CPI will beat by a mile. 🚀🚀🚀 incoming. via /r/wallstreetbets #stocks #wallstreetbets #investing

CPI will beat by a mile. 🚀🚀🚀 incoming.

We already had a huge jobs number beat, entirely due to an adjustment in population size (BLS underestimated the number of undocumented immigrants?) and population composition (BLS underestimated how many old people died from COVID?). Now we’ll have a CPI beat, because the basket is changing. Per the BLS website “Starting in January 2022, weights for the Consumer Price Index will be calculated based on consumer expenditure data from 2019-2020. The BLS considered interventions, but decided to maintain normal procedures.”

The CPI basket will be influenced by consumption patterns in 2020. As we all know, many people opted to become homeless, took advantage of the eviction moratorium or moved back in with their parents. That will decrease the all-important weight of rents. Nobody drove for a better part of the year, so gas will be downweighted. People used fewer services, so those will have a lower weight too. Childcare in particular comes to mind, as kids stayed at home. On the flip side, toilet paper and disinfectants will be huge. Bottom line, these weights will be lower for what people want right now and what is getting pricier right now.

I’m predicting a 6.5% surprise and a face ripper rally.

Submitted February 10, 2022 at 02:08AM by KahlVados
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