With apologies to John Donne.
Jim provided some key points in his Thursday post regarding the 21Q2 advance figures. Here are my additional takeaways: (1) the Administration’s forecast locked down in February looks prescient; (2) Final sales were higher than GDP, (3) exports have not buttressed growth, partly because of slow rest-of-world growth, (4) price growth is a rising share of nominal GDP growth.
Consumption, personal income and St. Louis Fed’s real manufacturing and trade industry sales were released today. The July employment situation will be released next Friday. This is the picture today.
William Luther at AIER asks “Is Inflation Merely Catching Up?“:
Victor Davis Hanson, writing in a data-free commentary published by the Independent Institute : NOTE as of 7/26, the Independent Institute’s version of the article has disappeared; I add here another copy of the article, at some site called “American Greatness“. 10/26/2021, MDC.
That’s the title of a NYT article today.
Inflation surged at the beginning of the Korean War, with the economy at full employment. Here’s CPI and PPI inflation then and now…
Household forecasts are about 2 percentage points above those of economists.
An argument increasingly being made is that inflation is being built into wage demands in a context of really tight labor markets, and this would induce a wage-price spiral. This outcome is plausible, but I think it’s useful to compare wages against CPI to see if wages are really abnormally high, and are starting to rise in tandem with inflation. [text corrected 8/13]
A lot of coverage of how the NY Fed’s survey of consumers’ inflation expectations had moved substantially (e.g. NYT). A couple of observations: (1) household/consumer based expectations are upwardly biased; (2) the high inflation is expected to be temporary, in the sense that the expected inflation in the next 12 months is higher than 12 month inflation ending in June 2024.
From Reuters today: