Fantasies of the Past

From people who extrapolate from personal observations, while dismissing statistics; to wit:

The chip shortage is ending. My Whirlpool contact told me they are now back to full production and going downstream to a HVAC company I am related to, all chip shortages ended in late summer.

Auto will be over by Halloween. Production of new cars will surge into 2021. Creating deflationary pressures. People like Condon don’t anticipate, they create intellectual fantasies.

That was a comment by Gregory Bott in September 2021.

So read this latest comment (from today) regarding the oil price increase/Russian invasion impact on economic prospects with that prognostication in mind:

I see little actual disruption. My guess by May, this will be reversed. Much like the coming upward revisions to gdp/payrolls in 2020-21. Be careful with struggling government data.

Gregory Bott may turn out to be right in the end. But I’m not betting on it (and I just really don’t know how people can be confident about things when the situation is so fluid).

 

 

One Year Ahead Inflation Forecasts

 

Figure 1: CPI inflation year-on-year (black), median expected from Survey of Professional Forecasters (blue +), median expected (preliminary) from Michigan Survey of Consumers (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]. Source: BLS, University of Michigan via FRED and Investing.com, Reuters, Philadelphia Fed Survey of Professional Forecasters, NY Fed, Cleveland Fed and Coibion and Gorodnichenko. 

In terms of accuracy and bias, a new study by Bennett and Owyang (forthcoming) is very relevant.