Listening and intonation
Video: Lag effect makes inflation look higher, expert - 14 Nov 2024
Source: BBC
Listen to the video and answer the following:
Transcript
[David Bahnsen] …was up 2% month over month and 2.6 year over year which was exactly inline with consensus and as long as the shelter number, which represents close to 40% of CPI is 5% year over year, that I think it’s totally unhinged from reality. Nobody in their right mind believes that market rents on new leases are going up 5%. It is the lag effect of the way they track it that is adding about 50 bases points. The Fed knows this, the PCE, which weights shelter much lower is now reflecting the same thing. So I think they can feel pretty good about that and you see it in the bond yields as well which are really stayed quite level and even as the tenures come up over the last month, month and a half, inflation expectations are largely not, it’s most been a real growth expectations.
[Interviewer] So, if you think the inflation data we’re looking at is … a bit behind the curve, what do you make of this week’s unemployment data? What does that tell you where we stand right now with the labour market?
[DB] It’s very important for weekly jobless claims and monthly BLS, so you take three week, in the case of claims, or three month, in case of BLS averages, because there’s lumpiness that we’ve seen all year. And time and time again when it looks like the weekly claims are going to break out above 250 or when they were going to drop below 220, as you get three week averages it smooths itself out and we really do appear structurally set at a pretty benign level on weekly claims. I worry that won’t hold into the future but nevertheless right now it’s hard to have a narrative other than, that there is a reasonably benign average atmosphere on the job side. My bigger concern is longer term, which is labour participation, I still continue to be very distraught over the number of people leaving the labour force.
Video: Lag effect makes inflation look higher, expert - 14 Nov 2024
Source: BBC
Listen to the video and answer the following:
- Nobody in their right mind believes what?
- How many basis points are added?
- What has stayed quite level?
- What is the speaker's bigger concern?
Transcript
[David Bahnsen] …was up 2% month over month and 2.6 year over year which was exactly inline with consensus and as long as the shelter number, which represents close to 40% of CPI is 5% year over year, that I think it’s totally unhinged from reality. Nobody in their right mind believes that market rents on new leases are going up 5%. It is the lag effect of the way they track it that is adding about 50 bases points. The Fed knows this, the PCE, which weights shelter much lower is now reflecting the same thing. So I think they can feel pretty good about that and you see it in the bond yields as well which are really stayed quite level and even as the tenures come up over the last month, month and a half, inflation expectations are largely not, it’s most been a real growth expectations.
[Interviewer] So, if you think the inflation data we’re looking at is … a bit behind the curve, what do you make of this week’s unemployment data? What does that tell you where we stand right now with the labour market?
[DB] It’s very important for weekly jobless claims and monthly BLS, so you take three week, in the case of claims, or three month, in case of BLS averages, because there’s lumpiness that we’ve seen all year. And time and time again when it looks like the weekly claims are going to break out above 250 or when they were going to drop below 220, as you get three week averages it smooths itself out and we really do appear structurally set at a pretty benign level on weekly claims. I worry that won’t hold into the future but nevertheless right now it’s hard to have a narrative other than, that there is a reasonably benign average atmosphere on the job side. My bigger concern is longer term, which is labour participation, I still continue to be very distraught over the number of people leaving the labour force.