Dean Baker has an interesting article conjecturing about future declines in the CPI, being driven by gasoline, cars, and food. The argument seems plausible, depending on what happens in the supply chains and the oil markets. I want to consider what might happen, depending on other components.
Inflation Expectations
Before and after the November CPI release.
CPI Inflation in November
Month-on-month down, even if up year-on-year. Trimmed and sticky price inflation (m/m) are also down.
Longer Term Inflationary Implications of the Build Back Better Act
Interests and Policy
Reader JohnH writes:
There is little discussion of the industry influence in the media, and even on Google, and certainly not among economists, who shun any discussion of power dynamics and corporate influence in the global economy like the plague.
FT-IGM US Macroeconomists Survey for December
Inflation Breakeven, Term Spread, Risk and Uncertainty: A Snapshot
As we get additional news day by day, it’s useful to see what financial and other indicators have to say about the economic outlook.
Variation in the Potential Geographic Impact of Omicron
Very tentative (non-clinical test) indications are that vaccination helps reduce incidence and severity of infections from the omicron variant. If this proves true, then we should expect vaccination rates to be critical to impact. Here’s the map, county-by-county.
Real Wages through November
If current nowcasts are accurate, we see erosion in some real wages, but not even those for hospitality and leisure. That’s not true for total private NFP using the PCE deflator. [italics denote correction 12/5]
Interpreting the Employment Release – November 2021
A couple of plots to highlight the fact that the November number on nonfarm payroll employment should be understood in the context of ongoing revisions in the data (see release here).