Down slightly, in August, for Michigan and Survey of Professional Forecasters.
Figure 1 [updated 8/26]: CPI inflation year-on-year (black), median expected from Survey of Professional Forecasters (blue +), median expected from Michigan Survey of Consumers FINAL (red), median from NY Fed Survey of Consumer Expectations (light green), forecast from Cleveland Fed (pink), mean from Coibion-Gorodnichenko firm expectations survey [light blue squares], all in %. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, University of Michigan via FRED and Investing.com, Philadelphia Fed Survey of Professional Forecasters, NY Fed, Cleveland Fed and Coibion and Gorodnichenko, and NBER.
@ Menzie, Who you gonna believe?? The FOMC members who want .75bps hike or your lying eyes??
Biden’s stimulus from student loan cancellation might of been a inflation pivot (change of direction)
@ Soph
I tend to think they were separate issues for Biden in his mind. But what you said is a reasonable theory and plausible. I was happy to see Susan Rice was kind of the “point man” on the announcement, and that was discussed.
https://www.c-span.org/video/?522473-1/white-house-briefs-student-loan-debt-forgiveness-plan
Either way in my personal opinion it was a good move. And should be mentioned voluminously in TV campaign ads (targeting college age and high schoolers) when trying to get college youngsters to show up November 8 to vote.
Contrary to popular belief, I have been lobbying for more female voices here on Professor Chinn’s and Professor Hamilton’s blog. “Soph”, (unless that’s short for Sophocles, heh) strikes me as a more feminine name. If so I hope you will make more comments here on the blog, contrary to the vibe you might possibly get from the comments section, most of us do not bite.
Moses,
Could be short for “Sophomore” or less likely “Sophist,” neither of them obviously female particularly.
I mean honest to God I don’t know why we don’t have more female commenters here. I suppose certain parties here will say it’s because I scared them all away by making fun of Nancy Pelosi and Claudia Sahm er something.
Hello people of the confusing gender (no I am not talking about “they” “them” people right now). I promise I will be nice. We know you are reading. Olly Olly Oxen Free, come out, come out wherever you are. Show me what a shallow boyish man I am, I promise I’ll take punches to the gut, preferably not lower than the waist though.
“take punches” to the gut means “receive punches” to the gut and only give half punch back…… forgive the old white guy for not being more clear.
Claudia Sahm? I thought you like her. Plenty of others on your bad list, certainly more so than she appears to be.
“Overall, the combination of higher savings and lower debt could drive inflation up by 0.1 to 0.3 percentage points, according to Michael Pugliese, an economist at Wells Fargo & Co. Bloomberg Economics sees the potential to add as much 0.2 percentage points next year, with risk to the upside. Headline inflation last month, as measured by the consumer price index, was 8.5%, near a 40-year high. ‘In the grand scheme of things, that’s not huge,’ Pugliese said of the fresh pressures, adding that there are outstanding details that will still influence his estimate. ‘But inflation right now is at pretty alarming rates. At a time when the economy is already running too hot, it just threatens putting more fuel on the fire.’ “
…….. farther down the same article
“The effects of the relief will be felt widely. Of the 43 million federal student loan borrowers eligible to benefit, about 20 million will have their debt completely eliminated, according to White House estimates, with 90% of help going to those who earn less than $75,000 a year.”
…….. and again farther down the same article
” ‘It’s actually not hugely inflationary,’ said Akers, a former staff economist in the Council of Economic Advisers under George W. Bush. ‘This will increase the inflationary pressure, but it’s still not a game changer in terms of the inflation debate.’
The Committee for a Responsible Federal Budget, a fiscally conservative group that lobbies for deficit reduction, also flagged that the debt relief could undermine the IRA’s disinflationary impact. It said Biden’s plan will likely cost up to $600 billion, and could add 0.15 percentage points to the Federal Reserve’s preferred inflation gauge upfront, with additional pressure over time.”
Swiped from Olivia Rockeman, Katia Dmitrieva, and Alexandre Tanzi at Bloomberg:
https://www.bloomberg.com/news/articles/2022-08-24/biden-s-student-loan-relief-adds-new-wrinkle-to-inflation-debate
There’s some other good quotes towards the bottom of the article, saying that due to higher household wealth, the spending is apt to stretch out more into the longterm future, and LESS of an immediate impact on spending.
https://news.cgtn.com/news/2022-08-24/Chinese-mainland-records-413-new-confirmed-COVID-19-cases-1cKDLrQZnig/index.html
August 24, 2022
Chinese mainland records 413 new confirmed COVID-19 cases
The Chinese mainland recorded 413 confirmed COVID-19 cases on Tuesday, with 380 attributed to local transmissions and 33 from overseas, data from the National Health Commission showed on Wednesday.
A total of 1,331 asymptomatic cases were also recorded on Tuesday, and 22,146 asymptomatic patients remain under medical observation.
The cumulative number of confirmed cases on the Chinese mainland is 240,646, with the death toll from COVID-19 standing at 5,226.
