Consumer Inflation Still Nowhere to be Found

[jaysabi]

US Wholesale prices are up just 0.1% in November, 0.3% in October and 0.4% in September, trending towards deceleration over this period.  Overall, wholesale prices are up just 0.8% from a year ago, which is far below the Fed's target annual inflation rate of 2% and despite the unprecedented amount of money creation during the pandemic. 

The core inflation rate, which excludes volatile food and energy costs as a means of measuring attempting to more accurately measure the inflation rate that isn't subject to short term volatility, is up 1.4% in the past 12 months.  (It seems the more volatile segments of are weighing down overall inflation currently.)

Source:  https://www.sfgate.com/news/article/US-wholesale-prices-up-0-1-in-November-food-and-15794160.php

[bits4books]

Most likely, this is due to the fact that even those trillions of printed money went not just under the pillow and into the pockets and went straight into circulation - the reception is very confident. Buying food, medicine, salaries, utilities, and so on.
Inflation is more pronounced if the growth of the money supply is accompanied by universal accumulation, but now we see that the money received immediately goes to the market and diverges through it. Rather, we can even say that for the market of ordinary consumer goods, printing money this year worked like an adrenaline shot-it stimulated demand and at the same time did not give free rein to the wild inflation that everyone expected.

[Lorence.xD]

Most likely, this is due to the fact that even those trillions of printed money went not just under the pillow and into the pockets and went straight into circulation - the reception is very confident. Buying food, medicine, salaries, utilities, and so on.
Inflation is more pronounced if the growth of the money supply is accompanied by universal accumulation, but now we see that the money received immediately goes to the market and diverges through it. Rather, we can even say that for the market of ordinary consumer goods, printing money this year worked like an adrenaline shot-it stimulated demand and at the same time did not give free rein to the wild inflation that everyone expected.

It is still a bad thing that US didn't reach their target rate of inflation because these could mean that the economy is going down, and by the end, more jobs will not be available because of deflation and salaries will be lowered and an annual growth will be difficult. The money did help the individuals but not the economy as some of them that received the money invested some of it to stocks and other appreciating investments.

[Pito001]

Real problems with inflation will be after several years. This money printing will be punished

[Hydrogen]

In past press releases it was hinted they would attempt to contain inflation associated with money supply expansion by targeting specific sectors where liquidity would be injected(bolded below).

The ballooning money supply may be the key to unlocking inflation in the U.S.

“Rates were very low and central bank balance sheets (and money creation) had surged. But the liquidity then sat in the banking system—including as excess reserves at the Fed,” he wrote in an email. “Money creation must translate into increased lending and spending in order for it to be inflationary.”

The idea that money creation won’t necessarily generate inflation is centered on yet another economics concept known as the velocity of money.

The velocity of money is, very simply, the rate at which money is exchanged in an economy. High money velocity is usually associated with a healthy economy with businesses and consumers spending money and adding to a country’s gross domestic product.

But the velocity of money can slow during recessions as corporations and families elect to save more of each dollar they earn. Demographic changes, such as an older population, also tend to curb the velocity of money.

According to Sheets, the Fed can go to extreme lengths to flush the economy with cash and bolster the M2 supply. But if businesses and customers aren’t inclined to spend the added dollars, the cash will almost invariably wind up sitting idle, not contributing to GDP or inflation.

That may be a partial explanation as to why the U.S. hasn’t seen headline inflation numbers increase despite the rise in M2 supply in recent months.

The Labor Department’s latest report on core consumer prices showed the index down for a third consecutive month in June for the first time since 1957. The core personal consumption expenditures price index, the Fed’s preferred inflation gauge, increase 0.9% on a year-over-year basis in June, the smallest advance since December 2010.

“Inflation has been held down by some deep structural factors, including aging demographics and high debt levels — which have restrained aggregate demand and pressures on prices,” Sheets wrote in an email. “Workers have struggled to get higher wages, and firms — competing against the so-called ‘Amazon price’ — have had little capacity to raise their prices.”

https://www.cnbc.com/2020/08/05/the-ballooning-money-supply-may-be-the-key-to-unlocking-inflation-in-the-us.html

Whether or not these theories and branch abstracts of MMT (modern monetary theory) pan out over the long run is anyone's guess. But in the short term at least money supply expansion may be somewhat contained within the banking system to prevent it from spilling over into consumer markets.

There could also be other negatives and positives to this approach not being mentioned. As well as other explanations behind statistics OP claimed.

[palle11]

Real problems with inflation will be after several years. This money printing will be punished

I believe so too that as the day move, we can start to see the effects coming in different economy. Printing of money if not well addressed can cause inflation and now we are just looking the surface level of it , goods are already being high when countries are still thinking to print more money.

[hatshepsut93]

Most likely, this is due to the fact that even those trillions of printed money went not just under the pillow and into the pockets and went straight into circulation - the reception is very confident. Buying food, medicine, salaries, utilities, and so on.
Inflation is more pronounced if the growth of the money supply is accompanied by universal accumulation, but now we see that the money received immediately goes to the market and diverges through it. Rather, we can even say that for the market of ordinary consumer goods, printing money this year worked like an adrenaline shot-it stimulated demand and at the same time did not give free rein to the wild inflation that everyone expected.

