We’ve been playing around with AI tools and we asked ChatGPT to read the recent BLS CPI release and create a chart from the data and something struck us immediately when the chart was generated. Can you see the major issue with inflation?
The thing that immediately jumped out was that the vast majority of dis-inflation came from energy related items. This begs the question, if oil, gas, electricity suddenly spikes due to geo-political risk or disruptions or higher demand from things like AI, will it will send inflation higher?
Another observation is that the items that had inflation increases such as transportation services, services, food away from home are all highly dependent on labor.
It won’t help the situation that airline flight attendants are striking demanding higher wages. Uber drivers are also expected to strike today. All of this on top of generous pay raises for pilots, UPS workers, and others such as the writer’s guild.
This is all coming during a period where there is declining labor participation as we wrote about in, “Labor Participation Down 676,000” that continues to deplete the labor force as more and more baby boomers retire and not enough incoming labor to replace them.
The only thing to do is to think, plan and act strategically so stay tuned, stay profitable and stay solvent…