It began with lumber prices a few weeks ago and it is now broadening out. Charts from Daily Shot. Goods prices are deflating as services catch up to normal levels:
Core PCE has peaked:
It’s mostly catch-up anyway:
A long way to fall:
Post-GFC saw the same panic:
Panic fading:
Structural inflation takes structural change:
Labor ain’t doin’ it:
And supply-side labour shortages are now easing:
In some ways, inflation killed inflation:
Just wait until commodities bust as well. 2022 is going to be the year of deflation:
2023 shapes as the next of inflation challenge as fiscally-led US growth takes off from a tight labour market. But that’s good inflation and bring it on.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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