Core CPI for the month of November came in high again (but a touch below expectations). Here are the annual rates: 1 month: 3.5% 3 months: 3.4% 6 months: 2.9% 12 months: 4.0% Note, core PCE (de facto Fed target) likely will be ~2.5% for last six months annualized. Economists look at core because it is a much better predictor of future inflation. But the inflation that matters to people is overall and that was close to 0% for the second month in a row. And 3.1% over the last year. Back to core, now breaking out core goods and core services. Goods prices have been falling (supply chains etc.) but core service price growth has still been faster than is consistent with the Fed’s inflation target. Shelter inflation has been a big part of the story. It has come down a lot from its highs. But not nearly as much as some were hoping. People who follow closely think further slowdowns coming but probably not nearly as much as “new rent” indices would suggest.
- Date Posted:
- December 11, 2023
New research by federal government economists Gerald Auten and David Splinter show that after making many sensible corrections and adjustments and considering taxes and government benefit programs, top income shares are now about the same as in the early 1960s. When one also considers strong evidence that the top one percent group is not static, but that there is substantial mobility into and out of various income groups over time, and that, contrary to Picketty’s result that the after-tax and transfer income of the bottom half of the income distribution remained unchanged, but that, rather, according to Auten and Splinter, it increased by two-thirds, similar to the higher income groups, the case for yet more redistribution efforts, such as increasing Social Security benefits, is considerably weakened.