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Today's Inflation Data, A Story of Plague, War, and (the) Labor (Force) [1]

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Date: 2023-03-31  

Source: www.bea.gov -- Price index for personal consumption expenditures, accessed March 31, 2023, calculations by the author.

Good morning! The table above shows the inflation data released today, the news of which will likely be drowned out by discussions of the indictment of a Queens man. Here is a link to the source data from the Bureau of Economic Analysis. I continue to believe that the world’s inflation problem is mostly on the wane, as our economies adjust to the uneven pandemic recovery and Putin’s invasion of Europe’s breadbasket. Of course, prices rising more slowly doesn’t mean falling prices in many cases, and the pain of higher grocery bills — “food and beverages for off-premise consumption” in the table above — and rent is real. But it’s certainly no cause for panic by the Fed.

One reason for higher prices has been less commented on: the pandemic’s impact on the labor force. Whether from death, disability, or reluctant retirement (my reason), the U.S. labor force has only just recently regained its pre-pandemic size (see chart below). I personally think it’s great that wages have risen because of low labor availability in many areas and sectors. But that doesn’t relieve the sadness for those who can’t work any more due to the pandemic’s lingering health and economic impacts.

Screen capture from St. Louis Fed’s FRED data system, March 31, 2023 fred.stlouisfed.org/...

I have to take my hecking roomates out for a long walk — they’ve been very patient so far this morning as I write this — but I’ll be back around 11am EDT if there are any questions or comments to discuss.

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[1] Url: https://www.dailykos.com/stories/2023/3/31/2161277/-Today-s-Inflation-Data-A-Story-of-Plague-War-and-the-Labor-Force

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