Chinese mainland new locally transmitted cases
https://news.cgtn.com/news/2022-08-24/Chinese-mainland-records-413-new-confirmed-COVID-19-cases-1cKDLrQZnig/img/c81b831284ae40f89031ad19cc08ab22/c81b831284ae40f89031ad19cc08ab22.jpeg
Chinese mainland new imported cases
https://news.cgtn.com/news/2022-08-24/Chinese-mainland-records-413-new-confirmed-COVID-19-cases-1cKDLrQZnig/img/8dc19fa057cf4171883e14e990c5b2a5/8dc19fa057cf4171883e14e990c5b2a5.jpeg
Chinese mainland new asymptomatic cases
https://news.cgtn.com/news/2022-08-24/Chinese-mainland-records-413-new-confirmed-COVID-19-cases-1cKDLrQZnig/img/d4c36ccc72814e28a62f9e4c584e9d7c/d4c36ccc72814e28a62f9e4c584e9d7c.jpeg
https://www.worldometers.info/coronavirus/
August 23, 2022
Coronavirus
United States
Cases ( 95,537,994)
Deaths ( 1,066,416)
Deaths per million ( 3,208)
China
Cases ( 240,233)
Deaths ( 5,226)
Deaths per million ( 4)
And, folks, since you have been informed of this factoid you have never seen before, that deaths per million from Covid in China are 4 per million, let me tell you about this other factoid I also know you have never seen before, namely that while the US has received 400 Nobel Prizes, China has received zero.
I think Liu Xiaobo counts as a lifetime Chinese citizen and resident. Unless you and BlueStatesResidentKopits are going to insist he’s Hungarian.
Moses,
Yeah, he is one. I just googled “Nobel Prize winners by country” and used their numbers, which clearly mistakenly missed him at least. Maybe there are some others, and maybe the US has only 399. I have not gone in to specifically count them all myself.
Do not crash the party. Please behave properly.
& here’s why China and ltr have been right about dealing with Covid, and why the US response will leave us a third world country:
https://www.brookings.edu/research/new-data-shows-long-covid-is-keeping-as-many-as-4-million-people-out-of-work/
(that’s a new report out today)
RJS,
Thank you so much.
[ https://www.brookings.edu/research/new-data-shows-long-covid-is-keeping-as-many-as-4-million-people-out-of-work/
August 24, 2022
New data shows long Covid is keeping as many as 4 million people out of work
By Katie Bach ]
It’s too bad President Obama or President Biden (or even a Prez Bernie) weren’t in office when it initially hit. Things might have been different.
I’m not sure if I agree with holding up China as the paragon of pandemic policy (say that 5 times really fast) on the basis that is where the virus originated, amongst other poor choices by Xi Jinping. Much less suffering in both countries could have been achieved and each country largely only has itself to blame.
It’s ironic to me we hear the tired lecturing of old white Republicans saying “back in the golden days, Americans were held accountable for their actions”. Now all those same old white Republicans want to blame bad domestic policy (or lack of any pandemic policy at all under MAGA) on a country 1584 miles away across an ocean.
That assumes China’s quarantine effort will prevent, rather than delay, infection. Given the virulence of Omicron, that’s not clear. If it turns out that pretty much everyone will contract Covid, then vaccines which reduce severity and reduce the occurrence of long-haul symptoms are the best current defense against Covid.
Another factoid that points to what is ahead of China as their zero Covid policies slowly sinks under the pressures of highly infectious variants
China death rates: 1 per 46 diagnosed cases
US death rates: 1 per 90 diagnosed cases
Australia death rates: 1 per 742 diagnosed cases
China
Before 2022: 1 death per 22 diagnosed cases
In 2022: 1 death per 231 diagnosed cases
US
Before 2022: 1 death per 66 diagnosed cases
In 2022: 1 death per 182 diagnosed cases
Australia
Before 2022: 1 death per 169 diagnosed cases
In 2022: 1 death per 866 diagnosed cases
https://www.nytimes.com/2022/08/25/opinion/long-covid-pandemic.html
August 25, 2022
Caitlin
Delaware
My life changed after October 2020. I have made some improvement but the memory loss, fatigue, brain fog, and migraines still plague me. I am a physician. My career is in shambles and I don’t know if I’ll work full time again. I’ve got credit card debt from the time when I wasn’t working at all. My savings are depleted. My retirement funds are neglected. My student debt is enormous. I have begun to lose hope. I hold it together as best I can for the sake of my kids, but my bright future burned to ashes. I am 39 years old.
Zeynep Tufekci
@Caitlin I’m so, so sorry. I talked to many people like you. It’s like the rug under their life was pulled, suddenly, without warning and often during the peak of their youth and health. At a minimum there should be immediate financial and medical support provided to the sufferers like you, while the research gets accelerated for treatment, hopefully to be found sooner rather than later. I am sorry again, and I hope to keep writing about this issue. One terrible reality is that people with this condition are too debilitated to carry out the kind of active lobbying and push we need.
https://www.nytimes.com/2022/08/25/opinion/long-covid-pandemic.html
August 25, 2022
If You’re Suffering After Being Sick With Covid, It’s Not Just in Your Head
By Zeynep Tufekci
When the influenza pandemic of 1918-19 ended, misery continued.
Many who survived became enervated and depressed. They developed tremors and nervous complications. Similar waves of illness had followed the 1889 pandemic, with one report noting thousands “in debt and unable to work” and another describing people left “pale, listless and full of fears.”
The scientists Oliver Sacks and Joel Vilensky warned in 2005 that a future pandemic could bring waves of illness in its aftermath, noting “a recurring association, since the time of Hippocrates, between influenza epidemics and encephalitis-like diseases” in their wakes.
Then came the Covid-19 pandemic, the worst viral outbreak in a century, and when sufferers complained of serious symptoms that came after they had recovered from their initial illness, they were often told it was all in their head or unrelated to their earlier infection.
It wasn’t until the end of the first year of the pandemic that Congress provided $1.2 billion for the National Institutes of Health, which led to a long Covid research initiative called Recover, in February 2021. A year and a half later, there are few treatments and lengthy delays to get into the small number of long Covid clinics. Frontline medical workers don’t have the clinical guidelines they need, and some are still dismissive about the condition.
Long Covid sufferers who caught the virus early have entered their third year with the condition. Many told me they have lost not just their health but also their jobs and health insurance. They’re running out of savings, treatment options and hope.
