Economist Alan Blinder has a commentary in the Wall Street Journal (!) of all places — he has noticed that inflation has mostly fallen back to pre-pandemic levels in the last half of 2022. We’ve been talking about this at Daily Kos now for several months. I don’t subscribe to the WSJ since I don’t want to fund Rupert Murdock in any way, but here’s the WSJ link if you must click. But here’s money quote with everything you need:
Maybe we should start the new year with some good news: Inflation has fallen dramatically. No, that’s not a prediction; it’s a fact. With one month remaining in 2022 (in terms of available data), inflation in the second half of the year has run vastly lower than in the first half. In fact—and this is astonishing—it’s almost back down to the Federal Reserve’s 2% target. Even more astonishing, hardly anyone seems to have noticed.
The next CPI inflation report (for December 2022) will be out next Thursday, January 12th. At that time, most media will continue to report that inflation “is” or “was in December” about 6 or 7% (the year over year figure), although actual month-by-month inflation has been much lower since last June.
Whether the Fed’s recent interest rate hikes had anything to do with it or not (I think mostly not), inflation has already fallen to near the Fed’s target rate of 2%, and even wages are moderating in the most recent data.
Here’s a good blog from EPI on today’s jobs and earnings reports. I don’t do Twitter links either, but here’s a screen shot:
There’s no reason for further interest rate hikes that will hurt borrowers and small businesses. Disclosure: my family runs a small business that has to borrow for inventory purchases at well above the Prime rate, which is currently 7.5%. Interest rate hikes suck for businesses trying to restock after the pandemic.
