Consumers Price Index Rose 0.3% and The Sky Hasn't Fallen! (Forecasting and Focus)

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in January (up 3.1% overall over 12 months). The stocks took a beating, the dark clouds came forward, and people ran back to their villages to shutter themselves inside and stay safe! Ok it wasn't that bad. Short term traders, economic hyper focus, and of course other issues that sort of keep us on the edge of our seats. Its mixed information and data that doesn't truly lean up or down. I would think more up yet inflation is still eating at people's paychecks and some economists have said we might experience a recession this year. A few countries are cutting their growth forecasts. We may be lucky and not have recession at all. Perhaps we might have an economic expansion.  We can try and forecast but often one only truly knows in hindsight in this current market. Its almost always a situation of more data needed but we have to do the best we can with the tools we have, and what we know right now, and what we may have learned from past (Interesting article in the Atlantic Convincing Economy related to economic feelings.)

One might wonder if the infrastructure improvements are heating up core inflation and what that heating up means for the speed of the economy, energy, manufacturing, and technology on a core transactional level. One would sort of need to look at each aspect of the index and its definition to grasp how the information was drawn. Definition Core CPI  Consider there appears to be a lot of mixed theory on Core Inflation it general indicates a potential issue but what that issue might be is still unknown. It may not all be bad if its a short term market adjustment. Core Inflation and GDP Relationship. 

Keep in mind that energy is going down but core inflation is going up. Just an interesting observation. What is Core Inflation Fed Reserve of San Fran 04' (old article)

(The theory I'm working on looks at things from a transactional speed-value-cluster level in terms of adaptation. It has been sort of ballpark correct but its not really worth anything yet. It might be someday if it gets developed. Maybe sell it on eBay for like $5 as a self-published book and make someone else rich! With spelling and grammar errors included for free! Also why we need to rebalance how things are done to ensure opportunities and maximum economic engagement. Strengthening the middle, entrepreneurial, and creative classes helps. I do it because I find problems interesting not because of I get a tangible benefit from it. Just saying :))

This is a great article and I think the author brought forward a solid analysis. I have read a few of these articles and like them because they are informative.

Beneath the Skin Wolf Street

 (With research one must seek out the emerging news and see how that fits with a model based on more historical controlled hindsight analysis that seeks to isolate causality. News leads the discussion on important topics and research determines the strength of possible associations. Read on a topic widely and you get an emerging literary study in real time that leads to insight into what some of the involved factors might be. Businesses must have up-to-date emerging knowledge to be nimble. Correlation and Casual. )

(As a sort of funny notice, look at the jump in auto insurance! I always wonder if my car insurance is market rate? 🤔😭)

Another article I recommend reading is Inflation Won't Go Away because it does help us put in perspective that inflation is still moving in a downward trajectory overall. There are bumps, blimps, and oddities that happen during that process. Sometimes we focus exclusively on small adjustments and then assign bigger importance then needed. Thinking trends with multiple data points. While we might create a theoretical understanding that may explain inflation, we must also take a wide angle lens to put those changes in context. My suggestion overall is look at the tree and then step back and look at the forest. If you also have the ability step back again and look at the whole ecosystem. Each focus level teaches you something different. 

The BLS publication CPI January 24,

"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in January on a seasonally adjusted basis, after rising 0.2 percent in December, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.1 percent before seasonal adjustment. 

The index for shelter continued to rise in January, increasing 0.6 percent and contributing over two thirds of the monthly all items increase. The food index increased 0.4 percent in January, as the food at home index increased 0.4 percent and the food away from home index rose 0.5 percent over the month. In contrast, the energy index fell 0.9 percent over the month due in large part to the decline in the gasoline index." (BLS, Jan 24', pg1)