To add to their misery — despite centuries of evidence that viral infections can lead later to terrible debilitating conditions — their travails are often dismissed as fantasy or as unworthy of serious concern….
Zeynep Tufekci is a professor at Columbia University.
https://www.nytimes.com/2022/08/24/business/inflation-demand-prices-us.html
August 24, 2022
Consumer Demand Has Been Key Driver of Inflation in the U.S.
Research has found that Americans’ spending during the pandemic accounted for about 60% of inflation from 2019-21.
By Ana Swanson
Supply chain bottlenecks and labor shortages have been a major factor driving inflation in the United States, though surging consumer demand ultimately did more to drive up prices in the last two years, according to researchers at the Federal Reserve Bank of New York, the University of Maryland and Harvard University.
In a blog post * on Wednesday, Julian di Giovanni, the head of climate risk studies in the New York Fed’s Research and Statistics Group, summarized findings from a paper presented in June that found higher consumer demand for all types of products during the pandemic was responsible for roughly 60 percent of the inflation in the United States between 2019 and 2021.
Supply shocks — which include shortages of workers, raw materials and shipping containers needed to produce and move goods globally — accounted for the remaining 40 percent of inflation in the model, with 58 of 66 industrial sectors that the research identified experiencing supply constraints.
The researchers concluded that, without supply bottlenecks, inflation in the United States would have been 6 percent at the end of 2021, instead of 9 percent. The research finds that demand shocks played a larger role in explaining inflation in the United States, whereas supply chain bottlenecks have done more to fuel inflation in Europe.
“The bottom line of this decomposition is that supply constraints magnified the impact of higher demand in inflation,” Mr. di Giovanni wrote….
* https://libertystreeteconomics.newyorkfed.org/2022/08/how-much-did-supply-constraints-boost-u-s-inflation/
https://www.ecb.europa.eu/pub/conferences/ecbforum/shared/pdf/2022/Kalemli-Oezcan_paper.pdf
June, 2022
Global Supply Chain Pressures, International Trade, and Inflation
By Julian di Giovanni, Şebnem Kalemli-Özcan, Alvaro Silva and Muhammed A. Yıldırım
Abstract
We study the effects of the Covid-19 pandemic on the Euro Area inflation in comparison to other countries such as the United States over the two-year period 2020-21. Our model-based calibration exercises deliver four key results: 1) Compositional effects – the switch from services to goods consumption – are amplified through global input-output linkages, affecting both trade and inflation. 2) International trade did not respond to changes in GDP as strongly as it did during the 2008-09 crisis despite strong demand for goods. These lower trade elasticities in part reflect supply chain bottlenecks. 3) Inflation can be higher under sector-specific labor shortages relative to a scenario with no such supply shocks. 4) Foreign shocks and global supply chain bottlenecks played an outsized role relative to domestic aggregate demand shocks in explaining Euro Area inflation over 2020-21. These four results imply that policies aimed at stimulating aggregate demand would not have produced as high an inflation as the one observed in the data without the negative sectoral supply shocks.
So anne,
I don’t get it. Get the China thing. That was always your bailiwick at Economist View. But back then you and Paine were awesome and had so much insight into economic issues. Truly miss that and that you and Paine.
Anyway, thanks I learned a lot.
dd
So anne,
I don’t get it. Get the China thing. That was always your bailiwick at Economist View. But back then you and Paine were awesome and had so much insight into economic issues. Truly miss that and that you and Paine.
Anyway, thanks I learned a lot. No need to reply.
dd
Off topic, China’s real estate troubles –
China has reportedly demolished or delayed construction on 3 billion square meters of construction in recent years, to avoid depressing housing prices while keeping construction-in-progress elevated as a prop to growth and employment. That 3 billion square meters is enough to house roughly 75 million people.
https://finance.yahoo.com/news/china-tears-down-tower-blocks-122948254.html
Guys, send it over here!
Anyhow, this is evidence that Chinese officials knew they were riding a tiger. At some point, you end up getting off the tiger.
It’s been awhile now since I been there, and although they have changed pretty drastically in some aspects, this part hasn’t changed much. One wonders how they got it inside their head that gargantuan amounts of concrete and noncentral heat, noncentral AC garners great efficiency returns to society. Most of my life (other than maybe my hands when I am outside for extended periods) I’ve been very tolerant to cold temps. And I remember many of my Chinese colleagues complaining that the radiators in their apartment homes weren’t ever turned on until late November. It didn’t bother me a whole lot, other than wondering how much heat they thought they were getting with poorly performing radiators located right by their air leaking windows. I soon learned (I don’t know, 3 months???, into living over there) that it was better not to ask these type questions, as you would get these very inquisitive expressions on faces of people holding their Master’s degrees, look at you like the Ewoks looked at C-3PO.
This is apart from the time, the department secretary asked a “maintenance man” to fix my shower, whereby he stood directly under the shower head fully clothed and seemingly drowned himself as he checked the water pressure. Not the method I would have used to check how operational the shower was. but you know those crazy Laowai.
This sort of thing characterized the former Soviet Union, heat not getting turned on until a pretty late date.
@ Barkley Rosser
HERE is the type story you should be bringing us, instead of your Elvira Nabiullina “got fired” garbage:
https://www.cbsnews.com/news/daria-dugina-car-explosion-killed-russia-daughter-alexander-dugin/
So let’s use our brains here a little bit (your brain needs a run around the park, even a small park). How sophisticated is Ukraine’s spy/espionage apparatus?? I have no idea, but some of Ukraine’s lack of sophistication (generally) point to the answer: “not a very good spy/espionage apparatus”.
