this Simon Wren-Lewis piece about Britain — where voters say that the Tories are better for the economy, but Labour better for living standards (!) 1/ mainlymacro.blogspot.com/2021/12/they-l…
This seems to jibe with my suggestion that what people mean when they are asked about "the economy" doesn't connect very well to personal experience 2/ nytimes.com/2021/11/09/opi…
We are, after all, experiencing a rapid improvement in employment — actually an awesomely fast recovery in prime-age employment 3/
So Republicans plan to run against inflation, while having zero ideas about how to bring it down 1/ nbcnews.com/politics/polit…
Noticeable that they're still blaming unemployment benefits for reducing labor supply — when this happens to be an experiment we've done, which failed 2/
What the data actually show is that the US, which has done more fiscal stimulus than Europe, also has higher inflation. More careful people than Rattner have cited this as evidence that fiscal did it. But with only 2 data points, need to observe that other things are going on 2/
Europe came in to this with lower inflation than we did — ECB was less successful at achieving a 2% target. This baseline effect accounts for part of the difference 3/
Need to guard against wishful thinking, but there do seem to be straws in the wind suggesting that supply-chain issues are getting less serious. Here's the Baltic Dry Index of shipping costs 1/
Big retailers seem to be doing fine on inventory for the holidays 2/ cnn.com/2021/11/16/inv…
Given the way these things typically work, I wouldn't be surprised if we hit peak inflation panic just as actual inflation is fading away 3/