October Inflation Flat, That's Good News, Right? RIGHT?

Happy Days are Here Again, Fuckers.

Professor Prettypaws knows his stuff. Image generated by DreamStudio AI

Inflation continued to ease in October, with no change at all in the inflation rate according to the Consumer Price Index report from the Labor Department. That’s after a .04 percent increase in September. On an annual basis, inflation is at 3.2 percent, way, way down from its post-pandemic peak of 9 percent in June 2022 and down from the 3.7 percent rate for September. Analysts had predicted a slight increase for October, but maybe they won’t gripe too much about being wrong.

A 2.3 percent decline in fuel prices were the main driver of the lower inflation rate, offsetting a 3.0 percent rise in the index for food prices, which was the slowest rate for that category since July 2022. It also helped that inflation for housing eased in November, to .3 percent, half of September’s rate. Vehicle costs also declined; new vehicles are .1 percent lower, and used are down by .8 percent, down 7.1 percent from last year. Ooh, said Dok to himself, may finally be time to start looking for a used EV if that continues!

The stock market went on a tear with the news that inflation is cooling faster than expected, because that pretty much guarantees the Federal Reserve won’t raise interest rates when it meets later this month. Can we say “soft landing” finally? Haha, don’t be silly, you can’t say we’ve avoided a recession until months later when the financial press is fretting about a recession again. Those are the rules.

The “Core CPI,” which excludes volatile stuff like the prices of food, fuel, and ketchup flung at Mar-a-Lago walls, rose at its slowest rate in two years, .2 percent for the month, annualized to 4.1 percent annually. That too continues a downward trend that’s been going since April, and even the terminal pessimists at CNBC suggested the months-long slowing of core CPI is a good thing, even if it remains above the Fed’s 2 percent target, because “Fed officials have stressed that they want to see a series of declines in core readings,” and that’s what we got.

Is it time for the mandatory, mixed-results entrails-reading of a randomly chosen economist? This is the fifth paragraph, so yes, that feels about right. We’ll let CNBC go first:

“The Fed looks smart for effectively ending its tightening cycle as inflation continues to slow. Yields are down significantly as the last of investors not convinced the Fed is done are likely throwing in the towel,” said Bryce Doty, portfolio manager at Sit Fixed Income Advisors.

We had to read it a couple times there, but the thing about investors “throwing in the towel” is actually good news that translates to the pessimists are giving up on expecting more rate hikes. You are welcome.

The New York Times economist of the month was more straightforward, and good for them:

“It does suggest that inflation is continuing to slow down,” said Gennadiy Goldberg, a rates strategist at TD Securities, noting that while it was just one report, it was an encouraging one. “It is being driven by multiple things, not just one quirk.”

In a White House statement, President Joe Biden put on a brave face in light of the good economic news of recent months, pointing out that the declining inflation rate has been accompanied with strong economic growth and 21 months of below-four percent unemployment.

As the economy continues to get better, Biden somehow managed to keep his chin up, saying,

“I’m working to get results for the American people and it’s happening — and I’m not going to let up for one second. I’m fighting every single day to continue lowering costs for hardworking families so they have more breathing room — from eliminating costly junk fees on air fares and event tickets, to cutting prescription drug costs and health care premiums, to reducing energy costs.”

You really have to admire how he keeps his cool like that, whistling past … whatever a graveyard is, we’re tired of this bit anyway. The economy is good and if Biden wants to get a little annoyed that he’s not getting the credit, he has every reason to. Happy Days Are Here Again, Fuckers.

[BLS / CNBC / NYT]

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