If new money went for buying consumer goods, it would have increased their prices if the demand was increased, but if things like stimulus checks only helped to offset the loss of demand due to unemployment, then of course inflation isn't so big.

Another possible scenario is that a lot of printed money went to companies who used it on things like buying their stock, so it won't have much effect on consumer goods.

But the US dollar dropped against other currencies, so you can't say that money printing had no negative effects - they're just not too noticeable for an average American yet.

[Mauser]

I just watched this documentary about money and why FIAT currency became worthless in the last 50 year.

Gold & Dollar: How Money Became Worthless | Currencies Explained | Documentary | Fiat Currency
https://www.youtube.com/watch?v=bgPDW0ZpgJU

Everything goed back to the abortion of the gold standard basically. And the debunk the inflation rate into a basket of goods that people actually use, and a basket of goods that is constructed artifically just so the inflation rate seems low.

[stompix]

Most likely, this is due to the fact that even those trillions of printed money went not just under the pillow and into the pockets and went straight into circulation - the reception is very confident. Buying food, medicine, salaries, utilities, and so on.

Nope, it's not that simple and it's nearly the opposite.
If all money goes into consumption you have a  lot more demand for goods which would trigger a rise in price since there are not enough of those to counter it and from that, you have a price increase. Furthermore, not having enough money in circulation around in an economy will actually trigger deflation since there is more stuff to buy and less money for it.

Inflation is more pronounced if the growth of the money supply is accompanied by universal accumulation,

People accumulating and not spending are not triggering inflation, quite the opposite.

[masterzino]

People are still very cautious and prefer to stash those newly printed money.

We will feel the effect in 4-7 years, not now. I will not be surprised to see mortgage rates in the 10% range again and then people could even revolt. Btw this could be a golden time for cryptos and holders. 

[exstasie]

US Wholesale prices are up just 0.1% in November, 0.3% in October and 0.4% in September, trending towards deceleration over this period.  Overall, wholesale prices are up just 0.8% from a year ago, which is far below the Fed's target annual inflation rate of 2% and despite the unprecedented amount of money creation during the pandemic. 

The core inflation rate, which excludes volatile food and energy costs as a means of measuring attempting to more accurately measure the inflation rate that isn't subject to short term volatility, is up 1.4% in the past 12 months.  (It seems the more volatile segments of are weighing down overall inflation currently.)

Source:  https://www.sfgate.com/news/article/US-wholesale-prices-up-0-1-in-November-food-and-15794160.php

That was expected given the massive economic contraction seen earlier in the year. In that context, deflation was actually quite possible due to significant declines in economic productivity, regardless of any increases to the money supply.

Well after the recovery, we can probably expect the inflation rate to catch up. That's partly what risk asset markets are pricing in right now.

[Silberman]

US Wholesale prices are up just 0.1% in November, 0.3% in October and 0.4% in September, trending towards deceleration over this period.  Overall, wholesale prices are up just 0.8% from a year ago, which is far below the Fed's target annual inflation rate of 2% and despite the unprecedented amount of money creation during the pandemic. 

The core inflation rate, which excludes volatile food and energy costs as a means of measuring attempting to more accurately measure the inflation rate that isn't subject to short term volatility, is up 1.4% in the past 12 months.  (It seems the more volatile segments of are weighing down overall inflation currently.)

Source:  https://www.sfgate.com/news/article/US-wholesale-prices-up-0-1-in-November-food-and-15794160.php

You do not see inflation there because the money did not went there, only a handful of the people used the money they received from the US government to pay rent or to buy food, most people used the money to either invest in the stock market or in this market as well, however once the bubble is burst in the stock market and people begin to sell and try to get money for their stocks that is when we will begin to see that inflation coming to the consumer market and at that point things could spiral out of control very quickly.

[el kaka22]

Honestly there is not much money to be spent right now, hence why prices are not going up this year, I understand that economy should be going lower because things are looking bleak and bad however reality is that we live in a world where not that much work is being done, meaning not much production is being done and also not many people spend money or can spend money on stuff.

Hence at the end of the day we are living in a world where inflation either can't happen since if you increase the prices a lot there won't be anyone who can buy it, or if you keep increasing the price that means inflation will be very high and you are going to live in a Venezuela like nation which USA will not be. Plus look at inflation numbers in other nations, there are some with a lot of inflation too, not every nation stayed low.

[jaysabi]

Real problems with inflation will be after several years. This money printing will be punished

While I agree with this sentiment in theory, we've been hearing this since QE started more than 10 years ago and we have not seen the rampant inflation that was promised as a result, and there's been more than enough time for it to manifest by now.  I do think that taking runaway inflation as an inevitable given at this point is more folly than it was previously considering the repeated failure of the doom-sayers who were everywhere after the housing collapse.

