The headline CPI index in September clocked in 0.41% higher than the previous month, an annualized rate of 5.1%. This is a tick higher than it was in August, though still quite a bit lower than the peaks of earlier this year:
Core CPI, which excludes food and energy, came in at 3.0%. Compared to 12 months ago, the inflation rate for food rose to 4.5%.
As always, this is just one month of data and not something to be panicked over. Nonetheless, it clearly suggests a little more inflationary momentum than we had last month.
Shouldn't one distinguish between inflation on one hand and price increases due to genuine scarcity on the other? I'd bet gas and oil prices alone can explain the uptick of the month.
At any rate here is a more general question: Why are such statistics never published with error bars? The only statistics published for the general public that come with error bars are opinion polls. This strikes me as seriously weird.
All those COVID data for example would be more meaningful if they were accompanied by (properly calculated) margins of error or other statistical data. If that were done more routinely the average news consumer would get the hang of the concept; it isn't awfully difficult to grasp (so long as you don't dive into the details of how to do proper statistical analysis).
After all the unemployment statistics is measured in essentially the same way as opinion polls. I would expect the error margins to be approximately plus or minus one percentage point.
OTOH, Krugs taking a victory lap today on twitter saying core CPI shows inflation transitory.
He does that a lot.
The pressure will remain as long as bottle necks remain. The problem is people are making money off the bottle necks (think Enron).
The Biden admin was able to get some of the ports to go to 24 hr operation--probably not enough for Christmas. Would have been great to have done that earlier--but that really needs low Covid numbers to work well. Not sure if bottlenecks in transport in US can be cleared up soon--apparently railroads have focused on improving margins and cutting capacity.
Expect to hear a bunch of noise about cancelling Christmas when reports of Christmas tree shortages hit the airwaves.
https://www.wcnc.com/article/life/holidays/artificial-christmas-tree-shortage-price-increase-2021-holiday-season/275-963dcfdb-f2b4-4dad-b996-32b14f6e84e3
There are plenty of trees. Your post is already out of date.
Social Security is a broad program benefiting 70 million Americans. The cost of living adjustments (COLA) has averaged about 1.5% for the last twenty years: this year's COLA will be 5.9%
https://www.usatoday.com/story/money/2021/10/13/2022-social-security-cola-benefits-rise-5-9-amid-inflation-surge/8424187002/
Ever wondered what "special pleading" looks like?
Here's Kevin on inflation this year:
May 12, 2021
As expected, the headline inflation rate rose 4.2% in April. MY BEST GUESS FOR THE REAL RATE of inflation, based on ignoring the artificial drop a year ago, is 266.832 ÷ 259, or about 3%:
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July 8, 2021
The first thing to notice is the enormous inflation in used cars. All by itself, this category boosts the overall inflation rate by about 1.5 points. If you're in the market for a used car this is bad news, but FOR THE REST OF US IT MEANS the overall inflation rate is closer to 3.5% than the official rate of 5%.
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July 12, 2021
The endless preoccupation of the US news industry with inflation is truly spectacular. They will simply take any opportunity, no matter how trivial, to hoist the red flag of high inflation right around the corner.
I'm not even saying the stuff in this particular piece is wrong. Rather, IT'S ANCIENT. IT'S A BUNCH OF TRENDS THAT INFLATION HAWKS HAVE BEEN WARNING ABOUT FOR YEARS.
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July 13, 2021
[Re 5.3% increase in CPI]
That's pretty high! However, IF YOU USE KEVIN'S HANDY INFLATION CALCULATOR, WHICH ADJUSTS FOR BASE EFFECTS (that's the dip in mid-2020) the real-world rate is more like 4.4%. And if you eliminate the distortion of used cars, the inflation rate for everything else is probably less than 3%.
I know, I know, that's a lot of adjustments. Take 'em for what they're worth. THE ONLY ADJUSTMENT THAT REALLY MATTERS IS TO GO FORWARD IN TIME and see if inflation settles down once the economy adjusts to its grand reopening. But that's one adjustment we're just going to have to wait for.
