US January PPI 6.0% y/y vs 5.4% expected and US initial jobless claims 194K versus 200K estimate

[dara777]

@ruella It’s already a scary place

 

[kindergartenqueen]

@ruella Interest rates hikes ain't stopping extreme weather events. Food inflation is at 10-11% and keeps increasing.

 

[joha]

@rund87 I thought Jpow wasn’t afraid of overtightening

 

[glors70]

@rund87 So shouldn't the feds wait a bit to see the full impact of the rate hikes because announcing the next one so soon?

 

[rexhall]

@glors70 Problem is if they wait and they're wrong inflation becomes sticky if not totally out of control. They probably also have PTSD from 2018 where they tried to slow down (with the economy in a much healthier place) only to be under prepared when covid hit in 2020.

 

[rund87]

@glors70 That’s what many are saying. They were too late to the game and are now going full throttle. That’s why the yield curve is pricing in a recession. I don’t think there has been a tightening cycle without a recession. These were supposed to be the smartest economists on earth.

 

[jerib]

@rund87 To be fair a major war affecting major gas and wheat producers started a year ago. That’s hard to predict…

 

[letstrythisagain]

@jerib This started in October 2021, before the war in Ukraine even began.

 

[marco71]

@rund87

How do you know about 7-12 months? Care to explain more about your source?

 

[freebytruthjohn832]

@retiefff CPI inflation, at 6.4%, is now at the same level as it was in Nov 2021.

PPI inflation is at the same level as it was in May 2021.

I don't get why people are denying that there is disinflation. Inflation has been a hot topic for at least an year now and it's unbelievable that people still do not understand inflation, deflation and disinflation.

The rate of increase in inflation is falling and at a fairly good pace. It's not quick enough but it's evidently happening.

Since rates are not going to decrease this year and seeing that inflation really hasn't entrenched (I think so), it should definitely probably come down to 2-3% by end of the year.

Lastly, while deflation is Gen z's wet dream, it's a nightmare for the economy.

 

[tonysq]

@freebytruthjohn832 Cpi at 6.4% on Nov 2021 is a lot different than 6.4% today. The 6.4% today is on top of the 7.5% last year. Vs the 6.4% in Nov 2021, when the nov 2020 inflation rate was 1.2%.

Prices jumped 7.5% last january. snow they jumped 6.4% higher on top of that 7.5%. Compared to prices jumping 1.2% on Nov 2020 then 6.4% on top of that in Nov 2021.

One is not like the other. Overall inflation rate is slowing down. But the inflation we see today is on top of the inflation we saw last year.

E: What makes you firmly believe inflation will reach 2-3% by years end?

 

[gembeldolar]

@tonysq

Cpi at 6.4% on Nov 2021 is a lot different than 6.4% today. The 6.4% today is on top of the 7.5% last year.

The Fed/Treasury loved trodding out the term "base effect" when it helped their argument that inflation was only going to be transitory. Now that the base effect is compounding all this inflation they no longer bring it up.

Base effect went the way of the dodo bird and transitory inflation.

 

[llsilvalopes]

@gembeldolar It was a transitory base effect.

 

[ralfy]

@gembeldolar The transitory thing cracked me up -
Was that Yellen saying it?

 

[confusionofchristianity]

@ralfy Jpow

 

[mynameisjim]

@tonysq

But the inflation we see today is on top of the inflation we saw last year.

I mean... it always is? I don't see what you're saying here. This seems a little like conflating prices with inflation. The YoY this year is better than last year, the fact that it was 7.5% last year is baked into the "on year" part. It's not being hidden or forgotten. Inflation is trending in the right direction even if prices are not declining, because they hardly ever do.

If inflation was 2% last year and 2% this year you wouldn't total that up and say my God it's 4%, we're doing terribly.

 

[bpdavid]

@mynameisjim Im guessing he would like to see some deflation for a year, so that price increases in 2021 woul be corrected a bit.

I dont think its gonna happen. But at least i would like to see 1 or zero percent inflation to beleive that is no longer a boogey man.

 

[freebytruthjohn832]

@tonysq I agree with your points about inflation stacking up. However, there's nothing that can be done, really.

Mathematically, deflation would make sense. Reality doesn't work that way. Deflation would mean that prices of good and services have dropped (majorly) and service deflation would mean a major drop in wages.

People tend to think that we can survive deflation with wage growth. That is just not true. There's no utopia amidst deflation. Goods deflation would mean that either supply has increased massively or people have simply stopped buying things. The latter is something that's terrible for the economy.

What makes you firmly believe inflation will reach 2-3% by years end?

I would not say that firmly but the rate at which inflation is coming down seems higher than the rate at which it was going up. And there are two more 0.25% hikes coming up.

 

[wolfcub44]

@tonysq For one it has to lap and compare against the high inflation prints of the previous year.

 

[dr650adv]

@freebytruthjohn832

Since rates are not going to decrease this year and seeing that inflation really hasn't entrenched (I think so), it should definitely come down to 2-3% by end of the year

RemindMe! 12/31/2023 Read this comment