US Inflation Jumps To 7% YoY As Real Hourly Earnings Growth Crashes To -2.32% |  |
Posted on 01/12/2022 5:55:52 AM PST by Browns Ultra Fan
This is like the Samuel Beckett play “Waiting For Godot.” Except we are waiting for Jerome Powell and The Federal Reserve to do something.
December’s consumer price index (CPI) is out and its a doozy, though expected. The CPI year-over-year (YoY) rose 7% in December.
If we exclude food and energy, CPI rose by 5.5% YoY.
Thanks to Biden’s assault on the energy sector, energy prices are up nearly 50% YoY.
REAL average hourly earnings YoY? It has crashed to -2.32%.
And with 7% inflation, the Taylor Rule model suggests a Fed Funds Target rate of … 17.84%. Bear in mind that the current target rate is 0.25%.
Meanwhile, we are waiting for Godot Powell to start taking action instead of jawboning.
(Excerpt) Read more at confoundedinterest.net ...
So my 5.9% Social security inflation raise is still -1.1% and shrinking?
US Inflation Jumps To 7% YoY As Real Hourly Earnings Growth Crashes To -2.32% | |
Definitely a cause of inflation
Let’s go, Brandon.
...the Taylor Rule model suggests a Fed Funds Target rate of … 17.84%. Bear in mind that the current target rate is 0.25%.
—
The Fed, owned by the big banks, will be hard pressed to raise rates to 0.84%, never mind 17.84%
That is right and the sad fact is..I doubt prices will ever go back down. At least most of them.
They cant raise it much. They do and the largest expense on the federal budget will be the payment just for the interest on the debt.
The OBodyMortgagers.
#1 “industry” of this age: slavery.
The Millstoners
no, no, no...…
you see the economy is so incredibly strong, consumers are swimming in money and demand is through the roof. that’s why shelves are empty and inflation is soaring...….
And with 7% inflation, the Taylor Rule model suggests a Fed Funds Target rate of … 17.84%. Bear in mind that the current target rate is 0.25%.
Not sustainable. Jimmy Carter on steroids.
Wages on the low service sector end sky-rocketed and yet they are actually earning less dollar for dollar. Exactly what many said would happen.
I lived the Carter years and the Reagan years. Bought my first home with an interest of 13% and thought that was a great rate at the time.
Basically it is now costing the average person 20% more to maintain their life-styles.
The biggest difference I see is the ready availability of jobs and no workforce. During the Carter years, there we no jobs. This dysfunction warns of something seriously wrong in the economy and it is not a wage issue.
Second question: Look at the linked Table A-1. Dec. 2020 vs 2021. Notice anything odd? https://www.bls.gov/news.release/empsit.t01.htm
Correct because the labor shortage has forced employers to increase wages considerably and once given it’s almost impossible to take away so those additional costs are basically locked in until the next severe economic downturn.
Yep, the Rats hated Trump so much that they we3e completely willing to destroy the country in order to wipe out his policies.
Labor is a small component of most retail prices. Labor has been undervalued in the USA for decades. Labor could double and prices for DURABLE mass produced goods, food and services like retail/restaurants would not budge up much.
The Fed, owned by the big banks, will be hard pressed to raise rates to 0.84%, never mind 17.84%
**************
I see three raises max over the next few months. Powell owes Biden for re-nominating him and the Fed will want to avoid appearing to interfere in the 2022 election. He also knows if the market plunges there will be a negative wealth effect which could reduce consumer spending. For those reasons he will, if inflation persists, try to rein it in by other means and try to get into November before resuming rate hikes. JMHO
If they raise it much, it will crush the housing market because no one will be able to afford a home.
Re: 15 - And there’s research that stringy suggests that your point is correct.
eheh, that was my first thought too.
You summed it up perfectly.
The Democrats have done irreparable, lasting damage to the country.
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