{"id":26806,"date":"2017-10-13T20:16:07","date_gmt":"2017-10-14T01:16:07","guid":{"rendered":"http:\/\/olduvai.ca\/?p=26806"},"modified":"2017-10-13T20:16:07","modified_gmt":"2017-10-14T01:16:07","slug":"yellen-was-right-transitory-factors-of-low-inflation-are-reversing-with-much-more-to-come","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=26806","title":{"rendered":"Yellen Was Right: \u201cTransitory\u201d Factors of \u201cLow\u201d Inflation Are Reversing, with Much More to Come"},"content":{"rendered":"<header>\n<h3 class=\"entry-title\"><a href=\"https:\/\/wolfstreet.com\/2017\/10\/13\/yellen-was-right-transitory-factors-of-low-inflation-are-reversing-with-much-more-to-come\/\">Yellen Was Right: \u201cTransitory\u201d Factors of \u201cLow\u201d Inflation Are Reversing, with Much More to Come<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>What\u2019s Boiling Beneath the Surging Inflation?<\/strong><\/p>\n<p>Consumers are going to shell out more money for the same stuff, that\u2019s for sure.\u00a0Inflation as measured by the Consumer Price Index jumped 2.2% in September compared to a year ago, the Bureau of Labor Statistics reported this morning. All fingers pointed at energy costs: the index\u00a0 jumped 10.1% year-over-year. Within it, \u201cmotor fuel\u201d prices (gasoline and diesel) jumped 19.2%.<\/p>\n<p>Food prices rose 1.2% year-over-year, kept down by prices for \u201cfood at home\u201d \u2013 the stuff you buy at the grocery store \u2013 which inched up only 0.4% year-over-year in part due to the price war currently tearing into the <a href=\"https:\/\/wolfstreet.com\/2017\/10\/03\/is-the-fresh-market-next-in-the-supermarket-meltdown\/\" target=\"_blank\" rel=\"noopener\">supermarket sector<\/a>.<\/p>\n<p>In the chart below of CPI, note the dreadful \u201cDeflation Monster\u201d \u2013 one of those rare and brief occasions in the US when the purchasing power of wages actually rose just a tiny bit on a year-over-year basis. It was caused by the energy bust. And it was \u201ctransitory\u201d:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-36056\" src=\"https:\/\/wolfstreet.com\/wp-content\/uploads\/2017\/10\/US-CPI-2017-09.png\" alt=\"\" width=\"511\" height=\"355\" \/><\/p>\n<p>In the chart, note how CPI jumped 2.8% in February and then retreated through June. This retreat was brushed off as \u201ctransitory\u201d by Fed Chair Janet Yellen and other Fed governors when they vowed to continue raising rates. She had specifically pointed out a few of those \u201ctransitory\u201d factors. And they\u2019re now turning around.<\/p>\n<p>One of these factors that Yellen had pointed out was telephone services, which includes the monthly costs that consumers pay for their smartphones. Those costs plunged as a price war among wireless carriers had broken out in 2016. This summer, the price index for telephone services was down around 9% year-over-year. The wireless component plunged as much as 13%. But that consumer bonanza could not last.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Yellen Was Right: \u201cTransitory\u201d Factors of \u201cLow\u201d Inflation Are Reversing, with Much More to Come What\u2019s Boiling Beneath the Surging Inflation? Consumers are going to shell out more money for the same stuff, that\u2019s for sure.\u00a0Inflation as measured by the Consumer Price Index jumped 2.2% in September compared to a year ago, the Bureau of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[926,3279,1055,172,202,426,451,4254,4255],"class_list":["post-26806","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bls","tag-bureau-of-labor-statistics","tag-consumer-price-index","tag-cpi","tag-deflation","tag-inflation","tag-janet-yellen","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26806","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=26806"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26806\/revisions"}],"predecessor-version":[{"id":26807,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/26806\/revisions\/26807"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26806"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26806"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26806"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}