Tuesday , October 20 2020
Home / Hale Stewart: Bonddad Blog / Consumer prices rise a “normal” 0.2% in September

Consumer prices rise a “normal” 0.2% in September

Summary:
- by New Deal democratIn September Consumer prices rose a “normal” 0.2%, the first such typical increase since the pandemic began (blue in the graph below):For the past 40 years, recessions had typically happened when CPI less energy costs (red) had risen to close to or over 3%/year. We are nowhere near that now (last 15 years shown in graph):Because wages are “stickier” than prices, typically as recessions beat down prices (or at least price increases), in real terms wages rise. That has been the case for the coronavirus recession as well:As a result, as I’ve noted for the past several months, real hourly wages for non-supervisory workers have finally exceeded their previous 1973 peak:Of course, this is also because lower wage workers disproportionately lost their jobs during the

Topics:
[email protected] (New Deal democrat) considers the following as important:

This could be interesting, too:

Tyler Durden writes Commission Changes Rules To Mute Microphones During Next Debate

Tyler Durden writes Trump Announces Sudan’s Removal From Terror List, Paving Way For Israel Peace Deal

Tyler Durden writes Supreme Court Sides With Democrats On Pennsylvania Mail-In Deadline After Justice Roberts Joins Liberals

Tyler Durden writes “WHAT THE F*CK! IM OUT”: Rapper 50 Cent Melts Down Over Biden-Harris Tax Plan, Endorses Trump

 - by New Deal democrat

In September Consumer prices rose a “normal” 0.2%, the first such typical increase since the pandemic began (blue in the graph below):


Consumer prices rise a “normal” 0.2% in September

For the past 40 years, recessions had typically happened when CPI less energy costs (red) had risen to close to or over 3%/year. We are nowhere near that now (last 15 years shown in graph):

Consumer prices rise a “normal” 0.2% in September

Because wages are “stickier” than prices, typically as recessions beat down prices (or at least price increases), in real terms wages rise. That has been the case for the coronavirus recession as well:

Consumer prices rise a “normal” 0.2% in September

As a result, as I’ve noted for the past several months, real hourly wages for non-supervisory workers have finally exceeded their previous 1973 peak:

Consumer prices rise a “normal” 0.2% in September

Of course, this is also because lower wage workers disproportionately lost their jobs during the pandemic. Until several months ago, they were buoyed by emergency Congressional assistance. One of the big mysteries in the past few months is why the expiration of those benefits has not caused a steep drop in consumer spending. Retail sales will be reported on Friday, and that is when we will know the answer for September.

Leave a Reply

Your email address will not be published. Required fields are marked *