Artificial intelligence is being heralded as one of the most transformative technologies of all time, with the potential to radically improve productivity, reduce costs, and drive economic growth. But as the AI revolution unfolds, a paradox is emerging: AI has deep deflationary potential, yet its explosive demand for electricity and infrastructure introduces inflationary pressures. Understanding these contradictory forces is essential to understanding how Artificial Intelligence could shape macroeconomic trends in the coming decade. The Deflationary Power of AI AI’s primary deflationary force lies in its ability to automate tasks across every sector of the economy — from legal document … [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...]
Inflation Expectations and the Massive Fed Stimulus
Inflation is loosely described as a general economic state of rising prices. In February 2020, the US inflation rate dipped from a high of 2.5% in January, to 2.3%. Assuming the standard of steadily increasing prices, driven largely by food, fuel, and living expenses, one can expect the inflation rate to tick higher. Forecasts for April 2020 are at 1.7%. Given that the major drivers of inflation are excess demand (demand-pull inflation), or cost-push inflation, current conditions based on Coronavirus quarantines have created a murky demand climate. Oil Prices and Inflationary Expectations All major US indices, including the Dow Jones Index, have plunged precipitously. Stock portfolios … [Read more...]
Oil Price Inflation Charts and Tables Updated
Oil Price Inflation This month we have updated the Crude Oil Inflation Chart which shows historical crude oil prices and also what they would be if you adjusted them for inflation as of February 2019. We have also updated the Annual Crude Oil Prices Table and the Monthly Crude Oil Prices Table both of which also show prices adjusted for inflation. The nominal price of a barrel of oil was only $1.37 back in 1946 but the inflation adjusted price of oil was $18.92 per barrel. (The nominal price is the price you would have actually paid at the time). The major peaks occurred in December 1979, October 1990, and June 2008 at $125.23, $65.68, and $145.93 respectively (all inflation adjusted to … [Read more...]
October Inflation Up Slightly
The U.S. Bureau of Labor Statistics (BLS) released their monthly Consumer Price Index report on November 14th 2018, for the 12 month period through the end of October. Annual Inflation is Up Annual inflation was 2.52% in October up from 2.28% in September. CPI was 252.885 in October up from 252.439 in September, and 252.146 in August. Monthly Inflation for October was 0.18%, 0.12% in September, compared to -0.06% in October 2017. Next release December 12th Monthly Inflation: According the the BLS Commissioner's report: "The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in October on a seasonally adjusted basis after rising 0.1 percent in … [Read more...]
Falling Oil Prices: Worrying Trend or Saving Grace?
By Marin Katusa, Casey Energy Team When oil prices start to decline, investors and economists get worried. Oil prices in large part reflect global sentiment towards our economic future – prosperous, growing economies need more oil while slumping, shrinking economies need less, and so the price of crude indicates whether the majority believes we are headed for good times or bad. That explains the worry – those worried investors and economists are using oil prices as an indicator, and falling prices indicate bad times ahead. But oil prices have to correct when economies slow down, or else high energy costs drag things down even further. And the current relationship between oil prices and … [Read more...]
Is Natural Gas Cheap?
By David Galland, Casey Research At the height of its late 2005 rally, natural gas in the U.S. was selling for just over $16/MMBtu, 350% higher than today’s price of $3.56. The oil/gas ratio, now over 18, is an all-time high… suggesting that natural gas is dirt cheap. So, it’s a buy, right? In a phrase, not exactly. According to a recent report by Natural Gas Intelligence, U.S. natural gas available for production “has jumped 58% in the past four years, driven by improved drilling techniques and the discovery of huge shale fields in Texas, Louisiana, Arkansas and Pennsylvania, according to a report issued Thursday by the nonprofit Potential Gas Committee (PGC).” According to the … [Read more...]
What is Core Inflation and Why Doesn’t It Include Food and Energy?
Updated 12/11/2021 I frequently receive this question in one form or another: Why doesn't the government consider food and energy and just tracks core inflation? The core inflation rate is frequently quoted in the popular press, and this gives the general public the impression that the "government" doesn't care about (or track) the rise in the prices of food and energy. Actually, this isn't true. The core inflation rate is simply a component of the overall inflation rate. Economists use it because seasonal factors often skew the inflation rate. For instance, a drought might cause fruit crops to fail, causing fruit prices to rise. But this rise actually has nothing to do with … [Read more...]