So who killed Daria Dugina?? The strong implication is “intra-Russian” parties—-opponents of Putin. This could be a very strong signal or warning shot for Putin. This story deserves more attention. Bring us stories like these Junior, and less of the stuff your in-laws blew into a Kleenex. You can do that, right?
Moses,
I am not reporting on that one because there are way too many theories with no way to figure out which of them are true. I have indeed heard more than is in the news, but, frankly, I have not been reporting a lot of rumors our Russia because of your worthless and irresponsible conduct. If I report a rumor, you decide I have reported it as a fact. If it then turns out not to be true, then you denounce me for having reported it, and when I remind that I reported it as a rumor, then you get on my case for not being man enough and taking stands on what is true and what is not.
Indeed, this is an important story, and I happen to know way more about it than is appearing in the media or that you are ever going to hear about. But I am not going to report a shred of it here bevcause OF YOUR CONDUCT.
To anybody here who actually would have liked to learn what I know you do not, I apologize, bu tit is clearly Moses’s fault. Just look at how he has behaved with this Naibiullina matter, which he has the nerve to even bring up here now.
@ Rosser Junior
I know…… I know…… It gets more complicated when the in-laws aren’t spoon-feeding you last night’s Россия-1 news broadcast. Don’t worry, I’ll keep the blog posted. I can even moderate/correct your “no Russian invasion of Ukraine” “Elvira Nabiullina got fired today” fake news.
If Rosser keeps his word ( iffy at best) and has finally realized it makes him look inept (and not an “expert on Russia”) to just toss stuff up online, count yourself ahead. The CBS News link will give you a deeper and more accurate picture of the Daria Dugina story than any garbage Rosser is “concealing”. The abbreviated version is that the car that had the bomb planted in it was Alexander Dugin’s usual car, and he switched cars at the last minute. It strikes me as plausible.
*Alexander Dugina
Damnded durnded blasted enfeebling furner names.
Moses,
He is “Aleksandr Dugin.” She was “Daria Dugina.” In Russian, women have an “a” added to their last names (usually) whereas men do not.
So, no, he is not “Alexander Dugina.”
@ Professor Rosser
Aw, OK, see, this may be the first time I learned something from you. I stand corrected. No jokes, I appreciate this factoid and will try to remember this in future.
Moses Herzog: Personally, I actually learn a lot from Professor Rosser’s comments, especially in those areas in which I have less knowledge, and even when those items are labeled as “rumors”.
Actually, I shall note just one thing, although this is something that has been reported in the western media, so many of you have probably seen it, maybe even including super wise and well-informed Moses. It is that the car Dugina was in belonged to her dad, Aleksandr Dugin, about whom I have made comments here in the past on several occiasions. It has also been reported that it was only at the last minute that he decided not to ride in it and left it to his daughter to drive by herself.
So, one thing that is pretty clear is that whoever it was who did this, and there is a pretty long list of suspects, they were targeting him, not her. Oh, I did hear a rumor I have not seen confirmed in the western media that since the big memorial he had a nervous breakdown and has been hospitalized. I seriously dislike the guy, but as a father I definitely understand that if somehow I ended up having a daughter blown up because I decided to let her dreive my car and I stayed out of it at the last minute, I would be completely crushed.
So there, folks, a little bit out of the Moscow rumor mills, which have a whole lot more.
“But I am not going to report a shred of it here bevcause [SIC] OF YOUR CONDUCT.”
“If Rosser keeps his word ( iffy at best)”
“Actually, I shall note just one thing, although this is something that has been reported in the western media”
Didn’t even take an 8 hour workday to be right on that one. The least Barkley Junior could do is not parrot my CBS link in the same thread made 4 hours before.
When people have an ego completely out of proportion with their own set of talents, you don’t need tea leaves or tarot cards to foresee exactly what they will do.
Um, Moses, the report about it being Dugin’s car not his daughter’s was in many locations, not just CBS News, and I posted it here, noting that it was in a lot of western media before you posted your comment based on CBS News.
Moses,
Anyway, you have made it clear that you consider yourself to be a much greater expert than I am on matters involving Russia. You know far better than anything I might report from obviously unreliable Russian language sources. And you seem to be engaging in all sorts of clearly brilliant and well-informed analysis here on this matter. So, I am sure everybody here will be grateful to you to resolve the situation without any misguided clutterous rumors coming from me.
No, I do not consider myself an “expert”. That is a word only you have used as a self-descriptor related to this topic. One needn’t be an “expert on Russia” to make a fool of someone who quotes Russian State media like it’s “Christian Science Monitor” or “ProPublica”. Really probably to beat such a person would require only a 7th Grade education at best.
Here’s a wild idea. Just don’t label yourself an “expert on Russia” and we can all move on to reality. Sure “AndrewG” will be crushed his hero can’t fly over the Empire State building in a single bound, but hey, I’m think of soon telling “AndrewG” that Santa doesn’t exist, so let’s just rip off the band-aid.
Moses,
Now now, of course you are a much greater expert on Russia than I am. That I have published items with hundreds of citations on Russia and its economy and personally know most of the top Russian economists, of course this is a sign that I am a hopeless know nothing on the topic.
You, on the other hand, clearly have more security clearances than Anonymous and CoRev ever had put together. This explains your super secrecy about your current employment, as well as your ability to believe US intel when it accurately predicts that Putin will make a full-scale invasion of Ukraine, which I failed to do in my utter lack of expertise. As it is, the number of people you were wiser and more expert on this than is really quite large.