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August 11, 2021
Inflation in July remained high at 5.4%, LARGELY DUE TO HUGE INCREASES IN THE COST OF GASOLINE AND USED CARS. However, the increase from the previous month was MUCH LOWER THAN IN JUNE:
The inflation rate for food remained pretty reasonable at 2.6%. Whatever people may say, A TRIP TO THE SUPERMARKET JUST ISN'T A LOT MORE EXPENSIVE than it was a year ago.
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August 27, 2021
The New York Times says inflation rose "sharply" last month using the Fed's preferred measure, and I suppose that's true. But AS USUAL, CONTEXT IS EVERYTHING:
Core PCE inflation peaked in April and has been dropping ever since. So while it's still high by historical standards, IT'S PLUMMETED TO HALF OF WHAT IT WAS JUST A FEW MONTHS AGO. This suggests that the momentum behind high inflation is starting to ease.
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September 14, 2021
The headline CPI index in August clocked in 0.27% higher than the previous month, an annualized rate of 3.3%. THIS IS QUITE A BIT LOWER THAN THE 9%, 7%, 10%, AND 5% RATES OF APRIL THROUGH JULY.
Core CPI, which excludes food and energy, came in at 1.2%. Since the headline number usually follows the core number, this SUGGESTS THAT INFLATION IS LIKELY TO HEAD EVEN LOWER over the next few months.
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October 13, 2021
The headline CPI index in September clocked in 0.41% higher than the previous month, an annualized rate of 5.1%. This is a tick higher than it was in August, though still QUITE A BIT LOWER THAN THE PEAKS OF EARLIER THIS YEAR:
Core CPI, which excludes food and energy, came in at 3.0%. Compared to 12 months ago, the inflation rate for food rose to 4.5%.
As always, THIS IS JUST ONE MONTH OF DATA AND NOT SOMETHING TO BE PANICKED OVER.
Narratives can be persistent…
So when one says the real test will be whether inflation settles down over the next few months, and then it does settle down, and one notes that, is that special pleading?
Yes, because "settling down" is forward-looking and ignores the year as a whole, which is 5,9% (the Social Security COLA for next year).
5.9% is big.
Throughout this year Kevin said inflation is only for X or Y, or not as bad as previous months (!), or will settle down - without acknowledging that inflation for the year is substantially up and affecting a lot of people. That's special pleading.
I read Kevin's posts much differently. But it seems all right to me if an observer continues to add qualifications to repeated regular headline events that emphasize temporarily distorted figures. And inflation in the past two months has been lower than in an extraordinary few months earlier in the year. Why does that observation rate an exclamation mark? No one's saying we should stop watching what happens, but what's happened so far doesn't look like it's running away.
Was inflation 5.9% over some 12-month interval? Maybe. But if real events and past collected data indicate that it won't be that high next year, it's not very illuminating to simply say it's 5.9%, and that's high, and let the doomsayers prevail.
How is it affecting people? You could hear lots of anecdotes. Mine is that it cost me more than I hoped to get a used car this year, but if a loaf of bread costs 25 cents more, that's not changing my life.
@Dana Decker:
Only because today's post was fresh in my mind, I noticed that you left out the sentence immediately following "THIS IS JUST ONE MONTH OF DATA AND NOT SOMETHING TO BE PANICKED OVER." I'm not going to review all the posts you are quoting, but it looks to me as if you're doing a little special pleading of your own.
Yeah, seems that way.
Kevin, how many months must pass before the “blip” is “for real?”
It was real. A real blip, which is now over. Now it's a gentler rise, which is also real, but not as alarming.
I gotta laugh at everyone running around claiming the sky is falling. At the beginning of the year a lot of people talked about how we'd probably see a year or so of higher inflation. Lots of numbers were mentioned and the actual numbers of 5%-6% are basically what was promised. It is funny that so many people are saying that because the numbers have been high for more than a couple of months it means that... I don't know. I guess that we are irresponsible unless we crash the economy or something.
The supply chain problems mean we'll eventually see a little higher inflation than expected, and it will probably last a little longer. That is what happens when you have disruptions this big.
Call joebiden Li'l Wayne, 'cause he's Tha Carter: II.