For what it's worth, here is the most recent set of expected inflation numbers from the Cleveland Fed:
The 5-year/5-year forward inflation measure is currently at 2.2%, which closely matches the Cleveland Fed 5-year estimate. Note that all of these figures are continuing to go down even after January's re-benchmarking and the bad January inflation numbers from both the CPI and PCE.
I hope the Cleveland Fed is correct. Many, so called sophisticated investors hold a different, and much more concerning, point of view about inflation.
https://www.bloomberg.com/news/articles/2022-12-16/federal-reserve-forecasts-higher-inflation-despite-recent-cpi-data
https://www.wsj.com/articles/economic-forecasting-survey-archive-11617814998
A humorous aside:
Isn't it ironic to see this headline by Kevin just above the last one he posted--$20 burger flippers?
My thought on the burger flippers getting $20 an hour is that it does sound outrageous. Except if you buy fast food (as I do once a week or so) and know what it costs to buy a burger these days. That seems outrageous too. Then the wage for burger flippers seems reasonable.
The minimum wage was a big issue in the 2016 election campaign. Dems agreed that hiking the minimum to $15-an-hour* was fair and long overdue. Of course, the federal minimum wage is still stuck at $7.25 an hour. It is so far out of touch with current economic reality it is effectively not a factor and probably won't be again in our lifetimes. We'll just have state minimums going forward as the economies of blue and red states grow increasingly unequal.
* FWIW
Adjusting for inflation:
$15.00 an hour in 2016 = $18.94 an hour in 2023
$15.84 an hour in 2016 = $20.00 an hour in 2023
Got an overlay of the actual?
If the minimum wage had kept up with productivity gains:
https://cepr.net/press-release/26-per-hour-minimum-wage-how-our-economy-broke-the-link-between-minimum-wage-and-productivity/
That’s US$23.00/hr in August of 2021.
If you are rational and running a business, you care about the labor-cost content of the goods and services you sell, not the wage rate per se. When wage increases lag productivity increases, labor-cost content decreases, but someone besides workers is pocketing the gains. Who might that be? (Hint: inequality is way up over the period covered by the chart.)
- meant as a follow-on to Joseph Harbin’s comment on twenty-dollar burger flippers
I don't recall seeing in 2021 or 2022 a post about expected inflation. I thought he was a Core CPI follower (or PCE if those numbers were better).