Click on image to enlarge.
This figure shows that the PPI for final demand tracks the CPI less shelter very closely. By both measures, inflation is now very much under control. The problem is that the CPI for shelter is up 5.6 percent, so the overall CPI looks quite hot.
Some would argue that leaving out shelter is misleading because shelter is such a large fraction of the typical household budget. On the other hand, the CPI for shelter is well known to be a lagging indicator of rents by virtue of how it is constructed, and other more current series show no recent inflation in rents. This latter argument puts me in the optimistic camp on inflation.
By the way, I recently made a bet with my friend Larry Ball that the overall CPI from February 2024 to February 2025 will rise by less than 2.5 percent. I am writing the bet here as a sort of contract. We will check back next year.
The bet is for $5. That is in nominal terms. So, in real terms, I get more if I win than Larry gets if he wins.
My NPR debate on whether science is too risk-averse
This coming Tuesday at Johns Hopkins University in Baltimore, here is the event information, with three others as well. With...
Tuesday assorted links
1. AI as palm reader? 2. “why we need to train models to learn their own capabilities, and how this...
Saturday assorted links
1. Hedging the singularity? 2. Claude doing stand-up comedy, the video is AI too. 3. Thirty more lines from Empedocles...
The exposed counties (from my email)
Professor Cowen, Built a county-level AI displacement model across all 3,204 US counties. Top 5 most exposed counties are all...
