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US Core inflation level lowest in 3 years

Discussion in 'Too Hot for Swamp Gas' started by citygator, Sep 29, 2023.

  1. AzCatFan

    AzCatFan GC Hall of Fame

    Apr 9, 2007
    Spending was one of the forces behind US inflation, but not the driving force. That was significant supply chain issues brought about by COVID. It's why, back in June, 2022 the US was about the middle of the pack in terms of global inflation. Almost every country on this list was experiencing inflation rates double or more than the average they had experienced the past 20 years. There is no way that US spending was the driving force behind all this global inflation. And many countries on the bottom of this list, like China and Japan, artificially suppress inflation.

    Since June, 2022, the US has actually had lower inflation and better growth than any of the other G7 countries. Has our spending habits changed significantly? Or, has supply chain issues present during the pandemic finally resolved itself? US inflation is still higher than the target 2%, but other countries are still in the process of recovery, and globally, we can't fully escape it when other countries are experiencing rising prices.
     
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  2. danmanne65

    danmanne65 GC Hall of Fame

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    Yes, very well said for being basically wrong but the sentence structure was superb.
     
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  3. dangolegators

    dangolegators GC Hall of Fame

    Apr 26, 2007
    What do you mean by '1 1/2 years GDP in liquidity'?
     
  4. l_boy

    l_boy 5500

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    While I hope you are right, it isn’t obvious to me this is the case, yet. It is true that CPI will likely be muted for some time due to the leveling off of housing/rents - and that may keep cpi low ish for a year or more. But energy could tick up again, and wage pressure can also push inflation.

    It took more than a decade to get inflation to really low levels after early 80s.
     
  5. AgingGator

    AgingGator GC Hall of Fame

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    Between all of Covid spending, the other additional bills, the Biden giveaways and the Fed lowering rates and buying government securities between mid 2020 and early 2021, was the equivalent of 1.5 years of GDP in liquidity
     
  6. dangolegators

    dangolegators GC Hall of Fame

    Apr 26, 2007
    Let's see a link. I'm curious to see how this is calculated.
     
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  7. surfn1080

    surfn1080 Premium Member

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    Fed members keep talking hawkish though.
     
  8. l_boy

    l_boy 5500

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    37.5 trillion in liquidity? Uhhh…..no.
     
  9. citygator

    citygator VIP Member

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    Charlotte
    2020 to 2022 GDP without government spending dropped by 7% to the trend it was on. That’s a $4T fall in GDP over 3 years. Government spending went up $5T to the trend it was on. You’re left with about $330B per year of extra GDP. Yea… real impactful.

    Oh and that’s $5T spending increase if you use a generous assumption it was only going to go up 3% even though Trumps 2019 was an 8% spending increase. If you assume that 8% was the government spending trend then the real spending was up $4T to trend, same as Non-govt spending fell. No extra gdp.

    Reality is government spending mostly replaced non govt GDP whether you admit it or not it is irrelevant. It is what it is.
     
    Last edited: Oct 3, 2023
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  10. citygator

    citygator VIP Member

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    Charlotte
    If he posts a link that would be a first.
     
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  11. citygator

    citygator VIP Member

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    Seems like it but yea anything can happen.
     
  12. AgingGator

    AgingGator GC Hall of Fame

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    I will try and find the article that I read last year and post the link.
     
  13. duggers_dad

    duggers_dad GC Hall of Fame

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    I don’t care who the POTUS is. I want this to be wrong. But …

    The fact that economists can't really figure out why any of this is happening is causing more confusion. The lack of answers means that a clearer economic policy is unlikely to come into focus and there is more economic frustration coming. That just happens to also be coming with a major federal election cycle on the way, and everything could go to economic hell right as the presidential campaigns really get going.

    We May Not Be Getting That Economic 'Soft Landing' After all
     
  14. duggers_dad

    duggers_dad GC Hall of Fame

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  15. citygator

    citygator VIP Member

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    Red State. lol.
     
  16. l_boy

    l_boy 5500

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    Is it me or are gas prices dropping like a stone. Now under $3.00 here in TX.

    Diamond Joe strikes again!
     
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  17. slocala

    slocala VIP Member

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    Positive news.

    A tame inflation report on Thursday would likely kill the prospect of an interest-rate increase by the Federal Reserve at its next meeting, despite signs of continued strength in the labor market.

    Fed officials are watching the consumer-price index, and other data, as they mull whether another rate hike this year will be necessary to keep inflation declining.

    CPI Report Shows September Inflation Steady at 3.7%
     
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  18. G8trGr8t

    G8trGr8t Premium Member

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    chinese SPR phase 1 is full and their demand is dropping as their economy continues to struggle. Pair that with two large new refineries coming online adding over 1M barrels per day of refined products to the market and electric car sales increasing. As always, POTUS has very little to do with it
     
  19. rivergator

    rivergator Too Hot Mod Moderator VIP Member

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    average gas prices in Florida down 13 cents in the past week, 20 cents in the past month, according to AAA. Still 1 cent higher than a year ago.
     
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  20. l_boy

    l_boy 5500

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    where are refineries coming online?