Inflation Data in: CPI falls from 7.7% to 7.1%

[Johnny2X2X]

https://www.bls.gov/news.release/cpi.nr0.htm

Was expected to fall to 7.3%. This is strong news and the markets should respond very well today. Fed will still hike rates, but probably just 50 basis points.

We're through the worst of inflation, this is very good news. Energy prices falling is a big driver of these lower numbers.

[Johnny2X2X]

1. DOW Futures up 800 points

Great data this morning. And the trend for several months in a row means inflation is definitely falling.

Kind of cracks me up that no one even here cares about this. When inflation was rising DUers would make 10 threads about it with dozens of responses each. Now that it's moderating quickly, no one really cares. Is it any wonder why Biden gets blamed when it rose, but now that it's going down he'll get very little credit. Dems don't even care.

[W_HAMILTON]

2. Sadly, true. :(

I can only hope that maybe part of the lack of attention your post has gotten is maybe due to it still being early morning for a lot of people. I know I just woke up!

[Johnny2X2X]

3. Maybe

And beyond DU, CNN has the story buried on the Business page, not even the top story there.

When CPI would rise more than expected, it would be the immediate front page of CNN, Huff Post, and have a half a dozen DU threads by 9 am. Each thread would be filled with anecdotes about how everything costs so much more.

CPI was expected to drop by quite a bit, from 7.7% to 7.3%, many people thought that prediction set it up for failure. To see it fall to 7.1% was really surprising and noteworthy. It's a huge story. It's not even anywhere on Huffpost's page.

Dems are just bad at this stuff. They need to take all the credit for this since they got all the blame for when it went up.

[W_HAMILTON]

4. Oh, I have no doubt that the media, even so-called """liberal""" media, most certainly...

...buries these sorts of good news stories. It's how I chalked it up to how you would always hear stories from them about how Trump's approval ratings were improving and how you now normally hear how Biden's approval ratings are always falling. How can that be? Well, for Trump, they emphasize when they rebound and not when they fall. And Biden, they emphasize when they fall and not when they rise. That's how it happens.

Same thing with positive news about inflation and other similar issues when it comes to the media.

As to your comment about Democrats championing their success on these issues, the media point I mentioned above is another reason why it's hard for them to do so. You basically have conservative media that absolutely will not give them any credit and then you have so-called """liberal""" media that wants to downplay their successes or try to credit others for the success.

[Johnny2X2X]

5. DOW is now within 6% of its all time record

It will likely be breaking records again next year. UE is near all time lows. The economy is growing. Biden got more big pieces of legislation passed than any president in generations. The one big negative that had literally 10s of thousands of stories written or spoken about it was inflation. And now it's mostly crickets.

I hope Biden gives a big speech about this today.

[Zeitghost]

8. Great news indeed

I think many shy away because they were in the group insisting inflation was nothing but excessive corporate greed. Admitting inflation is receding would necessitate the belief on their part that corporations have decided to no longer be as greedy.

[Johnny2X2X]

9. Interesting point

And corporate greed was definitely part of it. But I think that's easier for people to understand than the intricate workings of supply chains. How shipping costs translate to higher costs, how adding inventory into stock costs money, how building a bigger inventory buffer because of uncertainty creates cost.

Corporations definitely took advantage, and they were trying to influence the elections for sure, but in the end, market forces decide price.

But inflation is really really hard to predict. It's one of those economic forces that basically boils down to, "If people think prices will rise, they will." That's why advertising decreases is so important, public sentiment can get the ball rolling more quickly to lower prices.

[W_HAMILTON]

12. Oh no, I think it certainly was mostly driven by corporate greed.

You can't get blood out of a turnip, or whatever axiom fits here. They definitely raised prices more than need be based on actual inflationary pressures and profit-took the rest. But prices have gotten so high threat consumers have been beginning to change their consumption habits, which was inevitable. Their consumers couldn't sustain this rate of price increases for long.

[GoodRaisin]

15. It was both. Supply chain disruptions from Covid got it all started and then corporate greed

took over.

Interesting how the rally flamed out as fast as it got started today, then recovered a little. Really a roller coaster day today.

[Johnny2X2X]

6. 2 hours since the biggest inflation news in a year broke

A grand total of 3 DUers have acknowledged it. 2 in this thread, and 1 other and me in a thread on the Breaking News forum.

Sigh.

[spanone]

7. ...K&R...

[Rebosuro]

10. Daily realities tell a different story for most.

People can see with their own eyes and feel with their wallets that the numbers don't match the reality. Food, shelter, healthcare and the rest of essentials are through the roof. That overrides partisan political jawboning from any direction. Unless one is in the top 10% or so on the income pyramid, and can pay easily and ignore the astronomical cost of daily survival, the reality doesn't lie. Pretty fair and non-partisan take on CPI in this article below.

https://www.thestar.com/business/opinion/2022/01/11/deciphering-the-fantasy-math-of-the-consumer-price-index.html

Is the U.S. purposely under-reporting inflation? It’s hard not to wonder when you look at how it’s calculated

[Johnny2X2X]

11. Article is almost a year old.

And I disagree with almost all of it. How inflation is calculated is not all that complicated. And this author's conclusion is to forget math, just use anecdotal evidence to make your conclusion. I mean, I'm in a much better financial situation this year than last, my expenses seem to be going down, so does that mean inflation is negative? Of course it doesn't. CPI is far from perfect, but it's the best measure we have, and for sure way better than anecdotes.

Fuel and energy costs are going down right night. Costs of a lot of goods and services are going down. Food costs are rising. Rents and used car prices are actually falling right now, but I'd bet you'd be hard pressed to see that because the only people who might notice are people who are moving or buying a used car. And using a TV as an example is another fallacy. First of all TVs have gone down in price, especially for the top end ones.

We've more or less calculated CPI the same was for decades although the basket of goods has changes as what people buy has changed. And 7.1% over a year's time is still not great, but it's down from 9.0%, so that's heading in a good direction. And what's more, wages are up. Wages are up over 5% the last 12 months on average. So that 7.1% becomes 2% in "Real inflation."

People are still feeling a crunch, for sure, and the tail end of inflation is where people start getting back ahead, especially this time around because there is no end in sight to the labor shortage we have, so pretty soon we're going to be in a situation where wage growth exceeds inflation for an extended period of time.

And this author is citing John Williams's website as his source for data, Shadowstats.com, that's his sole source for his piece. Williams is a kook outside anywhere but FOX Business, Hate radio DJ Wayne Allyn Root, or other Libertarian far out websites. This dude has zero credibility. Calling a guy whose lone source is John Williams non Partisan is laughable, but I'll just assume you didn't google who Williams is.

Look, inflation has been rough, but there's no reason we should all the sudden judge inflation by different standards for Biden than we did for the presidents before him. The fact is Biden was handed a disaster and inflation was inevitable, the US has navigated global inflation better than most other modern economies. And now we're seeing it trending in the right direction for 5 months, this is great news for working people even if they're still struggling.

[durablend]

13. Coulda fooled me

Fuel and energy costs are going down right night.

Not around these parts they aren't. And there's been several comments from the local media about it in the past few weeks ("AAA reporting gas prices going down sharply--not around here though" ). Are retailers overrun with greed or are the terminal/pipeline people a bunch of MAGAts trying to keep the rage against Biden continuing?

And not seeing much else going any way but up, even Walmart's jumped in full throttle on the gouging.

[Amishman]

14. Inflation is cumulative and wages have not kept up

Even if inflation drops to zero tomorrow, the damage is already done. The real income of many households have been crippled.

Helping families - cough cough child tax credit cough - needs to be a huge priority