Wednesday, September 16, 2015

August 2015 Inflation

It looks like we have more of the same.....

Both Core minus Shelter and Shelter inflation moved down on a month to month basis.  Year over Year rates continue to be just over 3% for shelter inflation and just under 1% for core minus shelter, adding up to Core CPI inflation of about 1.8%.

Core minus Shelter inflation has been running close to 1% for about 2 years now.  Except for a few months at the end of 2003 and beginning of 2004, Core minus Shelter inflation hasn't been this low since before the high inflation period of the 1970s.

On a month over month basis, Core minus Shelter inflation has now fallen for 4 straight months.

Considering the supply influence on shelter inflation, together with the very low levels and negative momentum in non-shelter inflation, I assume there will be a lot of conversation at this week's FOMC meeting about lowering interest rates in order to boost nominal activity.  It is times like these that I am thankful we have decided to manage the quantity of money through a committee of experts instead of exposing ourselves to the whims of market forces.  For all we know, without the direction of these wise people, natural forces would just be pushing us deeper into nominal stagnation....


  1. It is odd that the "right-wing" in the United States never militate against local zoning. I think there is also cause to be concerned about the scarcity of retail space aand the criminalization of push cart vending

  2. @ Ben while zoning adjustments seem to me to b as important as any plausible political change, I do not find it odd that folks who want to win take the view popular with most people, and especially the view nearly unanimously championed by the upper middle class

    there's a 6 story apartment building going up in a quaint shopping district in my town. people attend hearings from miles around to protest the proliferation of commodities meant to satisfy one of the most precious of Maslow's hierarchy of needs. the jurisdiction's city councilman will likely lose his seat

    it's as with the minimum wage: everyone knows that it probably means an extra 5 minutes per incident for granny to sit with a full diaper in her understaffed nursing home, but the policy is a locomotive, and you're with it or in front of it

    Dr Yellen seemed to acknowledge soft housing data as important

    I would hope that seeing anti trade / anti immigration / anti vaxxer presidential candidates enjoying strong positions in the poles would signal the need for further easing to raise wages, bring homeowners "above water". target Obama's approval rating :)

  3. @ Kevin your blog is awesome. I am learning so much

    1. Thank you Mortimer! Working in the contrarian trenches, the positive feedback really is meaningful to me. Thanks.