Tag Archives: measures

Inflation is calm at the moment

Remember when there was a ton of worry about inflation? The worry-warts were talking about the federal reserve printing all of this money, which was going to lead to inflation. We were going to be 1930s Germany. We needed to pay off debt and stop government spending. Well, inflation as a rule has held steady. Groceries seems to be steadily increasing, but for the most part inflation has been held in check.

(The worry-warts forgot about the fact that we were in a recession and had high unemployment, which means that there was no demand. It is hard to have inflation with no demand for goods and services.)

From CalculatedRiskBlog:

This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.3%, the trimmed-mean CPI rose 2.0%, and core CPI rose 2.1%. Core PCE is for June and increased 1.8% year-over-year.

These measures suggest inflation is now at the Fed’s target of 2% on a year-over-year basis and it appears the inflation rate is slowing. On a monthly basis (annualized), two of these measure were well below the Fed’s target; trimmed-mean CPI was at 1.3%, Core CPI at 1.1% – although median CPI was at 2.5% and and Core PCE for June was at 2.5%. Based on initial data – and comparing to the increase in August 2011 – it is very likely that the August report will show a further decline in the year-over-year inflation rate.

Jobs report – July

The unemployment rate (8.3%) is unchanged in this month’s jobs report. The economy gained 163,000 jobs.

From BLS:

Total nonfarm payroll employment rose by 163,000 in July, and the unemployment rate
was essentially unchanged at 8.3 percent, the U.S. Bureau of Labor Statistics reported
today. Employment rose in professional and business services, food services and drinking
places, and manufacturing.

Household Survey Data

Both the number of unemployed persons (12.8 million) and the unemployment rate (8.3
percent) were essentially unchanged in July. Both measures have shown little movement
thus far in 2012. (See table A-1.)

Ronald Reagan and economics, Part 2

So a couple of days ago, I discussed Ronald Reagan and the economy because many Americans are under the impression that life was better under Reagan. I discussed real GDP per capita per year and found that Ronald Reagan wasn’t the best, nor even the second best. He was the third best president if we look at this economic indicator. So, today, I would like to get into something a little more personal than the GDP. Let’s look at real income.

Real median income is median income adjusted for inflation.

Just from the naked eye, we can see that it looks as if real median income took off during the Kennedy/Johnson administrations. Americans also did well during the Clinton and Reagan administrations. Again, if we look at real median income per capita per year, we come up with exactly what the naked eye is seeing in the above graph. John F. Kennedy/ London Baines Johnson came in first with 3.48 percent per year. Bill Clinton came in second with 2.49% per year. Finally, Reagan came in third with 2.45% per year.

So with these two real world measures of the economy, Reagan doesn’t come in first or second. He was the third best president in the last 50 years with regards to economic performance. Third. (Check some more facts in the book Presimetrics.)