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PrintFebruary 16, 2024
There is something about Mr. Unexpected ...
Guess who showed up this week?
It's Mr. Unexpected, the same one who seems to show up with every economic report these days.
Here is The Wall Street Journal:
Stock prices tumbled Tuesday after the Labor Department’s inflation reading for January came in hotter than expected, suggesting the Federal Reserve may start cutting interest rates later rather than sooner. But the news that inflation is proving sticky won’t surprise most Americans.The consumer-price index rose 0.3% in January and 3.1% over the last year. Excluding food and energy, core prices have increased 3.9% year-over-year. That’s progress from a year or two ago. Prices for goods have fallen over the last year, which is good news if you’re looking to buy a used car or washing machine. But January’s 0.4% monthly increase in the core inflation index (sans food and energy) is the highest since last May. Some analysts blame the government’s measurement of housing, which rises and falls with a lag. Owners’ equivalent rent rose 0.6% in January. More startling was the 2.4% increase in hotel and lodging prices, which had declined for most of last year.
Well, all I can tell you is that food and energy prices are the highest since last May, or bad news if you buy food or heat your home.
On the other hand, it's better news if you are buying a washing machine or something that most consumers do every 10 years. I think that we bought our washer and dryer so long ago that I don't remember who was president and I've got a good memory for stuff like that.
So the economic pessimism grows because there is little to count on except that Mr. Unexpected will be back next month. I can't tell you whether it will rain or not around here but I'll bet a cup of strong Cuban coffee that Mr. Unexpected will tell us next month that something happened that he was not expecting.
Maybe we should fire all of the economic experts and replace them with housewives who understand the economy a lot better. At least, the housewife never comes home and says that the rise in prices is unexpected. We need more of that.
