Don't be fooled by the media's portrayal of inflation

People get too “programmed” by media sensationalism and people in the economic/investment industry don’t do their homework or lack critical thinking. Kind of reminds me of a certain “event” that transpired from 2020 to mid-2022! 😉

Here’s what I mean regarding CPI:

Headline news says 6.8%.  And here is the source news.

Here is the source data:

Nov/22 index: 154

Nov/21: 144.2

154/144.2-1 = 6.8%   Big number for sure. 

Now look at this:

Aug/22: 152.6

(154/152.6)^4 – 1  (to annualize it) = 3.7%   (I’m missing some seasonality, but you get to the same picture)

Conclusion: The inflation rate is slowing rapidly, but the media is not describing it properly.  They’re sticking to sensationalism and people are buying it.  We had horrific inflation in the spring/summer of 2022 – way worse than the media reported, but it’s been collapsing since then. 

Look at the chart below, the blue line is what’s reported in the media.  The orange and grey are the rolling 3 and 6-month data.  I seriously doubt that future inflation will be really high like the trending 12-month CPI, meaning inflation is already down and will likely stay well below 6.8%….unless another wild global event occurs.

The media lies to us, shocker 🙁

Written by someone much smarter than me and shared by a good friend.