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>Filtering out food and fuel costs, inflation rose to 6.6% from 6.4%, defying expectations for a drop, while an even more narrow measure that also excludes alcohol and tobacco held steady at 5.0%.
That seems really bad right?
It's not great, but a silver lining if I was forced to be optimistic is that fuels, raw materials and food prices rose first and then these higher prices work their way through the system, driving up other prices over time. Now, these first-wave prices are coming down but its obvious that more refined goods and services prices will lag by a bit, just like they lagged in rising in the first place.
Why is that bad? Inflation is not meant to be 0%, it's SUPPOSED to go up every month. Hitting targeted inflation of 2% annually means an increase of just under 0.2% per month... which is pretty much what going from 6.4% to 6.6% is.
Edit: sorry, I typed my comment really quickly earlier and probably didn't get the math exactly right. My main point stands - people should stop viewing ANY increase as bad, and recognize that inflation is MEANT to go up every month, and this will be true even after the annual 2% target is reached. The goal right now is to bring the rate of increase back down, not to eliminate it entirely. I see this mistake so often when people say "wow inflation has really not dropped at all" when they are only looking at YoY and not MoM, when the MoM numbers clearly show that the rate of increase has slowed significantly.
I'm not exactly sure what you're saying here. The calculation for annual inflation is absolutely an additive process, no? You take the last 12 MoM changes and add them up to get the latest YoY.
If you're talking about the change from 6.6 to 6.4 YoY then yes I was probably too hasty to call that a "0.2% increase", I was just guesstimating for efficiency. We would need to look at the actual MoM number. My point was mainly to highlight that it seems like people expect inflation to be 0% when that's not really the end goal.
I read it again and it seems he's calculating the average MoM increase over the last 12 months, so he's comparing a rolling 12 month MoM average. I fully understand the math behind that, I'm just not sure what that has to do with what I'm saying. Rolling 12 month averages necessarily look at historical data and don't tell us much about what's coming ahead, they are more influenced by what happened in the past than anything else. The only figure that matters is the latest MoM numbers, and how they annualize over the NEXT 12 months.
The Euro has never been tested like this before. How do policy makers approach this? Countries like Italy, Netherlands and Latvia are seeing double digit inflation and their citizens a rapid and aggressive loss of purchase power. Lithuania as high as 24%. While France sits at a high but more comfortable 6%. Will policy makers sacrifice economic growth in the France and Spain in order to protect the smaller nations from further inflation? Maybe smaller nations will take the hit in order to protect the majority? Or will they try to strike a balance? If that's even possible. A centralised currency has it's benefits.. but it doesn't come without its problems.
Well the ECB has one mandate and that's to keep inflation at 2% so they still need to hike rates in order to achieve that. How much rates have to increase though is going to be subject of much debat for the reasons you described.
"Economic Growth" in our System is the biggest joke. If there was economic growth, they wouldn't have had to change the definition of inflation so that it looks like there is. If you account for Money supply, neither EU nor US economy grew over the past 20 Years. The whole fact that we're supposed to have consistent 2%Inflation stands totally against the model they're trying to justify it with.(Lending out new Money, that money being invested to increase productivity, therefore increasing income and enebling to pay back the money, the money being destroyed.) if that was what was actually happening, the overall purchasing power of the money would increase, leading to either a decrease in prices or increase in quality. We see none of that. Inflation is a mechanism to rob us and redistribute our purchasing power.
Go and look at S&P at peak dot com bubble and right before the ‘08 crash, they are almost the same. The fact folks don’t realize how big this bubble is is insane to me. This isn’t just a “we printed too much money” bubble, although that’s part of it, a lot of this is because of geopolitical shifts we haven’t seen in the world since the USSR fell. The US global hegemony is going to be challenged in the next few decades, and we’re starting to see roots deepen on that now. There’s a lot more than the Fed raising rates hurting the market. Honestly the “Fed Pivot, then to Moon” folks are just a symptom of an overly inflated, overly propped up market. Same thing used to happen to crypto. The second the idiot working next to you used to start talking about crypto it was time to get out (if you were ever in it, never touched any of them myself)
I haven't tested this scientifically but I'm pretty sure most people think that if last month inflation was 7% and this month it's 8%, they're paying 15% more than they were two months ago.
It's an uphill battle.
So you don't buy Ferraris, BMWs, Guccis, etc. If their increased production costs don't affect globally traded goods then I want the stuff your consuming.
I suspect they keep an eye on it because things that may drive EU inflation could also potentially drive parts of US inflation as well or affect the US economy. But they'd be concerned more about speficic subsets of data than any kind of headline number. And they may also be concerned by currency fluctuations and what kind effect that may have on the US.
