Kevin Drum

The Europeans are always ahead of us with their inflation data because they're willing to release "flash" estimates before the month is even over. For September, Eurostat reported annual inflation of 10%, which is bad enough, but that's year-over-year and doesn't capture their recent big increase. If you look instead at the monthly data, inflation for the Euro area hit a stunning 15.8%:

A lot of this increase is due to huge jumps in energy costs, but even core inflation is at 11.9% for September. Inflation is just sky high no matter how you look at it.

As usual with monthly data, though, September could be a fluke. So pay attention to the trendline. The good news is that the trendline shows "only" about 12% overall inflation and 10% core inflation right now. The bad news is that the trendlines are heading steadily up and show no signs of having peaked.

Also, Eurozone inflation is not high just because there are a few outlier countries driving up the average. The annualized September rates are high all over the place. Finland is at +8.7%. Portugal is at +16.7%. Italy is at +22.4%. Germany is at +29.8%. The Netherlands is at +40.9%.

The best performers in September were Ireland and Spain, at 0%, and France, which was down -5.9%. (Though all three still had high year-over-year inflation rates.)

NOTE: The figures for core inflation go back only 12 months because that's all Eurostat provides for core inflation. I have no idea why, but that's Eurostat for you.

In addition to its monthly inflation figures, the BEA also released personal spending data today, and it was as boring as it could possibly be. Adjusted for inflation, disposable personal income went up 0.9% and personal spending went up 1.2% (both of these are month-to-month changes that have been annualized). Here's what this looks like over the past two years:

Over the past two years, per capita disposable income has gone down about $5,000 while personal expenditures have gone up $5,000. We're still making more than we're spending, but not by much.

POSTSCRIPT: If those numbers look high to you, it's because they're means, not medians, so they're skewed upward by the income and expenditures of all the gazillionaires. Normally I'd give you medians instead, but the BEA doesn't report them that way.

Core PCE is the inflation measure the Fed cares the most about but nobody else cares about at all. The LA Times, Washington Post, and New York Times barely even mention it today, while the Wall Street Journal leads with data about consumer expenditures, with PCE inflation playing second fiddle.

But here it gets pride of place this morning. And the news is not great:

Core PCE inflation was up 6.7% compared to last month (in annualized terms). The trendline still suggests it peaked in February, but it's basically been pretty flat all year. And remember—this is core inflation, so it doesn't get pushed around due to changes in energy or food prices. It just measures everything else.

Here is core PCE measured the way most people do, as a percentage change from the same month in the previous year:

This looks a little better: the August reading is 4.9% and appears to have peaked around March.

By chance, the average of PCE core over the past four months is 5.0%, exactly the same as the change over the past year. It's probably safe to say that 5% is roughly where we're at with PCE core inflation right now. That's too high and it's not declining fast enough.

Here's the latest on mortgage rates:

For a while, when rates skyrocket like this, people rush to buy houses before they go up even more. But eventually rates get too high and mortgages simply become unaffordable for many people.

But it takes a while. Back in the bad old days of 1981 mortgage rates rose to nearly 20% and there were still people buying houses. I should know: I rented out a room from a couple who were ponying up that much. Eventually, of course, rates went down and they refinanced at a more reasonable rate.

This was taken at sunset at our local Greek fair a couple of months ago. It was not actually this dark, of course. The enhanced contrast was provided by Photoshop.

Jon Chait says that Republicans are planning once again to hold the economy hostage by refusing to raise the debt ceiling. That could well be. They've done it before and today's Republicans are even crazier than the ones we thought were the ultimate in craziness ten years ago. Chait thinks the answer is for Democrats to end the threat for good:

Democrats need to take one vote to raise the debt ceiling by a quadrillion dollars. Would that vote sound bad in attack ads? Yes. Would it sound worse than a vote to raise the debt ceiling by $500 billion or $1 trillion? Not really. To most voters, any number ending in -illion sounds about as big as any other.

I've always figured there's some reason—I don't know what—that Democrats have never done something like this before. Even $20 trillion or so would solve the problem for a good long time.

As for attack ads, if Democrats do this in November or December, the next attack ads are two years off and probably don't matter. There will be some other shiny object that becomes the center of attention in 2024 and makes the debt ceiling yesterday's news. Probably something about Hunter Biden being the kingpin of the world's largest fentanyl drug ring. Or something.

So sure, give it a try. I guess the real question is whether Chuck Schumer can talk the dynamic duo of Manchin and Sinema into supporting it.

