U.S. Real GDP Growth Leads Core Inflation

U.S. Real GDP Growth Leads Core Inflation This great chart suggests that U.S. real GDP growth leads core inflation by 18 months. Picture source: Oxford Economics, Macrobond

U.S. Core Inflation Expected Over the Next 21 Months (Leading Indicator)

U.S. Core Inflation Expected Over the Next 21 Months (Leading Indicator) This chart shows the U.S. core CPI expected over the next 21 months. It has been quite accurate for more than 20 years. The chart suggests that M2 velocity year-over-year leads U.S. core CPI by 21 months (R² = 0.61 since 1996). You may also…

Estimated Tariff Impact on Core Inflation

Estimated Tariff Impact on Core Inflation President Trump’s decision to increase the tariff rate will lead to a greater boost to U.S. consumer prices. Picture source: Goldman Sachs Global Investment Research

Labor Costs Lead Core Inflation by 6 Months

Labor Costs Lead Core Inflation by 6 Months Historically, U.S. labor costs have been a good leading indicator of core inflation, because when labor costs rise, companies tend to increase their prices. Picture source: Legg Mason

Why Is Core Inflation So Low Compared to Previous Business Cycles?

Why Is Core Inflation So Low Compared To Previous Business Cycles? The Consumer Price Index Less Food & Energy (Core CPI) is very low compared to previous business cycles in the US, for several reasons: – not fast-rising money supply – globalization: inflation is a global phenomenon – lack of wage acceleration – increase in…

ISM Manufacturing Index vs. U.S. Core CPI (Leading Indicator)

ISM Manufacturing Index vs. U.S. Core CPI (Leading Indicator) This chart suggests that the ISM Manufacturing Index leads U.S. Core CPI by 24 months. You may also like “ISM Manufacturing Index vs. S&P 500 Index” and “U.S. Core Inflation Expected Over the Next 21 Months.“ Click the Picture to Enlarge

U.S. Core PCE vs. Fed Target

U.S. Core PCE vs. Fed Target The U.S. core personal consumption expenditures price index, which excludes food and energy, rises to 1.6% in June. Inflation trending back up toward the Fed’s 2% target is good news. You may also like “U.S. Core Inflation Expected Over the Next 21 Months.”

How to Get Inflation?

How to Get Inflation? Mainly, inflation comes from excess money supply growth. There is too much money in the system chasing too few goods and services. Nominal GDP = M x V = P x T M = quantity of money V = velocity of circulation of money P = level of prices T =…

Where Does Inflation Come From?

Where Does Inflation Come From? Mainly inflation comes from excess money supply growth. There is too much money in the system chasing too few goods and services. Over the long term, Nominal GDP = Money Supply x Velocity of Money = Inflation + Real Economic Growth “Inflation is always and everywhere a monetary phenomenon.” –Milton Friedman. You…