It's interesting that the article is quick to blame "increased labor costs" and low unemployment (???) for the price hikes but then doesn't explain why prices for some items actually went down again. Meanwhile overall wages don't seem to track inflation.
It reads like some businesses had to increase wages to retain employees but this doesn't seem to be causative as these employees were asking for higher wages because of the increased cost of living, not the other way around.
It’s so weird to me that the labor story seems to leave out that 1m people died in the pandemic and also the largest generation in history is retiring.
> Johnson took excess deaths and COVID deaths by age and applied labor force participation rates by age. And he got 300,000 workers who died as a result of COVID. Add that to the long-haul workers, and we’ve lost 1.9 million workers — or 18% of currently unfilled jobs.
Note: most of those long-haulers have recovered, but I suspect that a great many of those didn’t recover back to their original job. That means during the time they were disabled, they had to be replaced, possibly at a higher wage.
I am pretty dubious of this based on the age distribution of deaths (most were over 65 and 50-65 is the only bracket with large numbers who werent below retirement age--average is 61) but thank you for providing a counter argument with data.
Long COVID would, though. And if people who would mostly have been retired or lower productivity are more likely to die and children don't contribute to the labor force in most of the US, long COVID would affect working age people primarily, no?
That data come from surveying people directly, not data aggregated through medical professionals. So no, your supposition is incorrect. Transgender people really do report a 4x higher rate of severe long covid symptoms as "cisgendered" people. That's according to their own answers to surveys, not according to doctors.
If you think the result is anomalous, then explain why transgender sufferers of severe long covid are more likely to respond to surveys than any other sufferer of severe long covid.
Response to hnbad's flagged response: "people who believe long COVID is a thing are more likely to seek out a long COVID diagnosis whereas those believing it's not a thing are more likely to "push through" and remain undiagnosed even when their condition may be severe and debilitating."
Real and earnest "severe and debilitating" afflictions aren't something you can successfully "push through" and remain productive with. If you can push through them, and evidently most of the working class can, then at the very least it's certainly not as severe and debilitating as advertised. Some people may earnestly have some mild lingering fatigue issues, as is the case after any viral infection, but that's about it. However that doesn't make severe disabling long covid, the sort that would actually hurt the economy, a hoax. There is a difference between a hoax and delusion. A hoax is a falsehood promulgated by somebody who knows it isn't true. Long covid is a hysteria promulgated by people who earnestly believe it is true, to their own detriment.
Outside of software developers (more specifically, software developers in the Bay Area), most people work waaaaay past 50. At least 10 more years, and more than a few are probably going 15-20.
I'm going to guess you didn't read your own sources
> The raw death count gives us a sense of scale: for example, the US suffered roughly 470,000 excess deaths in 2020, compared to 352,000 confirmed COVID-19 deaths during that year.
How is that relevant to how many people died of covid? We have pretty clear metrics of that, 1.1m. Excess deaths counts covid plus adjacent deaths due to avoiding care, poorer care delivery, and other confounding factors, as well as reduction in deaths due to less driving, risk taking, etc. We typically use excess deaths to measure in countries that were unable or unwilling to actually accurately report their death counts.
This statement is at such odds from reality it actually makes me curious. You are off by a factor of 20x. Do you think that you are knowledgeable about the events of the pandemic? How did you get your news about it?
Its made all the more puzzling by the fact that your own source has the correct figures.
> It's interesting that the article is quick to blame "increased labor costs" and low unemployment (???) but then doesn't explain why prices for some items actually went down again.
I don't really have a strong opinion on the veracity, but I think the guy being interviewed is trying to provide an explanation for why restaurants specifically have 4x more MoM inflation than groceries. I don't think he's making an overall claim about the cause of recent inflation.
As far as the relationship between increased labor costs and low unemployment, lower unemployment gives workers more opportunities to vote with their feet and gives unionized workers more bargaining power.
> It reads like some businesses had to increase wages to retain employees but this doesn't seem to be causative as these employees were asking for higher wages because of the increased cost of living, not the other way around.
This is backwards. No business increases wages because employees ask for it. Employees always ask for higher wages. Wages go up when you can't find workers for lower wages.
Who's achievement? This was a supply chain shock caused by COVID and war in Ukraine, then piggybacked by corporate collusion / greedflation.
Taising of interest rates achieved nothing, possibly made it worse by decreasing money supply avaliable to address supply chain bottlenecks. There is a good nimber of economists that support this viewpoint:
We are entering an era where economic dogma is anti-physical - when there is a shortage of energy our governments hike interest rates instead of adressing root of the problem, like building power plants or improving efficiency.
Biden is likely to go down in history as one of the great modern presidents. It's easy to do well when dealt a good hand, but it takes real skill to force a draw when dealt a losing hand.
I'm probably biased but in 2008 I couldn't get a job (as a junior), dropped out of college, defaulted on debt(s), and joined the military during a time of war. I watched as friends/former colleagues/neighbors lost their homes, those who didn't went through an utter spiderweb of decision making of who to send the check to. For me, personally, it's hard to compare this to 2008/9. As far as I'm aware, greedflation (what you're describing) is what happens during a recession and a soft-landing is still a recession.
> Never thought about how confusing it would be when banks start playing musical chairs with your mortgage.
I think Dodd-Frank addressed this, but maybe it was some legislation after. I think they made ACH details transferrable and padded payment windows iirc.
> But the more people that realize that, the less soft the landing might be.
Yeah, definitely, but that's why they crank the interest rate through the ceiling. People that are cash heavy could come up quite a bit if left uninhibited. Of course, they can still do that, but not in a property acquisition kind of way.
This is a very layman's understanding, so take it with a grain of salt.