UPDATE: By the way, I'd recommend a yottabillion, not a quadrillion. There's no substantive difference of course, but a quadrillion is still a (barely) recognizable number. A yottabillion, by contrast, is more stars than there are in the universe. It would make it clear just how ridiculous Democrats think the whole debt limit issue is.

Here's a Rorschach test for you:

Stuck on the Streets of San Francisco in a Driverless Car
A reporter and a photographer went for a ride in an experimental autonomous vehicle operated by the General Motors subsidiary Cruise. There were bumps in the road.

You can legitimately read this story two ways:

• Driverless cars are pretty far from being ready for prime time. They're still slow, limited, and can strand you for no good reason.
• Wow! Driverless cars still have glitches, but they do damn well even in a famously crowded city with tough traffic. They're closer than you think.

Read the story and decide for yourself.

"What happened to monkeypox?" asks the Washington Post. Here's the answer in the US:

This is why you hardly hear about monkeypox anymore. It peaked in mid-August and it's been fading away ever since. Right now the infection rate has fallen by more than half from its peak, and in the entire time since June only one person has died from monkeypox (a man who was already severely immunocompromised by HIV).

Part of me wants to say I told you so. Things worked out OK and now the disease is ebbing away. There was no need for panic.

And that's true. On the other hand, although most European countries peaked the same way we did (but earlier), they've since declined far faster than us. Compared to our daily infection rate of 200 per million residents, most European countries have infection rates between 0-50 infections per million residents.

This is not because they had bigger supplies of the vaccine than us. They didn't. We've administered about 800,000 doses (in a population of 330 million) while Europe has administered 330,000 doses (in a population of 450 million). In other words, our vaccination rate is more than 3x their rate.

So even though we're doing OK, I would really like to know why most European countries apparently handled things so much better even though their outbreak was just as bad. It might be a reporting issue. Or it might be a timing issue and we just have to wait a few weeks to get to the European level. I'm not sure and I haven't been able to find a good discussion of all this.

My favorite desert spot for astrophotography is a three-hour drive away, and I'm just not always up for that. I've been meaning to find a compromise spot that's closer to home, so last week I checked out Palomar Mountain.

It turned out to be excellent. It's not quite as dark as the desert, but the extra elevation makes up for a lot of that. As it happens, I ran into a lot of unexpected problems and never got the images I wanted, but I did get a nice cityscape at 3 am, which turns out to be a great time to do cityscape photography. The sky is clear, it's nice and dark, and the lights are fairly low, which allows a long exposure without blowing up the skyline itself.

In this picture, the nearby lights on the right are Escondido. The distant lights on the left are San Diego. The dimmer lights on the far left might be Tijuana, but I'm not sure about that.

Luiz Inácio Lula da Silva is likely to win Brazil's next election:

Lula, as he is widely known, appears poised to win Brazil’s presidential election. The question, polls suggest, isn’t whether he will beat far-right incumbent Jair Bolsonaro, but when. Recent surveys have shown Lula with about 45% of the vote compared with 35% for Bolsonaro, putting Lula within striking distance to win outright by capturing at least half the vote in the first round of balloting Sunday.

When Bolsonaro won the presidency in 2018, it was understood as yet another step in the global march toward right-wing populism and the destruction of democracy. That was fair enough in an era that saw the rise of Donald Trump, Viktor Orbán, Marine Le Pen, and Boris Johnson.

But now it's four years later. Trump is out of office; Le Pen lost to Emmanuel Macron; Johnson resigned in disgrace; and Bolsonaro is about to lose to a socialist. Spain is ruled by a left-wing party. The Labour Party is 15% ahead of the Tories in the latest British polls. Social Democrats are back in power in Germany. In a recent poll, 58% of Americans said the MAGA movement threatens democracy. So where are the headlines telling us that authoritarianism is losing and democracy is back?

Granted, Orbán is still around; far-right leader Giorgia Meloni will probably form a new government in Italy; and Trump remains a force in American politics—though an increasingly spent one. The far-right party in Sweden also gained ground recently, but the conservative and liberal coalitions as a whole only swapped a grand total of two seats. Their new prime minister will be the head of the Moderate Party.

Overall, things are mostly swinging away from the far right even if few want to acknowledge it. But why not? Is it fear that people will stop fighting if they hear that they're winning? That's crazy.

The pendulum is swinging. The always fickle public is blaming the old guys for today's problems and chucking them out. The circle of life is complete.

So keep fighting! Our side is winning!