Paul KrugmanOne thing I've been noticing in my correspondence is how many people think inflation is still running wild; the big deceleration in the 2nd half of 2022 hasn't broken through to public consciousness 1/
Several reasons for this. Too many media reports focus on yoy inflation, so miss the big turn. Traditional core inflation still reflecting rent increases from a year ago. And asymmetric reporting: breathless coverage of rising inflation, disinflation not so much 2/
But anyway, the truth is striking. Here's 3-month "supercore" excluding food energy shelter and used cars: 3/
What about wages? Running hotter than eve of the pandemic. But here's a longer view, using nonsupervisory wages (longer time series) 4/
Recent wage growth running about the same as late 90s and just before 2007-9 recession. Doesn't exactly scream "wage-price spiral"! 5/
504BatteryDrOne would think our economic system is a concrete, law of nature that has no alternatives.
When the truth is it all made up in a certain, systemic way.
Now that we see the truth that this economic system favors a small group of ppl while actually harming everyone not in that small group, one would think smart ppl would support/enact a new/better system, rather than constantly complain about the flawed old one, which involves promoting/supporting that old one.
Seems we're lacking in smart economic ppl.
🤔
Adam Burck
Alan Reynolds at Cato@pkrugman
Several measures of new job openings have fallen for a year, this one by 9.7%.
Several measures of new job openings have fallen for a year, this one by 9.7%.
Gene Cowan 🏳️🌈@pkrugman This is another interesting one. My wages have not budged in years, nor have those of anyone I know. Does this data only apply if one finds a new job?
abeorch@genecowan
Like increases in rent and mortgage costs wage growth happens a lot at the margins when people change jobs rather than within roles.
@pkrugman
Like increases in rent and mortgage costs wage growth happens a lot at the margins when people change jobs rather than within roles.
@pkrugman
OpenDNA⚙️@genecowan @pkrugman Looking at sectoral wage increases, few are as high as the reported wage inflation rate. That points to sampling issues.
Assume that restaurant jobs are low wage and IT jobs are high wage, then layoff all the food service workers for lockdowns - the median wage is going to jump rapidly without an increase in wages anywhere. I suspect something similar happened.
But yes: all sectors rose, so you should have seen an increase too.
Paul CzegeLay off the least senior people and you get the same effect?
@PaulCzege @genecowan @pkrugman Exactly right.
If the C-suite works from home while the rank-and-file gets the pink slip, the statistic grows rapidly.
Krugman's chart specifies nonsupervisory wages. So if the median increase is true across industries, not because food service workers lost their jobs and tech workers didn't, then upward movement happens either because workers actually got wage increases, or because industries cut their least senior, lowest earning nonsupervisory workers.
@PaulCzege @genecowan @pkrugman It's not enough for workers to get any wage increase, it must be a large enough wage increase to explain the average wage growth reported. The sectoral tables show it wasn't evenly distributed.
Non-supervisory retail saw a 1.93% increase in weekly earnings in 2022, non-durable manufacturing saw 1.04%. Averaging those in with the relatively large 4.25% seen in hospitality isn't going to get us up to 5% or 8%.
Richard Keppler@genecowan @pkrugman I’m sorry to hear it.
2021 I lobbied hard and got a 6% rise. Near the end of 2022 I was informed I was getting another 12%, and I didn’t need to lobby for it. Perhaps you should ask.
2021 I lobbied hard and got a 6% rise. Near the end of 2022 I was informed I was getting another 12%, and I didn’t need to lobby for it. Perhaps you should ask.
@RichardKeppler @pkrugman Yeah. I asked last year and still waiting. Problem is, in my line of work — graphic design/creative — it’s a full-time job to search elsewhere because of the unique requirements of putting together portfolios, etc. 🤦🏻♂️
@RichardKeppler @pkrugman also, I work for a “good cause” non-profit, as is my preference over a corporation; but that doesn’t stop higher-ups getting raises.
OaklandWellesley@genecowan @RichardKeppler @pkrugman The bosses will always take care of themselves. You should too.
Jonas Trostle@genecowan @pkrugman Job stayers have lower wage growth than switchers, but they seem to be staying competitive with inflation, at least according to the Atlanta Fed https://www.atlantafed.org/chcs/wage-growth-tracker
@genecowan @pkrugman You should certainly do a job search to see if changing employers is a good move for you. Most employers will cut employees if it’s even marginally advantageous. So there is no real loyalty anymore. Even if your employer is better than average it sure can’t hurt to look around.
Manfred Lange (he/him)@pkrugman While in this visualization the postpandemic increases are higher, it might have its root cause in the higher inflation.
I'd not be surprised if at some point in the future the increases return back to the levels we saw long-term prepandemic.
MARGARET D@pkrugman I’m hoping that the elimination of non-compete requirements will fuel wage growth as workers move to competitors for better wages.
Ms Starry Night@pkrugman idk who is getting the increase but “It Ain’t Me” CCR 🎶 #silverspoon #wages #salary #healthcare
@pkrugman In the last Fed minutes the staff report told the FOMC that nonfarm business compensation was up at 4% over four quarters, though it was only a 2.6% rate over three (excluding Q4 2021).
The YoY habit leads the Fed to miss turning points as inflation rises or falls.
@pkrugman Why is the X-axis labeled on a 17 month interval? That's a crazy thing to do.
