Consumer spending decent, inflation leveling, and Wall Street finally admits things are good

On Friday, we got even more evidence that in the Real America, the US economy continues to grow at a decent level. Even if prices continue to rise more than we're used to.

U.S. consumer spending rose more than expected in September while underlying inflation pressures continued to bubble, keeping the Federal Reserve on track to hike interest rates by another three-quarters of a percentage point next week.

But there was some encouraging news in the fight against stubbornly high inflation, with other data from the Labor Department on Friday showing private industry wage growth slowed considerably in the third quarter. The moderation occurred in inflation-sensitive industries like retail, construction and finance. Sectors such as healthcare and education, which are still experiencing worker shortages, saw a pick-up....

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.6% last month, the Commerce Department said. Data for August was revised higher to show spending increasing 0.6% instead of 0.4% as previously reported.

And while the Reuters report presents inflation as a mitigating effect, if you dig into the Commerce Department's report, the increase in spending rose past the rise in consumer prices for the second straight month.

The PCE price index increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.5 percent. Real DPI increased less than 0.1 percent in September and Real PCE increased 0.3 percent; goods increased 0.4 percent and services increased 0.3 percent.

I'll add that the core PCE price index is actually 0.45%, which translates to just over 5% on an annual basis, and the last 3 months have had a total PCE core increase of 1.0%. Not that bad, really.

After adjusting for inflation, consumer spending growth has certainly slowed down in 2022, but it's still higher than it was at the start of the year.

When digging into the spending figures, you can see where the changes of 2022 have kicked in. Goods spending has been largely unchanged after the big increases of 2020-2021, and services have driven consumer spending growth for this year.

And here is a trend in 2022 that has really intrigued me. As food inflation has continued throughout the year, Americans have downshifted and spent less at grocery stores, but have spent more on food outside of home and in travel.

It also seems that Wall Street is finally waking up to the reality that the economy did well in Q3 2022, and is on track to have an October to remember.

Stocks rose on Friday despite a tumble in Amazon shares after economic data pointed to slowing inflation and a steady consumer.

The Dow Jones Industrial Average closed 828.52 points, or about 2.6%, higher at 32,861.80. The S&P 500 added nearly 2.5%, to close at 3,901.06. The Nasdaq Composite ended up about 2.9%, to close at 11,102.45.

On a weekly basis, the major indexes made notable gains. It was the fourth positive week in a row for the Dow, a first since a five-week streak ending in November 2021. The 30-stock index is up 5.7% this week in its best performance since May. It’s also on track for its best month since January 1976.

You may be annoyed by paying more for products than you did a year ago, but things are pretty darn good in the Real Economy, no matter what corporate media and GOP politicians try to tell you. And I think the bigger danger with the Fed is them being more concerned with the annoyance of inflation than the real disruption of unemployment and economic insecurity.

Besides, this is the inflation we all should be more concerned about controlling.

Do I have this right? Shell raked in $9.45 billion in profits last quarter and has announced $4 billion in stock buybacks, but American consumers are supposed to blame government spending for inflation?

— Robert Reich (@RBReich) October 29, 2022

GDP is back and growing! Actually it was always growing, but inflation went down

Haven't heard GOPs try to snark about "recession" recently. Today's GDP report explains why.

JUST IN: The US grew at a 2.6% pace in Q3, a big rebound from the negative growth in the first half of the year. (-0.6% in Q2 and -1.6% in Q1).

The US isn’t in a recession now, but fears are still high for 2023.

— Heather Long (@byHeatherLong) October 27, 2022

Read the report right here. GDP growth is back baby!

How we did swing to this level of growth? Mostly because the drop in gas prices led to a drop in inflation, unlike how the higher inflation of Q1 and Q2 caused real GDP to go down. This means that a lower rate of growth in actual dollars translated into solid real GDP growth.

Current-dollar GDP increased 6.7 percent at an annual rate, or $414.8 billion, in the third quarter to a level of $25.66 trillion. In the second quarter, GDP increased 8.5 percent, or $508.0 billion.

The price index for gross domestic purchases increased 4.6 percent in the third quarter, compared with an increase of 8.5 percent in the second quarter. The PCE price index increased 4.2 percent, compared with an increase of 7.3 percent. Excluding food and energy prices, the PCE price index increased 4.5 percent, compared with an increase of 4.7 percent.

So really not a lot changed throughout the first 9 months of 2022, except that price increases leveled off after June. And when you remove the rollercoaster ride in inflation for gas and the effect of higher food prices, we see decent growth in general consumption for 2022, even if it slowed a bit in Q3.

Still, 2-3% increases in underlying consumption isn't bad, and is not what you'd see in a recessionary situation. However, there is another area of the economy that does seem to be declining quickly.

The Fed rate hikes have triggered a housing recession.

There was a massive drop in construction in Q3 for both business buildings and residential.

