from Hacker News

Bad News About Inflation

by stereoradonc on 4/12/23, 10:22 PM with 110 comments

• by soared on 4/12/23, 11:24 PM

  > The gains in wages and employment that the hot labor market is delivering seem very large compared to the modest cost imposed by a temporary period of inflation.

  Sentences like that seem crazy to me - where is the hot labor market money going outside of faang? In my circle nobody is getting raises that overcome inflation unless they switch jobs, which is only viable every couple years at a max and has diminishing returns over time.

  Separately, is inflation temporary? I had thought price increases don’t return to their prior levels with the exception of gas, and seemingly a dozen eggs.

• by ProfessorLayton on 4/12/23, 11:29 PM

  SVB's failure was barely a month ago, and has sent chills all over the banking sector, which has started to tighten lending all around. While the current inflation trends may seem troubling, it looks like higher interest rates have started to trickle their way towards cooling inflation significantly.

  Of course this might not be the case, but at the very least I wouldn't expect the impact of SVB's failure to show up in any of these charts just yet.

  Disclaimer: Not an economist

• by zeitgeistcowboy on 4/12/23, 11:47 PM

  I understand what he is saying. The difference between the two lines was positive in the last month. But, compared to how large this positive gap was last August and September (looks like about 4% to 5%) this really seems negligible and possibly due to noise. And, it seems even more negligible compared to the cumulative negative (a good thing) gap since October. I think it's a little early to call the trend on one recent data point. Seems a little alarmist.

• by coffeebeqn on 4/13/23, 12:17 AM

  I really don’t think one (1) datapoint is enough to draw any conclusions about the seasonality of inflation.

  I’m sure inflation will be at a higher than baseline level for some years but unless something like COVID happens again - what would be driving an increase in inflation? If it’s from workers getting raises then why should we - the workers - worry about that? That’s literally the best place for the money to be going in the whole system!

• by wavesounds on 4/12/23, 11:22 PM

  My understanding is that a large portion of this "CPI index that excludes food and energy" is housing. Which might explain the seasonality mentioned in this blog post (people tend to move more in the warmer months).

  I don't see how raising interest rates will help when the core issue with housing is the lack of supply. If anything higher rates will make it harder to add more supply.

• by zeckalpha on 4/13/23, 12:24 AM

  We rounded a corner in June, but the annual reporting hasn't caught up yet. Once we hit July, (annual) inflation is going to look a lot better, but has been better when you look at the monthly numbers. https://fred.stlouisfed.org/graph/?g=12rxD

• by mysecretaccount on 4/12/23, 11:39 PM

  > From February to March, the CPI index that excludes food and energy shows that prices rose at an annual rate of 5.8% this year

  Didn't the BLS say 5.6%, not 5.8%? From https://www.bls.gov/cpi/

  > In March, the Consumer Price Index for All Urban Consumers increased 0.1 percent, seasonally adjusted, and rose 5.0 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.4 percent in March (SA); up 5.6 percent over the year (NSA).

  What am I missing?

• by rco8786 on 4/13/23, 12:22 AM

  Why are we using 2 data points and acting like it’s a trend.

• by 1letterunixname on 4/13/23, 2:59 AM

  Real inflation, that is the prices of essentials like food and prescriptions paid by people who aren't made of money, is still absurd and under-reported as usual.

  K-shaped recovery and inequality for the 99%.

• by skybrian on 4/13/23, 12:09 AM

  Looking at that graph, I'm thinking "about the same as last year at this time."

• by jarsin on 4/12/23, 11:50 PM

  Yes listen to this guy and please short treasury bonds. I need more rocket fuel on the way up.

• by gjsman-1000 on 4/12/23, 11:22 PM

  Who would’ve thunk that almost everything we did during the pandemic would be called into question whether it was really a good idea.

  The dumbest take though on the inflation issue was from the Washington Post, with this since-renamed headline: “Inflation is cooling, so why aren’t customers feeling it?” Well, slowing inflation isn’t exactly deflation, is it!

• by weard_beard on 4/12/23, 11:29 PM

  “Seasonal” ha!

  Spring isn’t in the air. That’s the smell of fresh cut dollars.

• by fauxpause_ on 4/12/23, 11:24 PM

  I’m not sure who this person is, but I feel they lose a credibility make two bullet points that seasonal effects being a thing is a noteworthy insight, and that they are difficult to assess. I mean yeah, they’re going to be difficult to assess when you’re only plotting 2-3 years of data.