Today’s headline from Yahoo Finance reported that wholesale inflation numbers were TWICE the “expected” rate and that core CPI, excluding food and energy, TRIPLED:
What’s amazing to me is that they report this as a “surprise,” and something “unexpected.” Come on – who didn’t expect this? The behavior of economists is like the fake surprise you show when you know your friends are planning a surprise birthday party but you find out about it early. You still have to put on a good show because you didn’t want your friends to know that YOU knew all along.
On the other hand, if this is truly a surprise to economists, then we need to hire some new economists. Somebody around here is TOO versed in smoothing data and creative forecasting. Anyone who bought literally ANYTHING in the last four years, whether it’s something as obvious as buying gas ( over $4/gallon recently) pasta ($1.25 per pound now up from 50 cents just a few years ago), or even pizza (cheese and dairy prices are WAY up) at the local pizzeria, knows there is major inflation in our economy.
What’s also amazing are bond yields and by operation, mortgage rates, staying so low. If inflation is running at 8%+ per year, would you want a TEN YEAR bond paying 3.81%? You’re LOSING PURCHASING POWER – for those of you who are economic laymen, let me just tell you, THIS IS DUMB!
Expect inflation pressures to continue, rates to rise and further pain in the housing market.
Chris Grande
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