If you read the information on some of the financial sites, you might get the impression that a booming economy with low unemployment and some moderate inflation is horrible news that might cause the Federal Reserve to tighten up the money supply.
The CPI numbers are coming out later today d many are predicting they will be the highest in 40 years. That sounds a bit ominous but even if they are they will be no where near where they were in the early 80s.
I'm not convinced inflation is a real problem and since we are adjusting social security benefits by 5.9% w so be able to handle the increase. Two of the drivers last month were energy (30%) and meat (11%), particularly beef. Both of those were related to specific issues that at least to me seem to have eased a bit , although prices go up faster than they come down.
We are building in inflation with a tight labor market and a new way of doing business. Certainly, many businesses, especially in those providing services, have had to increase costs because of Covid prevention measures. I don't know what the full impact of this will be, but it won't be more than the market will bear, or they will go out of business.
It is very hard to predict today's number since the month of November seems like a transition month. It started out with increasing energy prices but ended up with decreasing ones. There are still some supply shortages and as I pointed out some increased costs related to preventative efforts.
I know that much of our financial press will paint the blackest picture they possibly can. There has been a tremendous economic recovery but the financial press sees a dark lining to every silver cloud.
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