It is widely held that a growing economy requires a growing money stock because economic growth increases demand for money. Many economists also believe that failing to accommodate the increase in the demand for money leads to a decline in consumer prices. This could destabilize the economy and produce an economic recession or even a depression. Some economists who follow Milton Friedman—also known as monetarists—want the central bank to target the money supply growth rate to a fixed percentage. They hold that if this percentage is maintained over a prolonged period, it will create economic stability. The idea that money must grow to support economic growth implies that money sustains … [Read more...]
Inflation Less Than Experts Predict in March
Annual inflation PLUNGED in March according to the Bureau of Labor Statistics CPI report released on April 12th. Monthly inflation was 0.33% for March 2023, compared to 1.34% in March 2022. This resulted in a 1% drop in Annual inflation. But despite the significant drop in inflation, the stock market did not rally. Instead, the NYSE lost a few points, and the NASDAQ lost just over 100 points. March 2023 Inflation Summary: Annual Inflation fell from 6.04% to 4.98% CPI Index rose from 300.840 to 301.836 Monthly Inflation for March was 0.33% Next release May … [Read more...]
Food and Shelter Prices Keep Climbing as CPI Growth Hits a Three-Month High
The federal government’s Bureau of Labor Statistics (BLS) released new price inflation data today, [i.e., February 14th], and according to the report, price inflation during the month decelerated slightly, coming in at the lowest year-over-year increase in sixteen months. According to the BLS, Consumer Price Index (CPI) inflation rose 6.4 percent year over year in January before seasonal adjustment. That’s down very slightly from December’s year-over-year increase of 6.5 percent, and January is the twenty-third month in a row with inflation above the Fed’s arbitrary 2 percent inflation target. Price inflation has now been above 6.0 percent for sixteen months in a row. [Editor's note: … [Read more...]
Inflation Falls Again in December
The Bureau of Labor Statistics reported that Annual Inflation fell from 7.11% in November to 6.45% in December 2022. This was down from a peak of 9.06% in June 2022. Monthly inflation was negative (Disinflation) for November at -0.10% and December at -0.31%. This is fairly typical for the fourth quarter, which is traditionally negative. Monthly inflation for 2022 was lower than in November 2021, so December Annual inflation fell. It is important to remember that although the inflation RATE is falling... prices are still going up, i.e., prices are still 6.5% higher than they were a year ago. A decline from 7.5% to 6.5% is similar to a car going from 75 mph to 65 mph... it is still … [Read more...]
Inflation Down in November
The Bureau of Labor Statistics reported that Annual Inflation fell from 7.75% in October to 7.11% in November 2022. This was down from a peak of 9.06% in June 2022. Monthly inflation was negative (Disinflation) for November at -0.10%. This is fairly typical for the fourth quarter, which is traditionally negative. Monthly inflation for 2022 was lower than in November 2021 so Annual inflation fell. It is important to remember that although the inflation RATE is falling... prices are still going up, i.e., prices are still 7% higher than they were a year ago. A decline from 7.75% to 7.11% is similar to a car going from 77 mph to 71 mph... it is still speeding forward just not quite as … [Read more...]
November Producer Price Index Declines from 2021 to 2022
Typically when we think of inflation, we look at the Consumer Price Index (CPI), which measures prices affecting Consumers. Today we are going to look at the November Producer Price index. According to the U.S. Bureau of Labor Statistics (BLS), "the Producer Price Index (PPI) measures the average change over time in the prices domestic producers receive for their output. It is a measure of inflation at the wholesale level that is compiled from thousands of indexes measuring producer prices by industry and product category." The index is published monthly, but unlike the CPI, the PPI is subject to adjusting/correcting over the following four months after publication. The CPI is considered … [Read more...]
Can Businesses Really Set Any Price They Want?
There is a common belief that a company can arbitrarily pick any price it wants for its products and then make obscene profits. And while it is true that a company is certainly free to set its prices, that doesn’t mean that consumers have to pay them. There are a variety of other factors at play. Does the company have a monopoly? How long would it take for the competition to gear up and start producing a competing product? How much demand is there for this product? How desperately does the consumer want/need this product? How expensive is it for the competition to get started? Is the monopoly due to a patent, government fiat, or temporary supply disruption? And many others. In the … [Read more...]
Annual Inflation Retreats in October
The Bureau of Labor Statistics reported that Annual Inflation for October 2022, fell from 8.20% to 7.75% Monthly inflation at 0.41% was still very high for a month in the fourth quarter, which is traditionally negative or at least very close to zero. But although high, October 2022 monthly inflation was still lower than in October 2021. So… Annual inflation for the 12 months ending in October 2022 fell to 7.75%. This was down from 8.20% in September 2022. Inflation Summary: Annual Inflation fell from 8.20% to 7.75% CPI Index rose from 296.808 to 298.012 Monthly Inflation for October was 0.41% Next release is December 13th October Annual Inflation was 7.75%. Jan. … [Read more...]
August 2022 is Actually Disinflationary
The Bureau of Labor Statistics reported that in August, Annual Inflation fell from 8.52% to 8.26% Inflation Summary: Annual Inflation fell to 8.26% from a peak of 9.06% in June CPI Index fell from 296.276 to 296.171. Monthly Inflation for August was -0.04% Next release October 13th August 2022, Annual Inflation was 8.26%. Jan. 2021 -- 1.40% | Jan. 2022 -- 7.48% | Feb. 2022 -- 7.87% | March 8.54% | Apr. 2022 --8.26% May 2022 -- 8.58% | June 2022 -- 9.06% | July 2022 -- 8.56%% | August 2022 -- 8.26% BLS Inflation Report: According to the BLS Commissioner: "The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in August on a seasonally adjusted basis … [Read more...]
Everything They Tell You About Inflation is Wrong
In today's article, J.R. MacLeod looks at the effects of inflation, the fraud it perpetrates on the population, and who benefits and who loses from inflation. He also shows that "Inflation is not necessary for real wealth and real growth... inflation is completely unnecessary for a growing and prosperous economy". ~Tim McMahon, editor Inflation, the Price Level, and Economic Growth: Everything the Elites Tell You about It Is Wrong Fundamentally, inflation is fraud. The central government or bank printing more money lessens the value of the money already in circulation. A truckload of sand isn’t particularly valuable in Saudi Arabia. An increased supply of money means that ultimately prices … [Read more...]
