Paul Krugman

Paul Krugman @paulkrugman

Shelter is about 40 percent of core, so if it's really growing only 3 percent — the historical norm — that would subtract about 2.5 from core, giving us 4.5 percent. Still high but a lot lower 3/ — PolitiTweet.org

Paul Krugman @paulkrugman

How much difference would this make? Latest month has core at 7.1 percent, shelter at 9.4 percent 2/ https://t.co/7vWcVU1uO9 — PolitiTweet.org

Paul Krugman @paulkrugman

Aha! BCA research has in fact calculated seasonally adjusted versions of market rent measures, which show shelter inflation back to pre pandemic rates 1/ https://t.co/xqgzNnVRP9 — PolitiTweet.org

Paul Krugman @paulkrugman

RT @stone_lis: Next Wed, 10/19, 6:30 pm EST -- @paulkrugman in conversation with @GagnonMacro, @Claudia_Sahm & @karlbykarlsmith. Register… — PolitiTweet.org

Paul Krugman @paulkrugman

And this is quite a tidbit: "In 2011, then-Governor Rick Scott, a Republican, closed the state agency that had limited home building in vulnerable areas, calling it an impediment to growth. Coastal construction jumped." 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

This is a really informative, well-reported article. But I wonder about the framing. Is the problem really that coastal Florida real estate will become unaffordable, or is it that people shouldn't be building there at all? 1/ https://t.co/HNlQc7un6v — PolitiTweet.org

Paul Krugman @paulkrugman

RT @brianklaas: I know this sounds strange but this is a really positive sign for British democracy. Polarization is so toxic in the US tha… — PolitiTweet.org

Paul Krugman @paulkrugman

RT @ANewman_forward: Thread: "economic power comes from the ability to restrict other countries’ access to crucial goods, services, finance… — PolitiTweet.org

Paul Krugman @paulkrugman

A new, different trade war with China https://t.co/2GJ0u5hFPc — PolitiTweet.org

Paul Krugman @paulkrugman

The true culprit behind inflation 2/ https://t.co/3BycrRLGQQ — PolitiTweet.org

Paul Krugman @paulkrugman

I noticed the pet services. 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

Better still, it would be helpful if the BLS updated their NTRR rent series on a regular basis! 7/ — PolitiTweet.org

Paul Krugman @paulkrugman

Actually, I don't have the expertise or resources to do this, but it would be great to have a seasonally adjusted version of the CoreLogic or Zillow rent indices, to see what happens if you use the past 3 months instead of CPI shelter 6/ — PolitiTweet.org

Paul Krugman @paulkrugman

Are people really saying this? Ben left 8 years ago. Lags may be long and variable, but not that long. — PolitiTweet.org

Paul Krugman @paulkrugman

But CPI shelter prices lag new rental rates by a year — and we've just experienced an epic surge in rental rates, but one which seems to have peaked. This makes median a poor guide to the question of the day, which is how overheated the economy is right now 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

This isn't necessarily a condemnation of the median! Shelter is a big component of prices, and usually not volatile. So median might well be a better measure of underlying inflation than prices ex-food and energy 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

Your story about recent developments would be essentially identical if you used shelter instead of median, or actually any CPI measure of core 3/ https://t.co/6IOB5BgpeV — PolitiTweet.org

Paul Krugman @paulkrugman

The important point instead is that shelter isn't a small sliver of the CPI that for a while happened to be in the middle. It's a huge chunk, so large that even if shelter isn't the median it's hard for the median to diverge much from shelter 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

I think my stylized picture may have obscured my basic point. Yes, the Cleveland Fed disaggregates shelter — it's not literally a flat section of the distribution. But that's not important 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

And the fact that shelter is basically telling us about the economy a year ago is therefore a problem. Yes, I and others should have realized this last year, when true core was much higher than measured. But that doesn't change the fact that it's a bad guide now 5/ — PolitiTweet.org

Paul Krugman @paulkrugman

You can see why shelter is often the median. But even if it isn't the median will usually be a category with inflation just slightly higher or slightly lower than shelter. So all core inflation measures are basically shelter, even when they aren't 4/ — PolitiTweet.org

Paul Krugman @paulkrugman

think of the distribution of price changes as looking like this: 3/ https://t.co/DGBhe8WWFk — PolitiTweet.org

Paul Krugman @paulkrugman

Shelter is a big block of the CPI — around a third 2/ — PolitiTweet.org

Paul Krugman @paulkrugman

This is technically correct but misleading. Median inflation is more or less shelter even when shelter isn't the median 1/ — PolitiTweet.org

Paul Krugman @paulkrugman

RT @GC_CUNY: Coming Wed 10/19, 6:30p - @paulkrugman leads a timely discussion, "Making Sense of the Unpredictable Economy" - feat. @karlbyk… — PolitiTweet.org

Paul Krugman @paulkrugman

This is a real issue for consumers — but it lags what's actually happening in the market by a full year. Not a good basis for policy. — PolitiTweet.org

Paul Krugman @paulkrugman

Yes. And "true" core, based on current market rents rather than a CPI number that lags by a year, probably lower still. But I don't think the Fed will change course yet. — PolitiTweet.org

Paul Krugman @paulkrugman

Live view of British policymakers https://t.co/T6E2yFGLyK — PolitiTweet.org

Paul Krugman @paulkrugman

Hugely important subject. If you ask me the most important geopolitical story right now, although getting little media attention, is the Biden administration's tough new approach to China semiconductors — very different from Trump's trade war, btw — PolitiTweet.org

Paul Krugman @paulkrugman

Reading the PPI report; not going to pick over the entrails. But this struck me: "Over a quarter of the September increase in the index for final demand services can be traced to a 6.4-percent advance in prices for traveler accommodation services." All about the hotels? — PolitiTweet.org