{"id":2125745,"date":"2023-12-15T05:17:04","date_gmt":"2023-12-15T10:17:04","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-economic-indicator-screaming-that-inflation-is-not-vanquished\/"},"modified":"2023-12-15T05:20:22","modified_gmt":"2023-12-15T10:20:22","slug":"the-economic-indicator-screaming-that-inflation-is-not-vanquished","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-economic-indicator-screaming-that-inflation-is-not-vanquished\/","title":{"rendered":"Inflation not defeated, economic indicator warns"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">12<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fthe-economic-indicator-screaming-that-inflation-is-not-vanquished%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2125745&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>Is Inflation Really Under \u200bControl? A Closer Look at NGDP Growth<\/h2>\n<p>One economic indicator \u2063is sending a clear message: inflation\u2062 is far from \u2062conquered, and the Federal\u200c Reserve&#8217;s monetary policy is still too loose. This indicator\u2063 is known as <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/major-financiers-warn-fed-may-spike-interest-rates\/\" title=\"Major Financiers Warn Fed May Spike Interest Rates\">nominal gross domestic product<\/a> (NGDP) growth, which measures economic output \u200bbefore adjusting for inflation.<\/p>\n<p>While other signs may suggest that inflation\u2062 is receding &#8211; such as falling \u2064inflation rates,\u2063 decreasing\u200d inflation expectations, and \u200cmoderating wage\u2062 growth\u200b &#8211; NGDP growth tells a different story. In the third quarter, \u200bNGDP experienced a surge, growing at an\u2062 impressive\u2064 annualized rate of nearly 9% \u200c- the fastest growth \u2064in 20 years, \u200bexcluding the numbers seen during \u200bthe pandemic reopening.<\/p>\n<p>NGDP is considered a crucial signal of how\u200c the economy is performing by\u2063 monetary policy experts,\u200d including former Fed Chairman Ben Bernanke. It \u2064measures total spending across the economy, and rapid \u2063growth indicates that people are spending freely. However,\u2062 without a significant increase in productivity or labor force growth, this \u2062excess spending is likely to result in inflation.<\/p>\n<p>Joseph Carson, an economic consultant, highlighted\u2063 in\u200d a\u200b recent analysis that the past three months of NGDP growth have been the strongest since the mid-1980s. He suggests that this\u2064 rapid growth should prompt the Fed to\u2063 tighten\u2064 its monetary policy, a significant shift from \u200dthe current expectation of rate cuts.<\/p>\n<p>According to the Mercatus Center at George Mason University, monetary policy \u200dis currently \u200dthe loosest it has been since 1997. This suggests that the economy is\u2064 &#8220;warmer&#8221; \u200bthan many believe, \u200das stated by economist David Beckworth.<\/p>\n<p>However, it&#8217;s \u200dimportant to consider other factors that may diminish the significance of NGDP growth as a signal. Firstly, NGDP\u2062 growth\u200c could quickly moderate, as the latest data only covers the third quarter. Additionally,\u200d there \u2063is\u200c a divergence between NGDP and nominal gross\u200d domestic \u2064income (NGDI), \u200dwhich measures\u2062 output\u2063 based on total incomes rather than spending. While the two measures should\u200d be equal, NGDI has grown\u200d at a\u200d slower rate this \u200byear.<\/p>\n<p>Despite these mitigating factors, there are still indications that the economy is running hot. The stock market has \u2062seen significant gains, and the unemployment rate is historically \u2063low. Falling \u2062inflation does not guarantee a decrease \u200cin \u200bprice pressures, as seen in the 1970s.<\/p>\n<p>Ultimately, NGDP growth is \u200cjust one piece of the puzzle. While it was\u2062 strong in\u200d the \u2063third quarter, it aligns with\u2064 other data showing that inflation remains high. However, it\u2064 remains a crucial metric to monitor, \u200cand \u2062a\u200c strong \u2062NGDP number\u2063 for the fourth quarter would indicate that the\u2063 economy is hotter than anticipated.<\/p>\n<p><strong>Read more:<\/strong> <a href=\"https:\/\/www.washingtonexaminer.com\/opinion\/is-inflation-really-under-control-a-closer-look-at-ngdp-growth\">Is\u200d Inflation Really Under Control? A Closer Look at\u2063 NGDP Growth<\/a><\/p>\n<p> <\/p>\n<h2> How does the surge in \u2062NGDP growth indicate excess money in the economy and potential inflationary pressures?