So WaPo is continuing its major front page series on the beginning of the war, today’s article being “Battle for Kyiv: Valor vs. Hubris” by Paul Sonne, Isabelle Khurshudyan, Serhei Morgunov, and Kostiantyn Khudov. It begins on the front page recounting the experience of the first Ukrainian wounded as the invasion began at 4:35 AM on February 24, an off-duty border guard on the Ukraine-Belarus border, named Viktor Derevyanko. On the front page it reports the following:
“Hours earlier, Derevyanko and the other Ukrainian guards had been joking dismissively about President Biden yet again warning of a Russian invasion. Now they were its first target.”
So, see, Moses? You were much more expert than these frontline on the ground Ukrainians, fools that they were. And the article goes on to confirm that indeed almost no European leaders believed Biden either, only UK’s Boris Johnson. The disbelief extended to Ukrainian President Zelensky and his inner circle, including Defense Minister Reznikov. The article quotes for the firs time top Ukrainian commanders, who also thought Putin was more likely to invade Donbas, my view as well. But, fortunately they listened enough to US intel people to make a few last minute moves “just in case” that proved important, perhaps most importantly moving airplanes and some air defense assets from their usual locations just a few days before the invasion. At least somebody was as wise as you, Moses!
Of course, the article also told of how in the first days of the invasion, virtually every other world leader urged Zelensky to leave Kyiv as they all forecast the Russians would win quickly. This led the US to move its embassy to Lviv, something you so wisely supported along with all those wise world leaders, Moses, while I agreed with President Zelensky that it should not move and that the Russians might actually fail to take Kyiv.
But, Moses, you knew best, with your multiple secret clearances that must remain secret, not to mention your keen ability to watch CBS News. We can count on you to tell us what is true and what is not in Russia Ukraine for sure. I mean, without you, how else would we have ever known about those very important Russian troops in southeastern Romania?!
@ Barkley “My PhD is useless for ME” Rosser
I think I know (and have read three days before) the WaPo article you refer to. Would it kill you to put the link up?? Geez, just ask the janitor on the floor of your office to do a copy/paste. Geezuz H Jehoshaphat!!!! Are you just one of those narcissists who acts like a d*ck 24/7 just to test the reaction??
Shall I cherry pick other parts of the article?? Like Zelensky asking for more U.S. weapons from America to defend Ukraine while he heard crickets?? Like backdoor meetings of European officials taking the potential war very serious, while giving public statements to calm regular citizens?? It’s very boring, but give the word and I will copy/post verbatim those parts of the article. F*ck you are dumb. I had 19 year old students in China, with maturity of 16 year old who could “sight read” English and whose English reading comprehension was/is better than you. From the village areas. WOW.
Here’s a breakdown on the heating issue (like anyone cares but me).
https://www.thebeijinger.com/blog/2020/10/20/baby-its-coldin-here-understanding-chinas-central-heating-system-divide
https://borgenproject.org/winter-in-asia-chinas-heating-crisis/
It’s also kind of a north-south deal. North it’s more a heating problem, south it’s more a cooling problem.
Chinas property market is actually not a housing market it’s a savings bank. Because of a deficient social system and the previous one child policies, people really need/want to save money “for a rainy day”. The economy is strong enough to give them incomes above the hand-to-mouth level – so a lot of them have money to save. The one place they trust to put their saved money, is buying an apartment. So the housing construction and prices were driven way up beyond what was needed for housing, and also beyond what was sustainable. Housing and related items are over 30% of their GDP. Letting the housing market crash would be like letting our banking system crash, just a lot worse.
They clearly need to get housing under control to avoid an uncontrollable crash. Yet it is extremely difficult to put the brakes on a frenzy without risking a sudden panic. That is the harsh dilemma facing Xi. Any thing he does to slow down the housing market will reveal the house of cards that is a mercantile economy with a housing bubble being 30% of GDP. Yet, if he just let it continue, the eventual blow-up will be that much worse. Not easy being a dictator – who are you going to blame?
Well, it’s both a housing and a saving issue. Bt the savng issue is a much-neglected causal factr in the distortion of housing which has ledto distortion in the economy and a large bad-debt problem.
The housing issue is that there are millions of households intending to improve their living conditions once their new abode is complete. They have been screwed by speculative/saving buyers, a system which caters to those buyers and a governmwnt which uses housing as an economic management tool on steroids.
Sounds like Singapore, except on an enormous scale, and this sounds more like containing a housing bust than demand management.
The most salient aspect of that chart is the great disparity between the forecasts (wishful thinking?) and the actual results. What does that tell us?
It tells us that the global economy suffered two supply shocks – Covid and Russia’s invasion of Ukraine.
By the way, why are you dckng me? You have talked down the U.S. economy at every opportunity, suggesting the U.S. is in for three straight quarters of decline. I’ve offered you this bet:
If, after the first three quarters of 2022 GDP data are available in “final”, all three are reported down, I’ll stop commenting here for 3 months – all of Q1 2023. That’s on the condition that if all three quarters aren’t reported as having fallen in final, you stop commenting for all of Q1 2023.
What’s the problem, Johnny? Don’t you believe your own babble? Show a spine. Take the bet, Johnny.
Johnny, can you hear me?
Frankly, Macro. I don’t much care of quarterly GDP growth is -0.3% or + 0.3%. It’s pretty much all the same: it shows that economic growth is very weak.
But apparently it is a BIG DEAL for some economists. That amuses me immensely. Suddenly there is a blizzard of keystrokes telling us that GDP, a measure once virtually sacrosanct, is now to be regarded as, well, a bit sketchy.
What gives?
In any case it will be immensely amusing to watch the spin if GDP turns out to be down for three consecutive quarters!
“I don’t much care of quarterly GDP growth is -0.3% or + 0.3%.”
This is the kind of weasel back tracking we would expect from Princeton Steve. Oh yea – you two are BFFs!
