Consumer Price Index and the Producer Price Index Rise: Economy Growing Still (Transactional Platform Theory Development)

Will inflation still nip at our paychecks like little pariah's snapping the kernels of savings right from our fingertips? Snip snip be careful because these little inflationary nibbles do make everything else a little more expensive.  However, in general inflation is coming down and that is a good thing. It could be a sign of a new homeostasis as an economic benchmarks that balances between inflation and growth. That will depend on what happens in the next few quarters (Sounds good anyway. Maybe not? 🤷.) 

(The ultimate goal might be to increase the economy by expanding various sectors that minimize inflationary pressure at the root. This is why I think supply chain, human capital, resource allocation, innovation/science, expanding new markets/product lines, and stronger institutional focus can lead to growing economies in a more unified manageable level. Its a thought anyway. It encompasses much more than one might initially think. Perpetual Sustainable Economy.  )

The following was taken from the BEA Consumer Price Index for Feb, 2024:

"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in February on a seasonally adjusted basis, after rising 0.3 percent in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.2 percent before seasonal adjustment. 

Source

The index for shelter rose in February, as did the index for gasoline. Combined, these two indexes contributed over sixty percent of the monthly increase in the index for all items. The energy index rose 2.3 percent over the month, as all of its component indexes increased. The food index was unchanged in February, as was the food at home index. The food away from home index rose 0.1 percent over the month." (BEA, March 12, 2024, para 1, 2)

Two articles are provided. This one because the author was one of the first to post on the topic. NBC Consumer Prices Climb (Must be a digital nomad.). The other puts the inflation reading into its broader perspective which is not as bad as a falling sky perception.   Inflation since 1872  

You can also read a White House press release and how they break down core inflation into core goods, core services excluding housing, and housing in February 2024 CPI Report. They provide a solid explanation and you will want to read it to understand how such events are evaluated and perhaps some of the next steps that might be eventually taken. 

You may also ponder the Producer Price Index Summary. This metric lets us know that inflation might still have significant lift in the near term. 

"The Producer Price Index for final demand rose 0.6 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices increased 0.3 percent in January and edged down 0.1 percent in December 2023. (See table A.) On an unadjusted basis, the final demand index advanced 1.6 percent for the 12 months ended in February, the largest rise since moving up 1.8 percent for the 12 months ended September 2023." (US. Bureau Labor, March 13, 24, para 1).

Initially I was thinking when the labor numbers came out that it might be time for a rate cut but this inflation information would counter some of that thought on timing. It looks like we are trying to glide the economy into a soft landing but keep experiencing economic lifts.

Discussion on theory....

It appears that the economy is still growing. From my research interests, it is modeled COVID forced the U.S. to go more online and that, along with infrastructure improvements, could lead to a higher Digital Era platform for a large country like the U.S.. COVID happened after the initial theory but it seemed to do well explaining quick fundamental market transactions. Thus, it was projected during COVID that in '23/'24 we will begin to see a higher economic platform start to emerge. If inflation declines but growth stays high, we may have meet a threshold for a new economic platform (I'm not sure if there are actual metrics for platform changes. In the past they may have took decades but this era a matter of 5 years to an initial start. Think of how fundamental things have changed in the past 5 years ranging from infrastructure to AI.) A type of digital era renaissance where new technology and socio-cultural shifts that create greater focus on innovation, human capital, and advanced manufacturing. With theory development one should accept that there is a null. A null is equally important.