Day before they release the next numbers. One of the biggest things that got trump elected was inflation. I can’t say I’ve ever seen more CPI talk in my lifetime. Now that trump is boss and promised to lower prices do we still care about CPI?
Do we care about CPI anymore?
- Thread starter DW4_2016
- Start date
Important for shaping policy when there is a defined trend? Sure. Personally, I care significantly more about PPI. Both are lagging indicators using backward looking data, thus limited to some extent.
This an area of economic data where tech advancements will be able to help with the organization, processing, and reporting of massive amounts of survey and other input data to eventually provide us with much more real time info. Truflation is one early effort using 24 hour update cycles. It looks positive. Don’t know enough about it yet to speak to its accuracy or usefulness or cite it with any confidence. But, it is interesting.
This backfired a touch OP.
This an area of economic data where tech advancements will be able to help with the organization, processing, and reporting of massive amounts of survey and other input data to eventually provide us with much more real time info. Truflation is one early effort using 24 hour update cycles. It looks positive. Don’t know enough about it yet to speak to its accuracy or usefulness or cite it with any confidence. But, it is interesting.
This backfired a touch OP.
I voted yes, so yes. Did you have a hard time finding the poll results or was it the reading that was over your head?
Fair enough... Thank you Trump. But I do have a question for you. In other threads like the egg one, you are excusing Trump for not getting stuff done quickly and blaming Biden for stuff that's going on now. Saying (with some justification IMHO) that there wasn't time to turn these things around yet. But THIS one we should be thanking Trump for? Does Biden not get "blamed" for it too? It just seems like anything bad gets blamed on Biden and anything good is all Trump. Is that the way it is?
First I would point out the same thing was done during Trumps first term. Everything good was “Obama Economy” and everything bad was Trumps fault. Part of the normal him and haw.
However, this opinion is cited by data from the Dept of Labor.
The following statements are factual, draw your own conclusions.
1) inflation reached its highest level
In 50 years under the Biden admin
2) Democrats tried to pass BBB, thwarted by a sole defector vote.
3) the last two inflation reports reflecting Bidens term both showed a higher than expected rate of inflation
4) Trump campaigned on lowering inflation
5) Trump took drastic measures to reduce inflation including instituting DOGE.
6) Democrats claimed his tariffs were inflationary
7) the first inflation report reflecting trumps term came in lower than expected.
Personally I think it’s too early to declare victory. Trump is serious about inflation, which is what the voter wanted. The inflationary effects of his tariffs policy is still a big unknown. If he can navigate it successfully it could bring us back down close to our 2% target.
How about I’d never thank a president on a message board for the CPI number. I’m somewhat shocked you didn’t think the number was rigged. It has been manipulated for years now, but I guess trump would never stoop to that level.
Yeah, we are aware that the Biden admin manipulated the numbers. Hopefully the Trump admin cuts that out.
Now there are websites like truflation.com that will keep them honest.
Best analysis i have seen yet.
This is an analysis of February CPI data published today: I estimate a sequential (month-on-month) improvement of 0.21% to 1.57%. Key observations: February [January]1. Headline improved: Headline CPI was 2.8% [3.0%]2. Underlying inflation reduced: Excluding the stale but heavily weighted (26% and 7.5% weighting) implies 2.0% [2.2%]3. #1 biggest driver: Car insurance remains a problem adding 0.32% points to inflation.
_Car insurance has a very high weighting (2.8%) and is up 11.1% [11.8%]. _Car insurance inflation is not driven by monetary policy but by very high insurance industry losses. The key metric in auto insurance is the combined ratio which was 112% in 2022 and 105% in 2023. A ratio of >100% means insurance companies loss money on underwriting insurance.
S&P Global forecasted 98.4% combined ratio for 2024 (companies haven’t fully reported yet). This means that insurance companies are left with only $0.016 in underwriting profit for each $1.0 in premium in 2024. This is way too low. Insurance companies, even accounting for float, require at least a combined ratio of below 97%-98% although this is still bad. Most companies target in the low 90ies to balance volume and margin, provided they have enough capital (but I digress…). _
This means that car insurance is likely an ongoing problem which keeps headline high even though it’s not touched by monetary policy directly. 4. #2 biggest driver: eggs, adding 0.11% (11 bps) to inflation. _Eggs, despite their low weighting of just 0.19%, have the second biggest impact on inflation due to their 59%(!) price increase. _Eggs prices skyrocketed due to culling of significant shares of the North American hen population after an outbreak of avian flue last year. It takes at least 6 months before a chicken turns into a hen that can lay eggs in sellable quality. _Again, this is not an item monetary policy can touch.
Bottom line: adjusted for stale shelter metrics and key items outside monetary policy (car insurance and eggs), headline inflation was already at 1.57%. Adjusting January the same way, we can see a 0.21% (21 bps) sequential improvement in underlying inflation (from 1.78% to 1.57% in February). (Note: egg price is literally off the chart. Egg prices increased 58.77%)
This is an analysis of February CPI data published today: I estimate a sequential (month-on-month) improvement of 0.21% to 1.57%. Key observations: February [January]1. Headline improved: Headline CPI was 2.8% [3.0%]2. Underlying inflation reduced: Excluding the stale but heavily weighted (26% and 7.5% weighting) implies 2.0% [2.2%]3. #1 biggest driver: Car insurance remains a problem adding 0.32% points to inflation.
_Car insurance has a very high weighting (2.8%) and is up 11.1% [11.8%]. _Car insurance inflation is not driven by monetary policy but by very high insurance industry losses. The key metric in auto insurance is the combined ratio which was 112% in 2022 and 105% in 2023. A ratio of >100% means insurance companies loss money on underwriting insurance.
S&P Global forecasted 98.4% combined ratio for 2024 (companies haven’t fully reported yet). This means that insurance companies are left with only $0.016 in underwriting profit for each $1.0 in premium in 2024. This is way too low. Insurance companies, even accounting for float, require at least a combined ratio of below 97%-98% although this is still bad. Most companies target in the low 90ies to balance volume and margin, provided they have enough capital (but I digress…). _
This means that car insurance is likely an ongoing problem which keeps headline high even though it’s not touched by monetary policy directly. 4. #2 biggest driver: eggs, adding 0.11% (11 bps) to inflation. _Eggs, despite their low weighting of just 0.19%, have the second biggest impact on inflation due to their 59%(!) price increase. _Eggs prices skyrocketed due to culling of significant shares of the North American hen population after an outbreak of avian flue last year. It takes at least 6 months before a chicken turns into a hen that can lay eggs in sellable quality. _Again, this is not an item monetary policy can touch.
Bottom line: adjusted for stale shelter metrics and key items outside monetary policy (car insurance and eggs), headline inflation was already at 1.57%. Adjusting January the same way, we can see a 0.21% (21 bps) sequential improvement in underlying inflation (from 1.78% to 1.57% in February). (Note: egg price is literally off the chart. Egg prices increased 58.77%)
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