“it shows that economic growth is very weak.”
Johnh, that is changing your position. there is a difference between growing and shrinking. you have called for shrinking. now your argument is we are growing, just too slow. this shows a lack of true conviction on your part. you are simply looking for a position to argue about.
In the world of playground tough guys, Johnny would be the guy saying “I’ll kick your a$$!” (which in this context is to say “I know stuff about the economy and the economy is bad!”) But when anybody stands up to the playground tough guy (in this context, offering Johnny a wager on how much Johnny actually knows) he (Johnny) says “You’re not worth it” and walks away, trying to look like he didn’t just back down. Typical coward.
And by the way, look at how Johnny has tried to pretend that 0.6% of GDP in a single quarter is all that this bet is about. He has crowed about Q1, Q2 and Q3 being weak. Now little Johnny doesn’t “much care of quarterly GDP growth is -0.3% or + 0.3%.” That was never his point before.
Johnny now says growth is “very weak” despite continued large gains in employment. Johnny sure does change his tune a lot.
Let’s remember, Johnny has repeatedly embarrassed himself by pretending to know about economics. He has mscontrued theory, misunderstood data, declared that data doesn’t exist when it does, insisted that economists don’t care about issues when there is extensive economic literature on those issues. Johnny doesn’t know much about economics.
But Johnny insists that the U.S. economy is bad, bad, bad. Why? Probably becase he’s paid to do so.
We know that Russia promoted racism during the 2016 election campaign. What are the hot topics in this year’s campaign? Economics and abortion. What’s Johnny’s unfailing message in the economy? The U.S. economy is bad, bad, bad. It’s unfair. It’s in recession. There’s inflation inflation. There is economic stress and inflation pretty much everywhere (yeah, yeah Japan!!!!), but Johnny makes it thhe special, blame-worthy problem of the U.S. ya, know, like racsm was the special, blame-worthy problem of the U.S. in 2016.
What else does Johnny have to say? Everything going on in Ukraine and all the side effects of Russia’s war on Ukraine are due to the U.S. Never, ever does Johnny even mention that Russia invaded Ukraine.
Johnny carries water for Putin. Johnny is a coward. Johnny gets economics and foreign relations wrong with utter and complete predictability. That’s who out little Johnny is. A paid troll.
The problem is inflation is a basket of goods john. You can’t have a strong dollar and collapsed port prices in creating inflation. You cannot. The poor reaction with business to the port clog and the surge in import prices were the underlying causes of the inflation in 2021. Now we have too much stuff vendors, manufacturers and retailers overpriced waiting to be moved. They failed their country and should be brought to task imo.
Well your new BFF Princeton Steve might say that actual economists are not nearly as good at forecasting as the great Princeton Steve. Of course Stevie boy has a horrific forecasting record but he is ‘on the record’ lying about the economic data almost as much as you do.
It tells us that the inflation hawks were right.
Food price deflation has not kicked in yet but Krugman is making the case that it will. Now Crudite is off my shopping list but I got some good deals on chicken and eggs this week.
To some extent, the passage of time under tighter monetary policy should bring down expected inflation. Tighter monetary policy will have been in effect one month longer n August, 2023 than in July, 2023.
It can also cause a increase in leverage as well.
Huh?
He means consumer credit?? Also lost.
A story on how the Brits will see a large increase in their energy bills with a contrast to what is happening in the UK:
https://www.msn.com/en-us/money/markets/uk-energy-bills-are-skyrocketing-why-is-it-happening/ar-AA114BO6
Now I get our Usual Suspects will somehow blame this on Biden but this story fortunately did not go there.
How are these CPI estimates going to look 1Yr from now? Biden/Dem policies continue to add to CPI faster than their lying about the laws they pass. IRA, a lie. Biden’s probably illegal forgiving student loans, and the infrastructure Bill will add to CPI. Most here probably forget that the $1T Infrastructure Bill was supposed to be FREE.
This is an economics blog. Anyone want to explain how these three actions will not further exacerbate the CPI rate?
Gee – your chasing your own tail has caused you to write even more insane gibberish. Market expectations are coming down, food prices at the wholesale level are coming down but wait the cost of your meds are sky high. I guess that’s why you cannot afford them anymore.
https://fred.stlouisfed.org/series/T5YIE
5-Year Breakeven Inflation Rate
This was near 3.6% back in late March but now is 2.8%. Of course CoRev the mad dog chasing its own tail thinks this means inflation is going up. His poor neighbors having to endure his insane barking all day long.
“Anyone want to explain how these three actions will not further exacerbate the CPI rate?”
Increases in government purchases are not fiscal stimulus if they are paid for by increases in taxes. Basic econ 101. Oh wait – they don’t teach economics at the school for rapidly insane dogs. Go back to chasing your own tail.
BTW CPI rate is the kind of stupid term Bruce Hall might use. Write on the chalk board 500 time. CPI is a price level. Inflation is the rate of change for the price level.
Oh I’m sorry – you can’t reach the chalk board while you chase your own tail. Never mind.
Speaking of forgiving loans, check out Moses comment on the new post and my replies how your favorite 13 members of Congress did not repay their PPP loans. Then again – your boy Donald Trump has declared bankruptcy even more times he got married.
actually covid, I have read many nonpartisan folks who do argue that the ira will bring down inflation in the long run. that was what is was supposed to do. if you expected it to bring down inflation today, you are simply a fool.
I for one am pleased that the nation is investing in infrastructure and semiconductors. these are far more productive than the tax cuts for the wealthy brought to us by trump. those were about as effective as the bush tax cuts. neither resulted in investment in the future needs of America.
by the way covid, you should listen to dr oz as he lectures on your poor health and dietary choices leading to your heart attack. you are a case study for him.
