The U.S. Bureau of Labor Statistics released its March 2025 Inflation report on April 10th, 2025. The report showed that Annual Inflation was down from 2.8% in February to 2.4% in March. Calculated to two digits, it was 2.82% in February and 2.39% in March. Although this month's numbers look very good there is a surprise hidden in the monthly numbers. (See this month's MIP). Inflation Prediction: This is the second month in a row that actual inflation came in slightly below our "extreme low" projection. We had projected an "extreme low" of 2.42% for March, but it came in at 2.39%. Of course, had we been rounding to one digit as the BLS does, it would have been right on the nose of … [Read more...]
BLS: February 2025- Inflation Down
The U.S. Bureau of Labor Statistics released its February 2025 Inflation report on Wednesday, March 12th, 2025. The report showed that Annual Inflation was down from 3.0% in January to 2.8% in February. Calculated to two digits, it was 3.00% in January, and 2.82% in February. On a non-seasonally adjusted basis, monthly inflation was 0.65% in January 2025, and 0.44% in February. This was down from 0.62% in February 2024. Inflation Prediction: As you can see from our MIP projection from last month, February's Annual inflation at 2.82% is just below our predicted Extreme Low of 2.88%. … [Read more...]
Which is Worse, Inflation or Deflation?
It all depends on the type of Deflation. There are actually two types. The deflation that most people are familiar with is the result of a market collapse such as we saw in 2008. Prices of assets (like stocks) fall because of some sort of “accident,” such as the mispricing of mortgage-backed securities and derivatives. When assets lose value quickly, panic sets in, leverage must be liquidated, causing other assets to be sold, creating a "snowball effect" causing a "risk-off" mindset. Consumers cut back on unnecessary purchases, businesses lay-off workers, unemployment skyrockets, and the economy stagnates, etc. But looking even deeper, we find that the “mispricing’ was caused by too much … [Read more...]
Which Debts To Pay Off First When Inflation Hits
Inflation does more than push up prices at the store — it also makes borrowing more expensive because banks need to raise interest rates to cover the loss of purchasing power of the money they are loaning out, since they are getting repaid with "cheaper dollars". When prices rise faster than wages, household money shortages lead to mounting debt. And, unless you have a fixed interest rate lown, your monthly payments on loans and credit cards will climb higher each month. With these rising costs, you need a clear plan for tackling debt. The Impact of Inflation on Debt When inflation rises, it affects your debts in two different ways. Rising prices change how much your debt really costs. … [Read more...]
Would DOGE Dividend Checks Stoke Inflation?
With all the potential savings DOGE is uncovering some people are suggesting that some of those saving be rebated to taxpayers. Others are saying that doing that would be inflationary in the same way that Biden's stimulus checks were. In this video, Bob Murphy, Senior Fellow of the Mises Institute looks at the implications of this possible rebate. https://youtu.be/NltFVYom1lc?si=knQzinKc45MuuWv4&t=101 Rothbard's Making Economic Sense Bob's Understanding Money Mechanics … [Read more...]
BLS January 2025 Inflation Report
The U.S. Bureau of Labor Statistics released its January 2025 Inflation report on Wednesday February 12th 2025, showing Annual Inflation was up from 2.9% in December to 3.0% in January. This looks like a 0.1% increase. (But since we calculate it to two digits, it was 2.89% in December and 3.00% in January, which means the actual increase was 0.11%.) On a non-seasonally adjusted basis, monthly inflation was 0.04% in December and a whopping 0.65% in January 2025 this was up from 0.54% in January 2024. Inflation Prediction: As you can see from our MIP projection from last month, January's Annual inflation at 3.00% is just above our predicted Extreme High. … [Read more...]
The Correlation Between Job Market Turnover and Inflation
Inflation, the rate at which the general level of prices for goods and services rises, erodes purchasing power and poses significant challenges for economies. During periods of high inflation, individuals face increased living costs, prompting many to reassess their employment situations. Further, inflation influences job market turnover rates, as workers seek better opportunities to maintain their financial stability. We will explore the correlation between rising prices and employee mobility, the psychological factors driving job changes during inflationary periods, and the implications for employers navigating this turbulent landscape. By understanding these dynamics, we can gain … [Read more...]
BLS releases its December 2024 Inflation report
The U.S. Bureau of Labor Statistics released its December 2024 Inflation report on Wednesday January 15th 2025, showing Annual Inflation was up from 2.7% in November to 2.9% in December. This looks like a 0.2% increase. (But since we calculate it to two digits, it was 2.75% in November and 2.89% in December, which means the actual increase was 0.14%.) On a non-seasonally adjusted basis, monthly inflation was 0.04% in December but annual inflation rose because December 2023 was a negative -0.10%. Inflation Prediction: As you can see from our MIP projection from last month, December's Annual inflation at 2.89% is just a hair below our predicted Extreme High of 2.90%. … [Read more...]
How Inflation Destroys Civilization
The following article by Jörg Guido Hűlsmann was originally published in 2004. Dr. Hűlsmann is a professor of economics at the University of Angers, where he directs the Master in Law and Finance and codirects the double bachelor program in Law and Economics. He teaches classes on macroeconomics, money, banking, and finance. He is the author of Abundance, Generosity, and the State (2023), Krise der Inflationskultur (2013), The Ethics of Money Production (2008), and Mises: The Last Knight of Liberalism (2007). His books and articles have been translated into twenty languages. His current research focuses on the political economy of financial markets, as well as on the theory of money … [Read more...]
November 2024 Inflation Up Slightly
The U.S. Bureau of Labor Statistics released its November Inflation report on Wednesday December 11th showing Annual Inflation was up from 2.6% in October to 2.7% in November. (But since we calculate it to two digits, it was actually 2.60% in October and 2.75% in November but for some reason they rounded down rather than rounding up.) On a non-seasonally adjusted basis, monthly inflation was -0.05% in November but annual inflation rose because November 2023 was a negative -0.20%. Inflation Prediction: For a change, the "experts" were right this month with their prediction of 2.7% Inflation for November maybe that is because they agreed with our Mip "Most Likely" prediction for a … [Read more...]
