Today's inflation news is all good:
On a monthly basis, core PCE inflation was down to 2.0%, which is the Fed's target rate. Headline inflation was even better, clocking in close to zero.
On a year-over-year basis, headline inflation came in at 3.0% and core inflation at 3.5%.
POSTSCRIPT: Now that inflation is going down instead of up, I notice that neither the New York Times nor the Washington Post even bothers to report it on their front page. Even the Wall Street Journal mentions it only under a headline about consumer spending slowing down. And we wonder why people don't seem to know that inflation is way down?
In a shocking development, PCE inflation came in slightly below CPI inflation
https://fred.stlouisfed.org/graph/fredgraph.png?g=1bXvr
It has rarely done this before, except almost every month (since the two indices are based on the same data, for the same month).
There was actually some real inflation news today, as euro area inflation dropped again, from 4.3% in September to 2.9% in October.
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I’m sure there will soon be a headline “Inflation is down, why this is bad news for Biden”.
Yup. The media want TFG back so bad it is sickening.
Truly inexplicable for that dreadfully liberal media.
100%.
Average consumers are not paying attention to month-over-month inflation these days. They're just upset that a pound of ground beef at the grocery store costs way more than it did in 2019. And the rent is too damn high. What they think the president can/should do about this, and why he's to blame somehow, is part of the grand mystery that is the mind of the fickle and amnesiac American voter. But here we are.
Yep. It seems perfectly normal that people are worried about the function that impacts their lives (prices), not the first derivative (inflation), let alone the second derivative (change in the rate of inflation).
Normal people: “Prices are too high!”
Kevin Drum: “But look: the second derivative of prices is way, way down! Huzzah!”
Clearly both are important.
Considering that price level increases have been matched or exceeded by increases in earnings, it isnt really clear that Americans really care about the 'functions that impact their lives'.
Its also obviously false to say that price levels impact lives but the change in price levels do not. That makes no sense at all.
The massive difference between how people from different parties feel about the economy is a big tell that you might not have this correct.
Obviously, the preznit is supposed to mash the Lower Prices button more frequently and harder. Duh. Literally about half the country or more believes this is one of any president's magic Oval Office powers.
Inflation is down, but the poor still haven't been punished enough.
The mission statement of the Federal Reserve Bank is to pursue "maximum employment, stable prices, and moderate long term interest rates in the U.S. economy."
Given that "maximum employment" and "moderate long term interest rates" move in opposite directions when using interest rates as a tool, the Fed is free to do either one, but not both.
Guess which one they consistently choose to do?
How convenient would it be to have in your mission statement both the idea that you will make lots of money, and will save humanity and the environment, at the same time? And tell people that they should believe it?
Except employment and inflation don't always move in opposite directions. For example, right now we are a t maximum employment and inflation is plummeting.
Just saw a person on the street kind of article where the interviewer asked what they wanted Biden to do and then they would list things that Biden had done. The worst example was a women who lived in a red state who wanted Biden to make abortion legal. When the interviewer told her that is what Biden wants to do she said she just assumed it was Biden who made abortion illegal because it happened in her state while he was President.
My point is at some point we have to start holding people responsible for not knowing what is going on. It really isn't hard.
It used to be amusing when Jay Leno did that bit where he'd go out on the street and ask people stupid questions and see what they thought (or, typically, did not think). The best one was where he stumped a couple of people asking how many moons the earth had.
When people are basing their political opinions/votes on this kind of ignorance, it's much less funny.
"My point is at some point we have to start holding people responsible for not knowing what is going on."
Any idea how to do that?
For example, how would you hold this woman responsible?
I don't know the answer to that, but we should be challenging people. I think we let people off the hook when they say things like politics is divisive. Yes but understanding government isn't. Maybe any time you get into a discussion of with someone you disagree with instead of trying to change their minds you ask them to explain how things work.
I would say that if I was in charge of communicating anything I would say you really can't dumb it down enough and you can't repeat it enough.
"My point is at some point we have to start holding people responsible for not knowing what is going on. It really isn't hard."
Good luck with this. In my experience, it's nearly impossible to hold ignorant people responsible for anything, especially if whatever you want to hold them responsible for doesn't have a cash flow. (Being a better informed citizen doesn't directly increase or decrease anyone's income... and given how many veto points our particular government has, it doesn't usually indirectly increase or decrease anyone's income either. Lots of informed people vote "correctly" for decades for the candidates/political party that supports whatever it is they want to happen, and still see their efforts die in vain thanks to gerrymandering, rural bias in the senate and the filibuster.)
And we wonder why people don't seem to know that inflation is way down?
In other news, there were no riots at the Capitol today.
Here’s where Trump’s shtick works. If Trump was President he would be talking about inflation going down daily and how he is the only one who could make it happen. He would say the fake news won’t report it because they hate him and by extension hate the American people. He would rant and rave and soon we’d be seeing opinion pieces (from “liberal” columnists) saying he has a point. And the next time inflation ticked down it would be front page news.
Trump has the MSM wrapped around his little finger. We need to recognize that.
What he'd do is find a company he didn't like -- like Ford or GM -- and rant and rave against it and threaten to pass legislation punishing them somehow if they didn't lower the prices of their new cars 20% immediately or something. Then they'd want to avoid bad publicity and cave and act all compliant and make some token gesture towards having a sale they were probably going to have anyway and then Trump would take the credit.
He would do this all the time, for example with his Chinese tarriffs. As populist demagoguery, it was pretty effective. Of course if a Democratic president ever attacked private corporations like that, they would immediately be tarred as Leninist revolutionaries.
As an actual solution it was mind-numbingly stupid. TFG never did figure out that a US imposed tariff is paid for by the US importer/buyer before they are allowed to take delivery from the customs warehouse. So he had raised prices on US consumers. If they kept on buying anyway - it was useless in achieving the normally expected behavior.
(And of course, given the big supply chain collapse world wide, expecting normal behavior was probably right out the door.)
Right you are. They think because they've finally chosen to use the word "lie" and will report on some of the most egregious things trump does, they are in the clear.
Personally, I think the main incentive they prioritize is to make elections as close as possible in order to maximize their ad revenue as Election Day approaches.
Yes. That's been obvious for decides.
Funny also how you never hear weather forecasters getting all breathless and excited about nice, calm, sunny days. And nobody stops and stares at normal traffic, or even someone with a flat tire.
(BTW, is it just me, or does almost nobody seem to get flat tires anymore? Like, when I was young, back sometime after we discovered fire, it seems like it was a lot more common.)
Absent hitting some sharp object that punctures it, flat tires are pretty rare these days compared to, say, the 1950s, due to steel-belt radial technology. Originally developed and patented by Michelin in the 40's, they didn't become standard equipment on US cars until the 1970s.
I seem to recall headlines on the Great Trump Economy pointing out how many consecutive months we had with unemployment below 4%. When Biden got to 18 consecutive months -- the first time that's happened in more than 50 years -- we got explanations about how it's a phony statistic.
Back to deflation and the pushing on a string.
Broadly speaking, people don't understand disinflation, including most journalists.
They're demanding deflation under the belief that prices should go back to what they were, several years ago.
Eggs! Don't you understand how expensive EGGS are?
Oh, they're now cheaper than they were five years ago??
I didn't even know the monthly figures were out until I read this story. Astonishingly, you will look in vain for any mention of them in my news aggregator. https://www.memeorandum.com/
I guarantee if inflation had ticked up significantly, it would have been the biggest story there.