CoRev,
Simple. Increases in taxes more than offset increased spending tesulting in forecasts that deficit will decline, with this probably still holding even after taking account of the student loan forgiveness. Prior to it, the CBO and Penn Wharton Budget Model both said the IRA will be a net wash in terms of inflationary impact.
You really are competing pretty vigorously for being the stupidest commenter here with Anonymous, aren’t you, CoRev?
Okey dokey. Happy to oblige.
The infrastructure bill builds infrastructure. Infrastructure is an addition to supply-side capacity. I can’t draw pictures here, but if you do an internet search for “supply demand” and hit the “image” button, you’ll be on your way to seeing how adding to supply-side capacity is disinflationary.
IRA is a lie? Is you objection that the Inflation Reduction Act adds to inflation, doesn’t reduce inflation or isn’t a direct subsidy to your Individual Retirement Account? You’re challenge is for someone to show how three recent policy changes won’t be inflationary, so let’s go with that. The somebody in his case may as well be the CBO and the Wharton School, both of which find negligible inflationary effects from the IRW:
https://budgetmodel.wharton.upenn.edu/issues/2022/8/5/inflation-reduction-act-comparing-cbo-and-pwbm-estimates
Oh, by the way, the Committee for a Responsible Federal Budget (hardly a bunch of lefties) argues that the IRA will prove to lower inflation:
http://www.crfb.org/blogs/ira-will-help-fed-fight-inflation
You can disagree, of course, but you’re nobody.
Forgiving student loans? Well, lots of electronic ink has been spilled over this, most of it unenlightened. There have, hoever, been a few serious efforts to think throughthe economic effects of Biden’s student loan forgiveness plan. Goldman and BoA conclude it is likely to be slightly disinflationary:
https://www.forbes.com/sites/jonathanponciano/2022/08/25/student-loan-forgiveness-plan-wont-make-inflation-worse-even-if-it-adds-400-billion-to-deficit-goldman-says/?sh=234c6ce12e77
More importantly, the analysis concludes that macroeconomic effects will be small – about 0.1% of GDP in the first hear, less in subsequent years. CoVid, this is an economics blog; you want to explain how student loan forgiveness will have a big inflationary impact when the overall impact is so small?.
You may be tempted to crib from a crft report which argues that student debt forgiveness will prove inflationary, since this is apparently the source of much of the press coverage:
https://www.crfb.org/blogs/cancelling-student-debt-would-undermine-inflation-reduction-act
Problem is, some serious questions have been raised about the crft report:
https://rooseveltinstitute.org/2022/08/17/canceling-student-debt-would-increase-wealth-not-inflation/
Now, I don’t see a link on the crfb sight to the math behind the report, but Mike Konczal and Alí Bustamante seem to have found it. They cite a few assumptions which seem quirky, to say the least. First, they assume the forgiven payments will be spent, not saved. Second, they use a budget convention to assume all ofthe repayment ofdebt would have take place in the first ten years (the CBO budgeting period) rather than the actual lifetime of debt repayment. Finally, they assume 90% of the impact odpf increased spending would be through inflation, 10% through real consumption. These three assumptions interact (you do understand how yes?, Or should I explain this, as well?) In sum, the big splash of nk in the press about the inflationary impact of debt forgiveness is based on assumption. Change the assumptions, and the inflation disappears.
All better?
Some fodder for Macroduck’s discussion of GDI vs. GDP.
Q2 GDP Growth Revised Up to minus 0.6% Annual Rate
https://www.calculatedriskblog.com/2022/08/q2-gdp-growth-revised-up-to-minus-06.html
[CR:] From the BEA: Gross Domestic Product (Second Estimate) and Corporate Profits (Preliminary), Second Quarter 2022
[BEA:] Real gross domestic product (GDP) decreased at an annual rate of 0.6 percent in the second quarter of 2022, according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 1.6 percent.
The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the decrease in real GDP was 0.9 percent. The update primarily reflects upward revisions to consumer spending and private inventory investment that were partly offset by a downward revision to residential fixed investment
…
Real gross domestic income (GDI) increased 1.4 percent in the second quarter, compared with an increase of 1.8 percent in the first quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 0.4 percent in the second quarter, compared with an increase of 0.1 percent in the first quarter.
emphasis added
[CR:] Here is a Comparison of Second and Advance Estimates. PCE growth was revised up from 1.0% to 1.5%. Residential investment was revised down from -14.0% to -16.2%.
“Real gross domestic income (GDI) increased 1.4 percent in the second quarter, compared with an increase of 1.8 percent in the first quarter. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 0.4 percent in the second quarter, compared with an increase of 0.1 percent in the first quarter.”
Good point. Of course uber troll Princeton Steve will ignore this.
Gracias!
— has received 400 Nobel Prizes, —– has received zero.
— has received 400 Nobel Prizes, —– has received zero.
— has received 400 Nobel Prizes, —– has received zero.
[ Here then we have a play on the “Bell Curve” writing of a Charles Murray. Curious, the way in which prejudice can engulf a writer. ]
ltrm
Now we know that China has received at least one Nobel Prize, a dissident write imprisoned by the PRC government. Maybe there are more.
You are just not getting it. You constantly report the much lower number of deaths per million from Covid in Chiina compared to all sorts of other nations. By your argument this amounts to insjulting the entire people of all those nations and now is an example of something out of The Bell Curve. I wanred you that if you kept up with this krap, I would start reporting this way other-sided hard fact, which is not more like 400 to 1 rsthet than 400 to 0. Obviously it is one-sided, given the high rate of current scientific and inventive activity in China. Heck, I fully expect that say 25 years from now or so, we shall see a number of Chinese Nobel recipients. But these things take time.
