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24/07 Indices, page-96

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ClarkKent

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27/07/23

17:06

Post #: 69020119
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Originally posted by Doladin: ↑

Can someone please clarify for me, as I feel like I am crazy.

CPI is presented as year-on-year as a percentage change
Let's say that CPI was 7% YOY increase in June 2022. It's 6% YOY in June 2023

Everyone (traders, media, work colleagues) see a reduced year on year CPI print and celebrate as inflation reducing
However, doesn't that mean that inflation is still growing, just slightly slower? It doesn't indicate that inflation has peaked
For inflation to be reducing, it needs to be NEGATIVE of what the previous YOY number was
To return to 2019 inflation levels, we would need to see either multiple or large NEGATIVE YOY figures (with acknowledgement to seasonality)

This doesn't even consider the omissions from CPI calculation that heavily affect cost of living
My largest gripe is that the Gov/ATO has made no indication of income tax threshold adjustment, either.

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"To return to 2019 inflation levels, we would need to see either multiple or large NEGATIVE YOY figures (with acknowledgement to seasonality)"

That would be deflation, which is just as bad as high inflation.
Deflation stuffed the Japanese economy for 20 years.
Moderate inflation is optimum.

Regarding the calculations, as @Whalewatcher and @Skikko have pointed out:

XJO Value at posting: 7,455.9
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