More Good News on Inflation (revised, updated)
My Monthly Hopium Subscribers Political Briefing Is This Friday At Noon EST - RSVP Today!
Friends, I am re-sending today’s post for somehow I sent an earlier draft that I had not finished editing. Sorry about that. Please use this one if you intend to share it with others. All the news is still really good! Now the grammar is too.
More good inflation news - The Bureau of Labor Statistics released its May inflation report this morning and in May prices rose 0.1%, 1.2% on an annualized basis. On an annualized basis inflation has only risen 2.4% in the last 3 months, well within the Fed’s target. Food prices have risen by less than 1% on an annualized basis over the last 3 months. The Fed appears to have done its job - inflation is down, and growth is strong.
As we’ve been writing it’s time for the country to find a new and better narrative about the American economy today (here, here here, here). Our recommendation is that it go something like this:
the American recovery from COVID has been the best of any advanced nation; economic growth remains robust; in recent months the unemployment, uninsured and poverty rates have hit record lows; the deficit has come way down; the President’s ambitious agenda to build things here at home has begun to have a very positive impact on the economy; real wages and incomes are in positive territory again, and inflation appears to have returned to a pre-pandemic, pre-Russian invasion of Ukraine and more sustainable place.
Through their grit, resilience, and hard work the American people have gotten through this rough patch in our history, and have once again made the American economy the envy of the world. Well done all. We need to take the good news when it comes, recognizing we still have a lot more to do.
But let’s be very clear - far more is going right today in America than wrong. It is time for those who spend so much time talking down this great country to join us in acknowledging the progress we’ve made, for this progress isn’t just the progress of Democrats or Joe Biden, it is American progress to be celebrated by all.
As we like to say here - Joe Biden has been a good President. The country is better off. The Democratic Party is strong.
Here’s a statement from our colleague Rob Shapiro who has been writing for months that the news on inflation and incomes was better than was understood:
The Biden administration has pulled off a remarkable two-step—at once, beating inflation and expanding employment. The new report from the Bureau of Labor Statistics shows that the Consumer Price Index (CPI) rose just 0.1 percent in May. Retrospectively, prices increased 4.0 percent over the preceding year—and looking forward, the CPI rose over the last six months at an annual rate of 2.75 percent. Moreover, inflation will likely continue to slow this year: The Federal Reserve engineered the strong disinflation of the last half year by raising interest rates 10 times from March 2022 to May 2023, so given the normal time lag between changes in interest rates and prices, inflation over 2023 should be considerably less than 3.0 percent.
The sharp slowdown in inflation is broad-based. Rising energy costs driven by OPEC and Putin’s invasion of Ukraine were the leading factor in recent inflation. But over the past year, gasoline prices fell 19.7 percent; and looking forward, gas prices over the last six months fell at an annual rate of 22.8 percent. To be sure, food prices rose 6.7 percent over the last year, but looking forward again, those prices increased over the last six months at an annual rate of just 3.0 percent. Similarly, new car prices rose 4.7 percent over the past year while looking forward they increased over the last six months at an annual rate of just 2.2 percent. The big exception is housing costs, which rose 8.0 percent since May 2022 and increased at an annual rate of 8.0 percent over the past six months. But changes in housing costs typically lag other goods and services, so we can expect some relief there in the second half of this year.
Lots to be hopeful about today. This inflation data is very good news.
Events! - We have two Hopium events coming up. Subscribers can upgrade to paid and get some additional events each month by clicking on the button below. Lots to talk about! Look forward to seeing everyone soon.
Friday, June 16th, Noon EST- June Political Briefing With Simon - RSVP
Wed, June 21st, 1pm EST - Hopium Paid Subscribers Briefing and Hangout With Simon - RSVP
You can also catch me speaking to these great grassroots groups in the coming days: (you can find info on how to request me for an event here):
Tues, June 13th, 8 pm EST - Crimson Goes Blue Event (Private)
Tues, June 13th, 9pm EST - San Diego Swing Left, Indivisible, Other Groups - RSVP
Tues, June 20th, 8pm EST - Airlift Zoom Fundraiser - RSVP
Thurs, June 22nd, 9 pm EST - Blue CD2 New Mexico Fundraising Event - RSVP
Gavin Newsom on Fox News - Our good friend Gavin Newsom did a sit-down with Sean Hannity yesterday and knocked it out of the park. I will post the whole interview when it is available but note two things here in this clip:
clear evidence of how spent and hollow the “Biden has been a bad President” narrative has become. It’s LOL ridiculous when you hear Hannity recite it.
Governor Newsom’s use of one of our core data points here at Hopium - Biden six times as many jobs as the last 3 GOP Presidents combined!
Keep working hard all - Simon
For those especially worried about how we get people to understand all the great work we've done, I suggest that we're at the stage in this process where people are going to start noticing it in their own lives more and more over the next 18 months. We need to keep shouting the data from the rooftops, but we're also going to start getting a big assist from the compounding effect of good policy over a sustained period of time. Give yourself the treat of watching the following clip from President Clinton's 2012 DNC Convention Speech for exactly 3 minutes (I have it cued to start in the right place).....history so often repeats itself. Tell me that you couldn't easily replace the name Obama with Biden, and Bush with Trump, and the story is nearly identical. MAGA will keep being appalling and horrible my friends....but we're entering a wonderful new phase of our economic recovery.....the part where people #FeelIt!
https://youtu.be/i5knEXDsrL4?t=1081
This is all great news. Wrt Housing prices- and I apologize for the essay- I think it'd benefit ourselves to ask why Housing seems to be a blind spot for many Dems at state-level leadership. In New York, for example, Governor Hochul, State Assembly and Speaker Carl Heastie, and Senate Majority Leader Andrea Stewart Cousins haven't passed any major housing reforms since 2019. This is despite having a super majority in both chambers, which would allow the legislature Dems to hypothetically enact any housing reform they want, no matter how incremental or how big. This year- despite multiple rent records being broken across the city and state- New York is getting neither significant new home construction nor renter and homeowner protections. This issue only exacerbates homelessness, which flows downwards to GOP messaging on crime and negative perception of Dem-led cities. New York, as well as cities like LA, Portland, and SF, are more than likely hurting voters' perception of Dems and our ability to better quality of life. I think it's important that we ask ourselves why Dem supermajorities in places like New York state don't act like the one-vote majorities in Michigan and Minnesota.