<\/h2>\n<p><span>  Nt increase in productivity, \u200cthis surge in\u200d spending can lead to \u2062inflationary pressures.<\/p>\n<p>So why is NGDP growth a cause for concern?\u200b First, it indicates \u200dthat there is excess money in the \u2064economy. When there is more money available, \u200dpeople\u2062 tend to \u2064spend more, leading to increased demand for goods and services. This increased demand can push up prices, leading to inflation.\u2060\u2062<\/p>\n<p>Second, the surge \u2064in NGDP growth suggests that \u200dthe\u200c Federal Reserve&#8217;s\u2064 monetary policy may \u200cbe \u2064too loose. The central bank has implemented various\u2064 measures to \u200dstimulate\u2064 the economy, such as keeping interest rates \u2063low and injecting liquidity into financial markets.\u2062 While\u200b these policies\u2063 have been effective in supporting economic \u200drecovery, they also carry the risk\u200d of fueling inflation if not properly managed.\u2060\u2062<\/p>\n<p>Furthermore, the surge in NGDP growth \u200bis particularly concerning given the current supply chain \u200cdisruptions and rising energy prices.\u200c These factors can exacerbate\u2063 inflationary pressures \u200cand make it even more challenging for the Federal Reserve to\u2064 <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/american-businesses-see-largest-producer-price-surge-since-tracking-began\/\" title=\"American Businesses See Largest Producer Price Surge Since Tracking Began\">maintain price stability<\/a>.\u2060\u2062<\/p>\n<p>Some \u200dargue that the surge \u2063in NGDP growth is simply a transitory phenomenon, influenced by the unique circumstances \u200cof the post-pandemic recovery. They believe that as\u2063 supply \u200bchains stabilize and the \u200deconomy adjusts, NGDP growth\u200d will naturally moderate, alleviating concerns of excessive inflation.\u2060\u2062<\/p>\n<p>However,\u2062 others are not convinced. They point to the fact that even \u2064before the\u200d pandemic, \u2062NGDP growth had been consistently strong, \u200cindicating \u2063underlying\u200c structural\u2063 issues that cannot be ignored. They argue that \u2062the Federal Reserve needs to take proactive measures to rein in NGDP growth and prevent inflation from spiraling out of control.\u2060\u2062<\/p>\n<p>Ultimately, whether\u2064 inflation is truly under control or not is a \u200dcomplex question. While there\u200d are signs of inflation receding in certain areas, the surge\u2063 in NGDP growth \u2063raises red flags and highlights the\u200c need for \u200ccaution. The Federal Reserve must carefully monitor this indicator \u2062and take \u2063appropriate action to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/swiss-national-bank-exits-negative-rates-era-with-0-75-hike\/\" title=\"Swiss National Bank exits negative rates era with 0.75% hike\">ensure price stability<\/a> and sustainable\u200b economic growth.\u2060\u2062<\/p>\n<p>In conclusion, the surge in NGDP growth\u2064 suggests that inflation\u2062 may not be as under control as some believe. It is\u200d crucial for policymakers to recognize the risks \u200bassociated with excess money in\u200c the\u200b economy and implement measures to prevent inflation from spiraling out of control. Only through\u200d vigilant monitoring and prudent policy decisions can we <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/marketmind-markets-find-feet-after-apple-topples\/\" title=\"Markets stabilize after Apple's fall.\">maintain economic stability<\/a> and protect the purchasing power \u2064of\u2062 individuals and businesses alike.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A key economic indicator suggests inflation remains unconquered and the Federal Reserve&#8217;s monetary policy is excessively loose. Nominal gross domestic product (NGDP) growth, which measures economic output before adjusting for inflation, supports this claim. Additionally, the Biden administration has announced Medicare rebate medications<\/p>\n","protected":false},"author":1,"featured_media":2125746,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[538],"tags":[],"class_list":["post-2125745","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2125745","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2125745"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2125745\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2125746"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2125745"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2125745"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2125745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}