[bits4books]

Most likely, this is due to the fact that even those trillions of printed money went not just under the pillow and into the pockets and went straight into circulation - the reception is very confident. Buying food, medicine, salaries, utilities, and so on.

Nope, it's not that simple and it's nearly the opposite.
If all money goes into consumption you have a  lot more demand for goods which would trigger a rise in price since there are not enough of those to counter it and from that, you have a price increase. Furthermore, not having enough money in circulation around in an economy will actually trigger deflation since there is more stuff to buy and less money for it.

Inflation is more pronounced if the growth of the money supply is accompanied by universal accumulation,

People accumulating and not spending are not triggering inflation, quite the opposite.

Those people who are not inclined to save money do not cause inflation because they do not lead to the need to increase the total money supply, which would make up for the loss of funds due to hoarding.
In which case will there be more money-when 10 people save it and one spends it, or when 10 people spend it and one saves it? Any accumulation encourages the issue of new money to make up for the loss of the money supply.

[stompix]

~

Those people who are not inclined to save money do not cause inflation because they do not lead to the need to increase the total money supply, which would make up for the loss of funds due to hoarding.

Let's look at the definition:

Inflation is the decline of the purchasing power of a given currency over time. A quantitative estimate of the rate at which the decline in purchasing power occurs can be reflected in the increase of an average price level of a basket of selected goods and services in an economy over some period of time.

Ok?
Now, let me ask you what triggers a rise in price? High demand for good, right, which is determined by people spending more money to buy stuff!
See how simple it is? If people don't spend there are more goods on the market than demand, and as basic economics tells us, the price drop causing deflation.

In which case will there be more money-when 10 people save it and one spends it, or when 10 people spend it and one saves it? Any accumulation encourages the issue of new money to make up for the loss of the money supply.

Again, if the money is not entering the consumer circle it will not cause anything!
An increase in the money supply does trigger inflation, but! only if that supply is actually used.

Think of Satoshi's coins! They are still there and not influencing the price, what if he starts spending them?

[BrewMaster]

the thing is that all that money wasn't "printed", it was "minted".
it will eventually enter circulation and we will definitely see the equal size huge inflation caused by it but it won't happen this fast. but it will be inevitable.

right now we are seeing smaller rises but these are rises that would have not happened in all these past couple of months if it weren't partly because of the pandemic and partly because of the increasing money supply.

i would expect an exponential curve where we see smaller rises at first and it speeds up as months go by.

[mersal]

US Wholesale prices are up just 0.1% in November, 0.3% in October and 0.4% in September, trending towards deceleration over this period.  Overall, wholesale prices are up just 0.8% from a year ago, which is far below the Fed's target annual inflation rate of 2% and despite the unprecedented amount of money creation during the pandemic. 

The core inflation rate, which excludes volatile food and energy costs as a means of measuring attempting to more accurately measure the inflation rate that isn't subject to short term volatility, is up 1.4% in the past 12 months.  (It seems the more volatile segments of are weighing down overall inflation currently.)

Source:  https://www.sfgate.com/news/article/US-wholesale-prices-up-0-1-in-November-food-and-15794160.php

I believe the real inflation is yet to begin on the US like countries because they injected a huge amount of money into their economy to reduce the immediate effect of a pandemic on their economical crisis so there wasn't much affect on the prices but still unemployment reached an all-time high, the stock market was crashed multiple times. Inflation already striking a lot of countries and the US is not too far from getting into such effects.

[fiulpro]

Let's be clear about one thing ;
All this money when it was transferred to the people or went into the circulation , it started the economic cycle again during the pandemic which is more than essential. Now this would only work to an extent. If they use it over the USD will for sure fall in the value. Now it went like a cycle.

money creation Consumer Producer Profits to government Consumer

Now ofcourse the money that goes to the government is lower than what they generated , this was compensated by the reserves they have. Now this situation particular in the USA is relatively very good. When you think about the poor countries, the government cannot provide them with money and start their economy again so there what's happening is :
Producer is not able to sell food products because the consumers are not able to buy due to pandemic, producers have not even harvested their crops and big companies are giving them as low as 1/70 th of a dollar for 1 kg of crop.

Big companies are trying to buy out the producers and selling the crops at higher prices calling it inflation whereas it's just greed

Producer is dying , consumer is unable go cope up with the economic stress , government is not getting their taxes due to heavy inflation which is not due to pandemic , but due to greed and necessity which is generated by the big companies.

The economic circle is static and people are without jobs even working whole day for a dollar at places because the government is not able to handle the pandemic.

For once I do think we should stop talking about the big countries and focus on the small ones who are worst hit due to the pandemic.  We have to focus and spread the information , not just about the well off nations but about the worst hit ones who are generally ignored.

[Fortify]

It's actually good news in many respects that consumer inflation is staying low right now, many people are losing their jobs and it would be very unfortunate if prices were rising at the same price. You have to wonder if it will be driving a longer term debt boom however, because people are able to borrow money so easily and so cheaply. There is always a point in the cycle where too much money has been lent out and personal finances are stretched beyond breaking point - at that point the economy will begin to implode again in typical boom & bust fashion.