[sneak]

Inflation isn’t easing. The rate of inflation’s increase is reducing. Inflation is still inflating, and it’s still a lot more than in the past. We’re also still dealing with the effects of the inflation of the last few years. For that to be “easing”, we would have to see negative inflation for a bit to counteract some of that. We’re not.

Things are just getting worse a bit more slowly.

[mediaman]

When people say "inflation is easing," they do not mean negative inflation. We have a word for that: deflation. "Inflation is easing" means the rate of inflation is declining. If they meant deflation, they would say deflation, not easing inflation.

One a new price level is hit, if it is then stabilized, the price level is not inherently good or bad. The goodness or badness of prices is based on the purchasing power that people have to buy those goods. Real wages are still up, so it's not obvious that "things are getting worse."

[ojbyrne]

I get the impression you don’t grasp what the word “inflation” means, I think you are confusing it with the word “prices.”

[losteric]

Just to add specifics, the cumulative inflation since September 2019 is over 20% and it's still growing. All that's changed is the year-over-year velocity has decreased.

But! US average hourly income is also up about 20%. Granted, that's an average - US tech income (upper-middle class) is probably flat, as is the minimum wage-bottom.

[drexlspivey]

> the cumulative inflation since September 2019 is over 20% and it's still growing

but it’s always growing

[ska]

But at target rates it would be about 8% since 2019, not 20%.

[xxpor]

No, the minimum wage bottom (very few people any more at the federal level, ~2.5%. In 2010 it was >10%) has seen the fastest growth vs the middle and top of the ladder.

[matthewmacleod]

All that's changed is the year-over-year velocity has decreased

This is literally inflation – the rate of change of prices.

[losteric]

I know. There's a gap between common language and technical definitions. Most people use "inflation" to baseline current prices against recent memory (ie cumulative change over multiple years).

I opt against the quixotic battle for language, people typically skim such pedantry.

Also... one could argue the YoY definition is "wrong" if consumers are thinking and planning based on a longer time period. Why report YoY instead of a rolling 2 years? 5? Or perhaps different windows for specific items within the basket?

[dougmwne]

Deflation is poison to an economy. It causes everyone to sit on unproductive cash and make no investments or purchases. With the inflation rate just about 3%, that is close to the Fed’s target rate for a healthy economy where people are pushed to spend and make investments, but savings and quality of life are not eroding.

Honestly trying to get you to reevaluate your world view to be less catastrophic. Money isn’t real anyway, it’s just a convenient fiction to enable complex trade of goods and services, which are of actual value.

Unless you are in Russia, Turkey or Argentina, then please carry on with the gloom.

[logicchains]

>Deflation is poison to an economy. It causes everyone to sit on unproductive cash and make no investments or purchases.

This is a nonsensical view with no empirical backing behind it. People need things to live, they won't just stop making any purchases because their money could be worth a few percent more in future. They may buy fewer things and save more, but this is just a shift in the ratio of savings to consumption, which in the long term leads to more growth (higher savings rates lead to more growth in the long term, as there is more capital to invest).

There's not a single incidence of an economy destroyed by deflation. The depression was due to mass wage and price controls by the government, and huge tariffs, which produced all the negative effects predicted by macroeconomic theory. There are on the other hand many many economies that have been destroyed by inflation, even in recent years (e.g. Venezuela, Zimbabwe).

>Money isn’t real anyway, it’s just a convenient fiction to enable complex trade of goods and services, which are of actual value

And the fiction that inflation is good is what allows people in power to transfer your purchasing power to their buddies in the financial syatem while making you believe it's for your own good. Because purchasing power lost to inflation doesn't just disappear in thin air, it goes to the first recipients of the newly created currency, i.e. the financial system.

[dougmwne]

You can look at Japan as an example of deflationary spiral.

People buy far, far more than they need to survive. A small decrease in consumer spending can set off a major recession.

Inflation benefits anyone carrying any kind of debt. It’s great for people with mortgages and bad for anyone with bonds.

[surge]

The whole point of increasing interest rates is to encourage the same behavior, holding onto money instead of spending it, thus making money "less" available or removing it from the market. I think doing things to cause deflation to say, curb inflation from say 8% to 5% (by causing 3% deflation in value) helps as its context dependent.

I agree deflation of value into the negatives over a long term causes its own set of issues, but after you went on a big money printing spree to deal with an economic crisis, I think something like counter deflation is possible if inflation rate is still positive.

[dougmwne]

But isn’t that what we are doing right now? We don’t want deflation, but the fed is trying to create low inflation numbers so that the economy can get over the high inflation hangover. It’s widely accepted that there’s a Goldilocks zone of low inflation 1%-3% that keeps the real economy growing.

[rurp]

Wait, what? Inflation makes money hidden under a mattress lose value faster than it otherwise would have.

Unless you're upset about more money being invested in vehicles like CDs and bonds. But that isn't bad for the economy at all. The money doesn't just sit in a giant vault, it gets routed to economically useful activities.