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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (1300268)	5/12/2021 6:12:37 PM
From: Wharf Rat	Read Replies (3) \| Respond to of 1570917

"Her part of 4.2% inflation do you not understand?" I don't understand how His is blameless. I guess it's male privilege. Don’t overreact to inflation data this spring Jay ShambaughThursday, April 8, 2021 In the last few months, inflation has been a hotter topic than in recent memory. Google trends search intensity for the word “inflation” hit an all-time high (for the last 16 years since it was measured) and is roughly twice as high as it has been in normal weeks in the last five years. A number of economists have suggested that recent fiscal policy stimulus will lead to overheating and inflation, while others have argued just as vociferously it will not (see for example). This suggests that over the next few months, each inflation reading will draw increased scrutiny. There are a number of reasons to use caution when reading the data, though. Bouncy data in the next few months The COVID-19 pandemic cost hundreds of thousands of lives in the United States and unleashed a sharp recession. In addition to loss of employment and income, the shock caused the steepest three–month drop in the core personal consumption expenditures (PCE) price index since data exists in 1959 (the PCE is the preferred price index of the Federal Reserve and “core” means it excludes volatile food and energy prices). This dip is shown in the figure below which shows both headline (overall prices) and core prices over the last few years along with a line showing what the price level would have been had prices grown at 2 percent. This highlights that prices are still well below what a simple 2 percent trend would have generated. The drop last year will soon be important once again because inflation is typically reported as the change in prices over a 12–month period. Monthly changes are often volatile, so focusing on a 12–month change can smooth those bounces. Since prices fell from February to March in 2020, the comparison or “base” month will fall when March 2021 data are reported. If we focus on the rebound in prices since then without appreciating that it was just partially returning prices to their prior level, it may seem like inflation is rising out of control. Even if prices remained perfectly flat over the next few months, it would look like inflation is rising as the 12–month–ago base comparison is actually going down. brookings.edu