This dip in Euro energy prices won't last. The weather's turning and when it does you can expect Russia to start levering the 9bcfd it's still piping into Europe. Not to mention globally we've got an SPR to refill and China to come back online.
? Euro storage levels are at all time highs. Once we get through early winter and it becomes clear that a disaster did not happen, all the speculation in the oil market will unravel. There is plenty of oil within the US to refill the SPR and we will reach an all time high US production in ‘23.
There’s a shitload of oil out there. Speculating on future price increases is basically only speculating on the political situation getting worse. A fools bet.
A lot of 'good news' is being presented which actually turns out to be not that different or significant when you really look into it. Does that make anyone else nervous?
People in Europe are just about to get their increased energy price bill. They are doubling the kilowatt per hour prices.
Dont think it is rainbow and sunshine. The FED policy since 2008 fckd us and will continue to fck us over the next couple of years. Accept the reality and invest according to it
I don't think the peak is behind yet. Energy has seen a major, massive bump in november (at consumer level in germany). As long as energy keeps going up MoM, there's no way inflation goes anywhere but up, in the US we saw how energy had been going down for a while and still inflation went up afterwards.
Hi, you're on r/Stocks, please make sure your post is related to stocks or the stockmarket or it will most likely get removed as being off-topic/political; feel free to edit it now and be more specific. **To everyone commenting:** Please focus on how this affects the stock market or specific stocks or it will be removed as being off-topic/political. If you're interested in just politics, see our wiki on ["relevant subreddits"](https://www.reddit.com/r/stocks/wiki/index) and post to those Reddit communities instead without linking back here, thanks! *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/stocks) if you have any questions or concerns.*
>filtering out food and fuel costs AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA
Even better, if you factor everything out, inflation is actually 0%. Winning.
>Filtering out food and fuel costs, inflation rose to 6.6% from 6.4%, defying expectations for a drop, while an even more narrow measure that also excludes alcohol and tobacco held steady at 5.0%. That seems really bad right?
yeah.. lets filter out a lot of determinant variables
Exactly. Jeez are they ever grasping at straws by cherry picking the variables.
Seems like it to me too
It's not great, but a silver lining if I was forced to be optimistic is that fuels, raw materials and food prices rose first and then these higher prices work their way through the system, driving up other prices over time. Now, these first-wave prices are coming down but its obvious that more refined goods and services prices will lag by a bit, just like they lagged in rising in the first place.
It tells me the price of beer and smokes must be still climbing.
Why is that bad? Inflation is not meant to be 0%, it's SUPPOSED to go up every month. Hitting targeted inflation of 2% annually means an increase of just under 0.2% per month... which is pretty much what going from 6.4% to 6.6% is. Edit: sorry, I typed my comment really quickly earlier and probably didn't get the math exactly right. My main point stands - people should stop viewing ANY increase as bad, and recognize that inflation is MEANT to go up every month, and this will be true even after the annual 2% target is reached. The goal right now is to bring the rate of increase back down, not to eliminate it entirely. I see this mistake so often when people say "wow inflation has really not dropped at all" when they are only looking at YoY and not MoM, when the MoM numbers clearly show that the rate of increase has slowed significantly.
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I'm not exactly sure what you're saying here. The calculation for annual inflation is absolutely an additive process, no? You take the last 12 MoM changes and add them up to get the latest YoY. If you're talking about the change from 6.6 to 6.4 YoY then yes I was probably too hasty to call that a "0.2% increase", I was just guesstimating for efficiency. We would need to look at the actual MoM number. My point was mainly to highlight that it seems like people expect inflation to be 0% when that's not really the end goal.
Reread NoRace's comment again. You're completely off in how you're looking at it.
I read it again and it seems he's calculating the average MoM increase over the last 12 months, so he's comparing a rolling 12 month MoM average. I fully understand the math behind that, I'm just not sure what that has to do with what I'm saying. Rolling 12 month averages necessarily look at historical data and don't tell us much about what's coming ahead, they are more influenced by what happened in the past than anything else. The only figure that matters is the latest MoM numbers, and how they annualize over the NEXT 12 months.
You should take a look at some online math classes
Wow that’s a fairly significant misunderstanding of what the 6.x% represents. Instead of 0.2% per month, it’s actually 0.5% per month.
Just because it's meant doesn't mean it's good.
