Inflation for the stuff average consumers buy isn’t super-low, but it isn’t high either and it appears to be stable or declining for those items. People do all kinds of weird things with the data–there is general CPI, there is “core” CPI and there is “supercore CPI”. And the CPI is really a collection of surveyed prices from urban areas around the country. Reminds me of health care in that it would seem better to get data from Amazon, Walmart, Target, the large grocery stores and other large retailers and service providers and see what they are saying about price trends. Or from the credit card and digital payment vendors or banks. In any event, the trends are more positive than people have expected with all the tariff chaos. That may be because the money supply is pretty flat, and growth in that number usually is tied to higher inflation. (BLS Release)
The month-over-month growth in May was .1% and 2.4% for the year-over-year measure. That was lower than expected and the “core” and “super-core” were also lower than expected. Shelter or housing costs rose .3% in May as did food. Energy was down 1%, which is a big drop for a month. Items that rose included medical care, car insurance, furniture and education. Items whose price declined include air fares, used and new cars and clothes.
And here is another little nugget worth hanging onto–inflation is highest in Democrat-run states and lowest in Republican-led ones. Funny how that works, I have been saying for years that a Dem party slogan should be “Democrats, making everything you need more expensive.” (ZH Post)
“That may be because the money supply is pretty flat, and growth in that number usually is tied to higher inflation.”
Money supply isn’t tied to higher inflation; money supply is higher inflation (by definition).