@pkrugman Unfortunately, many companies such as grocery conglomerates will adjust their prices down but not all the way. They use these cycles as cover for setting a new, higher base price while giving the appearance of reducing prices.
Oldcdnguy@pkrugman Here’s your inflation numbers without the three things every human being needs to survive. 🙄
Jeremy 🅰️ Williams 
@pkrugman honest question: why do these figures frequently exclude food, energy, and housing? I’d argue those are three of the areas people feel inflation most acutely.
Matt Baggott@jeremyawilliams @pkrugman Probably because those three aren't discretionary spending. If you want to see if consumers are spending too much and overheating the economy, excluding them should make the metric more focused and sensitive.
Steve In Ashland@mattbagg @jeremyawilliams @pkrugman except food is very fungible. Calories are less so, but the cost of the source of calories is. I can get 500cal from a can of beans, a lump of butter, or a salmon; all very different costs.
@steveinashland @mattbagg @pkrugman fair, but when I could get 18 eggs for 1.99 and now they’re 4.75, or a pound of ground beef that was 3.00 is now 6.00, that really makes a day-to-day impact.
@jeremyawilliams @steveinashland @pkrugman Sure, it's not perfect and it's more for diagnosis and picking solutions than for tracking impact. There are dozens of consumer price and inflation measures that emphasize different things. My point is I think Krugman is picking this metric because he is trying to talk about how much consumers are currently driving inflation, not how much inflation is hurting people.
@jeremyawilliams @steveinashland @pkrugman (eggs also have a specific cause of inflation --bird flu-- that is unrelated to other sources of inflation.)
@mattbagg @steveinashland @pkrugman I agree that no one is talking about how month-over-month inflation is easing, I just didn’t understand how you can remove the items that take up the bulk of people’s budgets and say they don’t have an effect. Also, I understand the issue with eggs, but I think there’s also some justification of raising prices because they can get away with it as well.
✡️ MG ✡️ #VoteBlue@pkrugman what good is an economic measurement that excludes the regular expenses for the things that everyone needs?
Matthew Cassinelli@pkrugman Removing “food” from your analysis might be the reason people don’t care about this
Ambiorickx@pkrugman food and energy are kind of a BFD for most people tho
John GordonAs a whole we are all still adjusting our behavior to price increases -- even if prices are stabilizing. That adjustment process will take months more.
For (privileged) us we eat out much less and take fewer US trips. Travel to lower cost destinations is likely to grow.
Bud Gibson@jgordon Plus, you’re recently retired.
@BudGibson Yeah! That does change decisions...
CartyBoston
Minnesnowtayay thanks, I am half kidding, was at the store yesterday
Hal Canarypeople also don't think in terms of rate of increase.
we are conditioned to consider prices from five years ago as normal. when we still see prices elevated compared to that level, we think inflation must be ongoing!
KatLS@pkrugman it is called television programming after all…
@pkrugman also gas and eggs.
@pkrugman and bread
I haven’t seen much price gouging in beer though.
I haven’t seen much price gouging in beer though.
Dennis Croskey@pkrugman
I am so damn sick of our local news broadcasts--seems like 3 of every 4 stories is nothing but whining about inflation in some form or another. For two years, everything that happened or didn't happen was "due to the pandemic." Now everything is "due to rising prices."
I am so damn sick of our local news broadcasts--seems like 3 of every 4 stories is nothing but whining about inflation in some form or another. For two years, everything that happened or didn't happen was "due to the pandemic." Now everything is "due to rising prices."
TQdemocrat@pkrugman The news media broad strokes everything. Claiming there is a nationwide egg shortage, there isn't. Claiming gas cost were $6.99 across the country it wasn't. And claiming there was inflation across the country, it didn't exist. The country has to fight with lying Republicans and the media everyday.
Steve Oh 🇺🇸💙✊🟰🗽🇺🇦@pkrugman Of course, “inflation” is felt by actual people as higher prices, and when inflation begins to abate, any resulting price reductions aren’t immediately seen by consumers. Inflation is unfortunately used by some politicians as yet another bogeyman. ☹️
Bill Seitz@pkrugman people define the end of inflation (spike) as when prices return to the old values.
@pkrugman
The FOMC has repeatedly deluded itself and others for decades by refusing to gauge changes in wage or price inflation over periods shorter than 12 months.
Some 357 staff economists have not served the Fed well in this respect.
https://www.cato.org/blog/perennial-year-year-oil-price-confusion-5
marca56@pkrugman I think you should also make clear that it’s a RATE and costs trail the rate, and there are other factors like greed, or profiteering, going on that make the changes lag even when the rate is now back to pre-Pandemic levels.
marktaylor@pkrugman The reason is the Republican messaging which is repeated on @cnbc and other media. 90% of those interviewed are Republicans. Go watch @cnn too. It’s remarkable. CNN implied that inflation rather than supply chain issues due to bird flu was the cause of the increase in the price of eggs. The media lie to get ratings. Red wave is another example. It’s all Republican bs. Cc @Maddow @mehdihasan
Stargeezer Smith@pkrugman
The power of Fox.
The power of Fox.
bookish@pkrugman eggs are $5; my rent has not gone down.
@pkrugman Could it have anything to do with people’s experiences buying groceries? Food prices don’t seem to have gotten the message. Unlike, say, refrigerators, everyone buys food all the time so the elevated price of groceries. makes a bigger impression than some other categories.
Karen Rossi@pkrugman because people wrongly associate it with their grocery bill, and that is consistently higher every week