U.S. Core Inflation Expected Over the Next 21 Months

U.S. Core Inflation Expected Over the Next 21 Months This chart shows the U.S. core inflation expected over the next 21 months. It has been quite accurate for more than 20 years. M2 velocity year-over-year leads U.S. core inflation by 21 months (R² = 0.61 since 1996).  See also “Where Does Inflation Come From?” and “How to…

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

ISM Manufacturing Index vs. U.S. Core CPI This chart shows that ISM Manufacturing Index leads U.S. Core CPI by 24 months. See also “ISM Manufacturing Index vs. S&P 500 Index” and “U.S. Core Inflation Expected Over the Next 21 Months.“ Click the Picture to Enlarge

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 =…