Staff Reports
The Bureau of Labor Statistics just dropped a bombshell: inflation fell by a measly three tenths of a percentage point to 3.1% for the year ending in January. And guess what? Economists had predicted it would cool to an even lower 2.9%. Ha! Yeah, not even close, folks. In fact, “core inflation,” which doesn’t even count wacky things like food and energy prices, held steady at an eye-popping 3.9%. Can you believe it? The nerve of these numbers!
And it gets worse! On a month-to-month basis, inflation decided to rise by a solid 0.3%, while core inflation ticked up by a whopping 0.4%. Ouch! This is not the kind of news President Joe Biden wants to hear right now. His White House has been parading these tiny declines in inflation around like they’re some kind of big win for “Bidenomics.” Yeah, right. Keep dreaming, Biden.
The January CPI is another example of how you go wrong when you focus on the change in 12-month overall CPI.
12-month inflation fell from 3.3% to 3.1%.
BUT, this is just because the very high Jan-2023 dropped out and was replaced by the merely high Jan-2024. pic.twitter.com/fvGa6Fy9Js
— Jason Furman (@jasonfurman) February 13, 2024
But wait, there’s more! The big shots at the Federal Reserve were crossing their fingers for some good news, hoping to start easing up on the ol’ monetary policy. Well, tough luck, Fed! This higher-than-expected reading means their plans to cut interest rates might be put on ice for even longer. Dan North, a senior economist, ain’t sugarcoating it. He says the Fed will probably hold off on lowering rates. And it’s not looking great, folks. Inflation may not be taking a nosedive any time soon, and the economy, apparently, is just peachy.
Let’s not forget who’s to blame for this mess. Republicans are pointing fingers at all the pandemic stimulus spending and those super low interest rates for lighting the inflation fire. But the Democrats, oh those guys, they’re singing a different tune. They’re blaming it on those pesky supply-chain problems and insisting that it’s not just the U.S. – everyone’s feeling the pinch of inflation. Classic Democrats, always trying to share the blame.
But hey, there’s a silver lining, right? It seems there’s hope that the Fed can pull off a “soft landing.” That’s code for getting inflation back to a normal level without crashing the entire economy. Let’s keep our fingers crossed for that one.
Here’s the kicker, though. While the so-called experts at the central bank are talking about three rate cuts this year, the investors are saying, “Nah, we’re betting on even more than that.” Looks like someone’s not on the same page.
Now, let’s talk about some good news. The economy sprang back to life and added a whopping 353,000 new jobs in January, maybe giving the Fed a smidge of breathing room in their battle against inflation. The unemployment rate? Still hanging tough at 3.7%. So, despite all the doom and gloom about inflation, at least more folks are finding jobs. Let’s give credit where it’s due, folks!
