Economists and investors are cheering over news the consumer price index shows inflation was zero for the month of October, meaning prices on average did not rise.
“Inflation’s receding, baby,” exclaimed professor of economics and Brookngs senior fellow Justin Wolfers. “Headline inflation was literally zero — on average, prices were the same in October as September. Over the year, headline inflation is 3.2%, beating expectations of 3.3%.”
That means that over the past 12 months, prices on average increased just 3.2%. The drop in inflation has been dramatic: in June of last year, inflation was 9.1%.
Wolfers, known for his wit, added, “Let’s call this the Mary Poppins economy: Inflation is floating back to target, unemployment remains near fifty-year lows, growth remains robust, and inequality is falling.”
Wolfers offers good news on wages as well.
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“Real wages are above pre-pandemic levels,” he notes, offering this chart:
“Today we saw more progress bringing down inflation while maintaining one of the strongest job markets in history,” President Biden said Tuesday in a statement from the White House. “At 3.2%, annual inflation is now down by 65% from the peak. Gas prices are below $3.40 per gallon, reflecting an average decline of $1.65 from the peak after Putin’s invasion of Ukraine. Inflation has come down while the unemployment rate has been below 4% for 21 months in a row—the longest stretch in more than 50 years—while wages, wealth, and the share of working-age Americans with jobs are all higher now than before the pandemic.”
Wolfers concluded: “Let the gloom and doomers in your life know you still love them, even if they’re wrong about everything.”
See the charts above or at this link.
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