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The Inflation Beat
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Inflation Forecasting Methodologies
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October 2019 US Inflation Rate: 1.77%
      The inflation rate in October of 2019 moved slightly higher to 1.77% year over year Vs. September's 1.73%.  The overall trend in inflation has been lower since peaking at a rate of 2.95% in July of 2018.  It appears for now that inflation bottomed in early 2019 at a rate of 1.50% and has held steady at the current rate.  

     The short-term forecast for inflation is for it to stay around current levels with a bias to the upside, although only slightly.  For more detials on the forecasting methodologies, continue further down this page.

     The rate of inflation has been well under control to which both wages and investment returns have handidly beat the rate of inflation in the most recent 12 months time.  This has been the case especially for wages, since the second half of 2014.  I'll show a chart that compares the year over year rate of inflation Vs. wages for nonsupervisory production workers that goes back to the mid 1960's.

     The red line is the rate of inflation while the blue line is the percent change in average hourly earnings from the previous year.  When the blue line is above the red line, then the wages gains provide an increse in purchasing power over the previous year.

     As you will see, this is not always the case.  However, since the 2nd half of 2014, wages have been positive over the rate of inflation. This has been very positive for the economy as consumers who are working are seeing strong gains in purchasing power.
     Looking at what else beat the rate of inflation, see the charts below.  Investors that are more in tune with inflation should be more likely to be able to beat it.  At least that's the goal here.  

Inflation Forecast
     Below is an array for brevity on the metrics that are either an inflationary force or a deflationary force.  For the time being, I expect inflation to be steady with a slight bias to the upside.