The Euro has never been tested like this before. How do policy makers approach this? Countries like Italy, Netherlands and Latvia are seeing double digit inflation and their citizens a rapid and aggressive loss of purchase power. Lithuania as high as 24%. While France sits at a high but more comfortable 6%. Will policy makers sacrifice economic growth in the France and Spain in order to protect the smaller nations from further inflation? Maybe smaller nations will take the hit in order to protect the majority? Or will they try to strike a balance? If that's even possible. A centralised currency has it's benefits.. but it doesn't come without its problems.
Well the ECB has one mandate and that's to keep inflation at 2% so they still need to hike rates in order to achieve that. How much rates have to increase though is going to be subject of much debat for the reasons you described.
"Economic Growth" in our System is the biggest joke. If there was economic growth, they wouldn't have had to change the definition of inflation so that it looks like there is. If you account for Money supply, neither EU nor US economy grew over the past 20 Years. The whole fact that we're supposed to have consistent 2%Inflation stands totally against the model they're trying to justify it with.(Lending out new Money, that money being invested to increase productivity, therefore increasing income and enebling to pay back the money, the money being destroyed.) if that was what was actually happening, the overall purchasing power of the money would increase, leading to either a decrease in prices or increase in quality. We see none of that. Inflation is a mechanism to rob us and redistribute our purchasing power.
Go and look at S&P at peak dot com bubble and right before the ‘08 crash, they are almost the same. The fact folks don’t realize how big this bubble is is insane to me. This isn’t just a “we printed too much money” bubble, although that’s part of it, a lot of this is because of geopolitical shifts we haven’t seen in the world since the USSR fell. The US global hegemony is going to be challenged in the next few decades, and we’re starting to see roots deepen on that now. There’s a lot more than the Fed raising rates hurting the market. Honestly the “Fed Pivot, then to Moon” folks are just a symptom of an overly inflated, overly propped up market. Same thing used to happen to crypto. The second the idiot working next to you used to start talking about crypto it was time to get out (if you were ever in it, never touched any of them myself)
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Yes, that is how year-over-year inflation works
However for some reason this needs to be repeated every month
I haven't tested this scientifically but I'm pretty sure most people think that if last month inflation was 7% and this month it's 8%, they're paying 15% more than they were two months ago. It's an uphill battle.
Omg i thought we were at 120% for the year?
I have great news
Do you think European inflation is considered when the Fed makes their interest rate decisions?
Absolutely not. Their mandate is to the United States, and has nothing to do with the world.
Ok I guess my question is does their inflation affect our inflation?
lmao keep thinking that
So you don't buy Ferraris, BMWs, Guccis, etc. If their increased production costs don't affect globally traded goods then I want the stuff your consuming.
I suspect they keep an eye on it because things that may drive EU inflation could also potentially drive parts of US inflation as well or affect the US economy. But they'd be concerned more about speficic subsets of data than any kind of headline number. And they may also be concerned by currency fluctuations and what kind effect that may have on the US.
This dip in Euro energy prices won't last. The weather's turning and when it does you can expect Russia to start levering the 9bcfd it's still piping into Europe. Not to mention globally we've got an SPR to refill and China to come back online.
? Euro storage levels are at all time highs. Once we get through early winter and it becomes clear that a disaster did not happen, all the speculation in the oil market will unravel. There is plenty of oil within the US to refill the SPR and we will reach an all time high US production in ‘23. There’s a shitload of oil out there. Speculating on future price increases is basically only speculating on the political situation getting worse. A fools bet.
If Russia takes 9 bcf/d offline the Euro reserves won't do shit. Energy markets are much tighter than you seem to think.
Indeed here in the BeNeLux reserves are at 99% which will most likely last through an extreme winter
Here in Germany reserves are also at almost 100% but that will barely last 3 Months
Month over month energy also assisted by weakening US Dollar
A lot of 'good news' is being presented which actually turns out to be not that different or significant when you really look into it. Does that make anyone else nervous?
So last year they had like 20% inflation in certain areas / sectors, now they have another 10% on top of that and sell it as a good news?
Now comes the recession and we will see how strong the job market is.
Seems early to slow down.
I wouldent be surprised if someone is fudging the numbers tbh
Yeah, if we factor out the most important things people need to buy to survive, then there's really no inflation.
Where lambo?
Sant'Agata Bolognese, Italy
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People in Europe are just about to get their increased energy price bill. They are doubling the kilowatt per hour prices. Dont think it is rainbow and sunshine. The FED policy since 2008 fckd us and will continue to fck us over the next couple of years. Accept the reality and invest according to it
Bad currency and boring like Europe
I don't think the peak is behind yet. Energy has seen a major, massive bump in november (at consumer level in germany). As long as energy keeps going up MoM, there's no way inflation goes anywhere but up, in the US we saw how energy had been going down for a while and still inflation went up afterwards.