Interactive Inflation Graphic -- December 16, 2023

Locator: 46318ECON.

Link here. Tag inflation chart graphic.

At the link scroll down to the graphic and then click on the sector at the legend to the right of the graph.

I don't think any of these graphs make me a better investor but it helps me fact-check the talking heads on CNBC and helps put things in better perspective.  

Farther down on that same page, the CPI since 1913.

Looking at the last column: average annual percent change -- "AVG - AVG":

• 2019: 1.8%
• 2020: 1.2% -- Covid-19 lockdown
• 2021: 4.7% -- Covid-19 lockdown
• 2022: 8.0% -- "area under curve" meets "supply chain woes"; inflation spike had very little to do with anything else
• 2023: 3.5%? -- Fed,other analysts foresee change around 2% going into 2024 - 2025

Important to note:

• "area under the curve": well understood
• "supply chain woes": has never been adequately explained to average investor

So, we had one year of a spike to 8% coming off something we had never seen before: "area under curve" meets "supply chain woes."

And worse, the "supply chain woes" were exacerbated by challenges of the Fourth Industrial Revolution.

So, a one year spike.

We have had it worse: look at the period from 1968 to 1991 -- 23 years.

Much, then, derives from that. 

I think it's fascinating.

It doesn't make me a better investor but it reassures me I'm on the right track.

It also speaks volumes about CEOs who say they are struggling due to inflation.  

Which brings me to Mary Barra and another stand-alone post later.