We who pay attention to economic details are not normal

Fed policymakers currently think inflation, while still present, is much improved. 

They are looking at inflation’s growth rate, which (using CPI) has indeed fallen from 9% in June 2022 to a still-high 3.2% now.

The average person, however, notices their grocery bill is quite a bit higher than it was two years ago. The fact it’s rising somewhat slower than it was is little comfort. 

There are hundreds if not more of mostly young ladies on TikTok complaining about not being able to survive on their income. 

Rather than smiling (as Boomers sometimes do to “younger” generations), pay attention to what they are complaining about: food, rent, energy, transportation.

We who pay attention to economic details are not normal. Most people don’t know what “CPI” stands for, nor do they know who the Fed chair is or why it matters what the Fed does to their money. They naturally have other things on their minds.

This matters because the average consumer doesn’t look at benchmarks. They perceive inflation when it starts having visibly large and/or frequent effects on their lives. 

This is why food and gasoline prices matter so much; people buy them regularly enough to notice higher prices. Their contribution to inflation perceptions is greater than their weighting in the benchmarks.

John Mauldin 29 March 2024

https://www.mauldineconomics.com/frontlinethoughts/monetary-dilemma

Inflationen i USA sjunker, vilket gläder ekonomer.

Prisnivån stiger, vilket bekymrar alla andra.

https://englundmacro.blogspot.com/2024/02/trots-starka-ekonomin-valjarna-sviker.html