Inflation is pretty sticky at the moment and seems to be climbing a little which means we are operating at a much faster pace than before. On the surface that appears to be a negative thing based on a short stock dip. That can be a good thing if we can figure out ways to reduce inflation. For about 15 years I have been discussing human capital and Digital GDP through a rapid innovation transactional theory and how the U.S. may have moved into a higher performing platform based on a type of digital renaissance.
(I checked my stocks the day after the CPI announcement and almost all went red that day except a few. Most bounced back the next day but there still is a heavy red going on. I am considering those greens on my watch list as potential hedges so if one market goes down those go up. Not stock advice but just an observation on fickleness.)
Thinking about human capital and the digital era (i.e. infrastructure, technology, etc.) I came across an interesting study on Asymmetric threshold effects of digitization on inflation in emerging markets that seems to discuss that investment in education and digitization leads to lower inflation if countries could reach a certain threshold.
Let us play with this idea a little. If we improved access to higher education, the quality of education and the cost of education (I think the same can be said for training), along with new technologies (and infrastructure) we can lower inflation while still having higher growth rates (relative to the size of the country).
(Bumping up into a new platform Economic-Sociological Platforms)
Maybe or maybe not? What do you think? We don't want inflation to rise but we do want the economy to grow...are there ways to do that?
A couple of good articles:
Morning Star-March CPI Report: Why Is Inflation Still So Sticky?BEA Consumer Price Index Summary March 2024 Quoted....
"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in March on a seasonally adjusted basis, the same increase as in February, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.5 percent before seasonal adjustment.The index for shelter rose in March, as did the index for gasoline. Combined, these two indexes contributed over half of the monthly increase in the index for all items. The energy index rose 1.1 percent over the month. The food index rose 0.1 percent in March. The food at home index was unchanged, while the food away from home index rose 0.3 percent over the month.
The index for all items less food and energy rose 0.4 percent in March, as it did in each of the 2 preceding months. Indexes which increased in March include shelter, motor vehicle insurance, medical care, apparel, and personal care. The indexes for used cars and trucks, recreation, and new vehicles were among those that decreased over the month.
The all items index rose 3.5 percent for the 12 months ending March, a larger increase than the 3.2-percent increase for the 12 months ending February. The all items less food and energy index rose 3.8 percent over the last 12 months. The energy index increased 2.1 percent for the 12 months ending March, the first 12-month increase in that index since the period ending February 2023. The food index increased 2.2 percent over the last year. (BEA, March CPI Index, 2024, para 1-4)
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