As regular HOTLINE readers know, our bet is that inflation will come down over the next six months to the still high 4 to 6% range. The fall in commodity prices and low market interest rates are signaling a fall in inflation.
BUT: Laffer Associates has a fascinating analysis of the month-by-month inflation rates. The table below shows that for the next three months the inflation numbers that drop out of the year-over-year price calculator were low. Those numbers from a year ago are 5.6% for July 2021, 4.1% for August, and 5% for September.
Monthly Consumer Price Index
As Laffer puts it:
“If the next three month’s numbers being added exceed 5.58% (next month), 4.08% (month after next), and 5.04% respectively, the CPI measured inflation will be larger than 9.1% for the months of July, August, and September. Does anyone believe that any one of, let alone all, the numbers for the next three months will be lower than these?”
So it won’t be until October before we see an improvement in the official inflation numbers. That’s REALLY bad news for the Democrats in November.