If you have a ton of cash on hand when markets go to shit and interest rates go through the roof you suddenly have something no one else does: cash on hand that was traded when that dollar was worth less. When you buy property or stock with that money, you've effectively bought it at a hefty discount. When the markets and interest rates normalize again you stand to make huge gains.
They lock up financing to put a cap on growing inflation, but that same cap stops people from taking advantage of the market and thereby continuing inflation through a new avenue.
Interesting. What you say is true, but there is an opposing force. If someone has cash on hand when interest rates spike, they can buy when everyone else has a much harder time getting loans. So this makes things appear cheaper because there are less buyers on the market.
BUT the opposing force is the inflation that originally justified the spike in interest rates. That cash they are holding is simultaneously worth less due to the devaluing of the dollar, but also enables you to operate when others have run dry.
EDIT: so I guess there is a distinction in the value of the dollar when you are using it to buy large things that require debt vs the day to day little items. Because the little items will get inflated easily as everyone allocates their limited capital to food and fuel. But the real estate market will stagnate as no one can trade houses around in this environment.
I agree with what you put here; I think there's also a "threshold" of cash on hand you have to have in order for it to be useful in the ways we're describing. It's likely a rather large sum.
CPI adjusts prices on a per weight or per volume basis. Shrinkflation is definitely captured in the official metrics. The hidden inflation is in the service industry where it is impossible to capture whether or not your dentist gives you a toothbrush now or not. Or if you get a free smile with your Big Mac. This is what I call skimpflation but I think some people use it interchangeably with shrinkflation. Inflation is also always "constant" in the sense that the government wants to target a constant 2% inflation rate. I think you meant to say "constantly high".
Regardless, I agree with your sentiment that inflation is still above the 2% target and may prove to be sticky as incomes need to rise to meet the inflation we saw over the past 3 years. My prediction is that we'll be at 5% rates plus quantitative tightening for at least another full year. If they start doing rate cuts, I think we'll start going above 3% inflation and then the Fed has the tough job of taking the fruit punch bowl away from a market which thinks the party is just getting started. Going into an election year, that becomes politically difficult regardless of what they do.
You are correct. What I was trying to drive at is that utility for many things does not really get inflated/deflated on pre-defined metrics. In your iPad example, what's the inflator coefficient to use when going from TouchID to FaceID. It's subjective.
I genuinely don't understand the doomslinging impulse on this. It's like people actually want inflation to be worse than it actually was, as if it makes them Right on the Internet or something. But it's wrong. You're wrong.
The only time you've "seen this before" would have been in the 1970's and inflation then was much higher for much longer than we've endured in recent years.
Am not into expensive things, but I do enjoy a pack of jarlsberg with smoked salmon once a week. Before the pandemic, I splurged $20 for a satisfying portion of both. But nowadays the portion size has gotten really small for the same price :(
I picked up some staples today and for some items prices almost doubled even at Costco and the price is stuck there now, the three pack of half gallon lactate free milk and two dozen white eggs.
Yield curve inversions are not excitable attention-seeking pundits, but an emergent measure of the market as a whole. They are also not 100% accurate... but they're fairly accurate. There are also sensible reasons to believe they are indeed causally connected to some reasonable degree, so it's not throwing chicken livers and reading the future either.
It's best not to conflate actual measures being tentatively interpreted on the basis of a century of history with some guy with a camera and a YouTube channel. They're not even the same category of thing, as pondering that for a moment will show.
> It's best not to conflate actual measures being tentatively interpreted on the basis of a century of history with some guy with a camera and a YouTube channel
The commenter upthread "penciled in" a recession for Q3 of next year and cited your favorite metric. I think that's closer to a TikTok hit than a "tentatively interpreted" bit of pop economics.
But to treat with your actual point: it still sounds like bunk to me. I had to dig, but FRED does indeed have a chart for this (https://fred.stlouisfed.org/series/T10Y2Y) and sure, if you squint, it looks like it predicts. Except that the time between an inversion and the predicted recession is all over the map. It looks like the 1988 recession took two years (!) to actually arrive, while the 1980 recession jumped the gun. And 2008 seems to refute the theory, because the inversion had corrected itself almost a year before the financial crisis (which pretty clearly had nothing to do with bond rates anyway). Also the magnitude of the inversion doesn't seem to have any correlation with the recession, the inversion swung way lower in the late 70's than it did any other time, but that recession was actually pretty mild. And the inversion of 2006 was barely an inversion at all.
Yeah, this is wrong. No serious economics seem to be pushing this.
We have an inversion right now because the Fed has been swinging its hammer like crazy and the market is responding to the fact that they think rates are going to drop rapidly RSN (which is a higher risk for longer term bonds, obviously). That explanation makes a ton more sense than some handwaving about a "predictive metric".
There is a bill in the works right now to keep mutual funds and similar from just scooping up every house they can for rent, I imagine there are very few actions that could make more of a difference.
Housing costs are driven by local supply issues vastly more than big national buyers. They're just swooping in because the massive undersupply has made them a good asset to own in the past 15 years.
Building more housing. Building a lot more housing would make a much larger difference.
In terms of specific government actions, that's upzoning all residential areas and approving plans by default with chance for challenges if they fit within established (reasonable) requirements.
Are the mutual funds immune from supply & demand economics or are they just taking advantage of a shortage that means real estate prices go inexorably up? Maybe we could just increase supply and then the mutual funds won't be so interested in buying up the supply. Although I don't know how that's bad to begin with -- it's not like everyone wants to own their own home.
It reads like some businesses had to increase wages to retain employees but this doesn't seem to be causative as these employees were asking for higher wages because of the increased cost of living, not the other way around.