You do not get it that this is not a slam on China, but a slam you overdoing your propagandizing in a way that has become seriously mindless, and you are somebody whose intelligence I respect. But this sort of whining out of you really makes you look unbelieveablhy stupid, and not on some Murray Bell Curve. Grow up and get real here.
This just in. AG William Jabba the Hut Barr represented the mob boss Donald Trump and not the nation. Who knew?
https://www.msn.com/en-us/news/politics/former-ethics-czar-blows-up-on-bill-barr-for-distorting-the-case-against-trump-in-the-russia-probe/ar-AA115OAJ
Former White House Ethics Czar and impeachment lawyer Norm Eisen criticized former Attorney General Bill Barr on Thursday after the Justice Department released the memo regarding whether or not Donald Trump should be charged for violating the law in the Russia investigation.
“Barr made up his mind in advance that he was going to give his patron, Donald Trump, a pass on these obstruction charges,” Eisen explained. “There was powerful evidence here! On the fact! The memo soft pedals Donald Trump’s dangling pardons, it says, ‘Oh, he had some disagreements with witnesses.’ No, Poppy! He was dangling pardons! He was engaging in conduct that any other — he was intimidating witnesses! Conduct that would have led to any other American who didn’t work in the White House being prosecuted, on the law!”
Eisen said that he has written many times about the false claims that there was no case to be had regarding Trump’s obstructions of justice.
“That’s ridiculous!” Eisen exclaimed. “And then when they talk about the specific cases, Poppy, they distort them. Like the case that they focus on, that’s on all fours with what Donald Trump did. There was an investigation he wanted to interfere with it. It is all wrong.”
“First of all, there was underlying conduct that may have amounted to a crime,” he continued. “Mueller didn’t decide to charge it regarding Russia. But more fundamentally, if you look at those cases … this memo also focuses on, Jim — in that case, the underlying conduct was stuff that would have been legal, except it was done with corrupt intent. I mean, come on!”
“The former president asked the White House counsel, Don McGann, to write a false memo lying about the investigation! Anyone else would be prosecuted for this. [But] Bill Barr wrote a memo to the White House before he was hired saying there were no crimes here. The fix was in. Don’t listen to me. Two federal judges, one appointed by a Democrat, one by a Republican, have said that Barr’s conduct was dishonest and it was.”
Approximately 3 million people out of our workforce because of long Covid.
https://www.cnn.com/2022/08/25/economy/long-covid-work/index.html
This may go a long way to explain the current workforce problems.
None of them will come back because we cut away unemployment insurance.
Ivan,
Sadly, covered employment (employees eligible for unemployment benefits) as a share of total employment has fallen sharply:
https://fred.stlouisfed.org/graph/?g=T78E
There are a number of moving parts to this – work tenure, special programs during the early Covid period, changing stae programs – so I don’t know if we should expect this ratio to remain depressed.
Unemployment insurance is a really good counter-cyclical tool. Increased coverage would be a boon to society.
“Unemployment insurance is a really good counter-cyclical tool. Increased coverage would be a boon to society.”
I do think that’s a big takeaway from the covid era — especially when unemployment is correlated (there’s a big shock and a whole bunch of people lose jobs at the same time). There’s also evidence that UI at rates higher than we see now in the US or UK would be efficiency enhancing at full employment *especially given* the fact that job market dropouts often end up on disability. I guess that’s Anne Case stuff but I think the point still stands.
…the department secretary asked a “maintenance man” to fix my shower, whereby he stood directly under the shower head fully clothed and seemingly drowned himself as he checked the water pressure….
[ This, of course, about a people who have just built an advanced international space station and whose team of students each scored perfectly in winning the Math Olympics…. This, of course, about a people who are greening a vast country at a rate that is stunning and offering assistance to poorer countries in doing the same. ]
the people of china are wonderful. the government and leadership of china are responsible for the deaths of millions of innocent citizens. in the name of politics, racism and ideology. that is what you support ltr. your defense is vile. if I post propaganda in china, I end up in jail or worse. you benefit from living in a free land, ltr, and yet your disparaging commentary towards the usa is tolerated nevertheless. china does not offer the same right. stop the propaganda.
I protest!!!! [ pulls out my NFL coach red flag for instant replay review ] I have made it very clear on this blog I am an equal opportunity hater. I mean how much vile vulgarity and spitting out stomach bile does your average degenerate sicko have to spew before that becomes clear?!?!?!?!
ltr is making meI feel like I’m losing my whole self-identity. Feeling faint…….. [ Cue Samuel Barber’s Adagio for Strings, Op. 11 here ]
I’m an unapologetic lurker here and almost never comment because I enjoy reading posts from the smart people that do, and I learn a lot. Thanks for that! But I honestly only ever scroll by ltr’s posts because they’re just regurgitation of articles I can (and probably have) read for myself, or completely off topic for the post. Probably 95% of them are off-topic for the post it seems. So I have no idea of the ideological bent, but it seems that a better comment is, when ltr starts posting items that help illuminate the current topic, that will be great. Until then people should just do what I do, scroll on by.
I also scroll by her comments on China. To be fair she on occassion provides some very useful comments, which is why her CCP driven comments are a shame.
the constant propaganda by ltr should stop. it outweighs the few good links that may be provided. taking advantage of prof. chinn’s hospitality on this site indicates a person with few morals. it is not good to constantly walk into somebody else’s house and shout your propaganda. such a person is rude and inconsiderate to others. that is ltr. ltr talks about being polite and considerate, yet conducts such offensive behavior on a daily basis.