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(CNBC)   Inflation data showing that Fed rate hikes might be doing the trick to lower prices. Or, companies grew a heart and stopped gouging consumers. We'll let you decide   (cnbc.com) divider line
    More: Spiffy, Personal consumption expenditures price index, Dow Jones Industrial Average, Inflation, Consumer price index, Inflation rose, price increases, Monetary policy, morning's data  
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268 clicks; posted to Business » on 01 Dec 2022 at 11:23 AM (9 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2022-12-01 9:53:00 AM  
Alternate hypothesis: in the current high-employment economy companies realized that if they continue to price gouge, employees have the wage power to demand corresponding raises, so it's not going to do them any good in the long run.

Better in fact for them if they can say "look, inflation is back down!" before the next round of pay negotiations, and hold on to the gains they made in the meantime when they raised prices but not wages.
 
2022-12-01 10:32:18 AM  

HugeMistake: Alternate hypothesis: in the current high-employment economy companies realized that if they continue to price gouge, employees have the wage power to demand corresponding raises, so it's not going to do them any good in the long run.

Better in fact for them if they can say "look, inflation is back down!" before the next round of pay negotiations, and hold on to the gains they made in the meantime when they raised prices but not wages.


Contract renewals are right now and lots of people are asking for 8-11% increases.  Anyone expecting a 8% COLA?
 
2022-12-01 11:08:33 AM  
or supply chain issues are starting to fulfill demand.  Because for some reason, I tend to think a global problem with inflation isn't the Fed's fault or cure.
 
2022-12-01 11:15:09 AM  

DarnoKonrad: or supply chain issues are starting to fulfill demand.  Because for some reason, I tend to think a global problem with inflation isn't the Fed's fault or cure.


You don't think the 0% policy which was essential in driving up the price of homes by 2-300%. Housing which contributes about 20% to GDP and rental costs which weigh heavily on inflation...

It's not everything, of course we've had supply issues for years. But the Fed rate policy and cash deployments have absolutely played a major role.
 
2022-12-01 11:29:42 AM  

NewportBarGuy: DarnoKonrad: or supply chain issues are starting to fulfill demand.  Because for some reason, I tend to think a global problem with inflation isn't the Fed's fault or cure.

You don't think the 0% policy which was essential in driving up the price of homes by 2-300%. Housing which contributes about 20% to GDP and rental costs which weigh heavily on inflation...

It's not everything, of course we've had supply issues for years. But the Fed rate policy and cash deployments have absolutely played a major role.


Housing is excluded from core inflation, which is what this article is addressing.  Not poor housing policy -- which predates the recent spike in consumer prices.   It's a wholly separate issue.

And I doubt what the fed is doing now is going to address home prices at all.  That has to do with policy, and taxation.  Real estate should depreciate in value, not go up in price.  But you have a whole of people with excess money using real estate in the same way they use the stock market.
 
2022-12-01 11:35:54 AM  

DarnoKonrad: NewportBarGuy: DarnoKonrad: or supply chain issues are starting to fulfill demand.  Because for some reason, I tend to think a global problem with inflation isn't the Fed's fault or cure.

You don't think the 0% policy which was essential in driving up the price of homes by 2-300%. Housing which contributes about 20% to GDP and rental costs which weigh heavily on inflation...

It's not everything, of course we've had supply issues for years. But the Fed rate policy and cash deployments have absolutely played a major role.

Housing is excluded from core inflation, which is what this article is addressing.  Not poor housing policy -- which predates the recent spike in consumer prices.   It's a wholly separate issue.

And I doubt what the fed is doing now is going to address home prices at all.  That has to do with policy, and taxation.  Real estate should depreciate in value, not go up in price.  But you have a whole of people with excess money using real estate in the same way they use the stock market.


My house probably costs $5,000 to build 70+ years ago. Do you think it's value is less than $5,000? The county tax assessor certainly doesn't think so, neither did the appraiser I hired when I bought it.
 
2022-12-01 11:36:50 AM  
I'm going with companies realized the high prices might cause people to cut back on holiday spending.
 
2022-12-01 11:39:04 AM  

DarnoKonrad: And I doubt what the fed is doing now is going to address home prices at all.


It pushes up mortgage rates, which reduces the buying pool which results in lower prices, for the most part.

At least, that's what they are trying to do.

Rent is factored into inflation and rent has gone up at the same rate and more than housing has.
 
2022-12-01 12:17:24 PM  
Inflation math is all stupid since it was depegged from minimum wage.  "Massage the numbers till it works" is an awful reality to live in, as it seeks to excuse and deflect current problems.  No progress.
 
2022-12-01 12:28:36 PM  

Fooshards: Inflation math is all stupid since it was depegged from minimum wage.  "Massage the numbers till it works" is an awful reality to live in, as it seeks to excuse and deflect current problems.  No progress.


It really is insane... Economics is just voodoo and junk science.
 
2022-12-01 12:38:51 PM  

Fooshards: Inflation math is all stupid since it was depegged from minimum wage.  "Massage the numbers till it works" is an awful reality to live in, as it seeks to excuse and deflect current problems.  No progress.


I agree that inflation numbers can be very skewed and they definitely leave out some important factors, but are you saying there was a time that the minimum wage determined inflation? Because, no.
 
2022-12-01 1:13:59 PM  

Farkn Yaj Yenrac: Fooshards: Inflation math is all stupid since it was depegged from minimum wage.  "Massage the numbers till it works" is an awful reality to live in, as it seeks to excuse and deflect current problems.  No progress.

I agree that inflation numbers can be very skewed and they definitely leave out some important factors, but are you saying there was a time that the minimum wage determined inflation? Because, no.


No, there was a time when the inflation was what pegged minimum wage, by answering the question "The wage [variable] needs to be set to $x in order to account for the measured price of food,housing,etc [inelastics]" implying we were doing the research of the actuals; to obtain an answer to the question of how much dollar is needed.

Now, the question is phrased more as "Can we find some collection of the measured price of inelastics, or scrutinize the math of the equation, to be able to say that someone could technically make it off their $x wage".  Now the research is flipped, and is on the assumption that there are enough dollars, they just need to be divided better.

There's grains of truth in both, but only one of them is appraising the situation in a genuine way
 
2022-12-01 2:22:23 PM  
It's interesting how all the inflation measures peaked a week before midterm elections....and then all the good news came a week later.

Almost as if it were being manipulated.
 
2022-12-01 2:32:50 PM  
Republicans haven't even yet taken over the house and already they've stopped inflation.
 
2022-12-01 7:25:08 PM  

HugeMistake: Alternate hypothesis: in the current high-employment economy companies realized that if they continue to price gouge, employees have the wage power to demand corresponding raises, so it's not going to do them any good in the long run.

Better in fact for them if they can say "look, inflation is back down!" before the next round of pay negotiations, and hold on to the gains they made in the meantime when they raised prices but not wages.


Orrr.... Now that corporate thieves realize thst the sweet, sweet tax breaks they were gonna get are now gone after the mid-terms, it's now back to selling their supply at regular pricing to ger rid of back stock.
 
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