Residential investment in Q3: -26.4% -->basically as bad as spring 2020 when the pandemic first hit.
Biz structures in Q3: -15.3% pic.twitter.com/6FqPjoV1nH

— Heather Long (@byHeatherLong) October 27, 2022

The residential homebuilding sector took away nearly 1.4% of total GDP growth in Q3 after subtracting 0.93% in Q2. This seems to be a 1-2 punch of Bubbly home prices in late 2021 and early 2022 followed by higher interest rates. And that home-building recession along with lower inflation and gas prices in Q3 are all the more reason that the Fed should stop looking backward or trying to hit a pre-COVID target of 2%.

Instead, the Fed should do interest rate policy based on what the economy and inflation tell us today. Right now, data indicates we have a low-to-moderate growth economy with low unemployment, and inflation already cooling toward an annual rate of 4-5%. I don’t see this as bad thing, and me and I bet a whole lot of others would accept this as a new normal, even if Wall Street bankers and other oligarchs won’t.

And in a sane world, this situation would stop all of the INFLATION PANIC garbage we continue to hear, and instead make us ask how we can keep this going in 2023.

Professors crunch the numbers, and Michels flat tax scheme would screw a whole lot of us

Earlier this month, Tim Michels opened up his yapper at a Tavern League event in Baraboo, and mumbled about how he wanted to look into instituting a flat income tax in Wisconsin, should the state be so stupid to elect him governor.

At the time, I went over how this would screw over a lot of Wisconsinites, but some actual economic pros went further than I did, and used state data to break down the numbers.

In a tax plan endorsed by Republican Tim Michels, the nonpartisan Legislative Fiscal Bureau “projects that some 2.35 million Wisconsin taxpayers (72.5% of all filers) would see their taxes go up by $249 per year, on average.”https://t.co/ZSL4XKWpx7 pic.twitter.com/8Xc4XOGWZe

— Dan Shafer (@DanRShafer) October 27, 2022

Marquette University professors Phil Rocco and Sam Harshner wrote the linked Op-Ed that Shafer printed in his excellent Recombobulation Area site, and the professors note that most us would be paying up under Michels’ flat tax scheme.

A new analysis prepared by Wisconsin’s nonpartisan Legislative Fiscal Bureau (LFB) shows why. In order to enact a flat tax without significant spending cuts (a “revenue neutral” plan), the LFB estimates the new flat tax rate would have to be 5.22%.

Were the state’s current tax code replaced with a 5.22% flat tax, the LFB projects that some 2.35 million Wisconsin taxpayers (72.5% of all filers) would see their taxes go up by $249 per year, on average. By contrast, only 2% of filers would see their taxes go down (see the dark blue bars in the chart below).

While the majority of Wisconsinites would pay more in state income tax under this proposal, those at the top of the income distribution will pay less. As the chart below shows, those who benefit most handsomely from the proposal are filers with annual incomes in excess of $1 million. By contrast, as the LFB reports, “the largest estimated tax increase is incurred by filers with Wisconsin AGI between $20,000 and $25,000 (55.2%).”

(If you want to check out the LFB’s analysis for yourself, here it is.)

Those numbers are based on the 2022 income tax brackets. Given that many Wisconsinites are likely to get a back-door tax cut due to inflation and tax indexing in 2023, there likely would be even more Wisconsinites that pay higher taxes, with a higher increase.

When the reality of higher taxes on most Wisconsinites was mentioned to Michels at the Tavern League event that he rambled about the flat tax at, he basically did an “Oops”, and said he wasn’t planning to raise anyone’s income taxes.

For that to be true, and in order to have a flat tax still be put in place in Wisconsin, Rocco and Harshner point out that would mean cutting the state’s income tax rate to the current lowest rate, which is 3.54%. And if that happens, then major budget cuts are going to have to happen in a lot of places.

Assuming the state legislature is unwilling to pass significant new regressive sales or property taxes, financing a flat tax would require massive spending cuts. To put this in context, let’s consider what it would mean to cut $3.86 billion from the state budget. Today, $3.86 billion accounts for nearly half of the individual income taxes the state collects each year. As the table below shows, this is also equal to 18% of total general purpose revenues in Fiscal Year 2023.

This amount is also half the size of aid to K-12 schools, and four times greater than the total amount of shared revenue that supports all county and municipal services each year.

And I’ll remind you that schools and municipalities are already struggling to make ends meet due to the lack of shared revenues from state government and heavy restrictions on property taxes. This would worsen an already-unsustainable situation, and also would likely result in a sizable amount of people in need being cut off from health care and other community services.

If wrecking community schools and services even further is not an acceptable outcome (and it won’t be), then there’s going to have to be some kind of way to make up those lost revenues within a year or so. And naturally, Michels hasn’t revealed what those higher taxes would be…if he even has thought about it that far (unlikely).

Tim Michels likes to throw out a lot of words and half-baked ideas, but he has zero clue about how those ideas would affect the 99% of us that live in the non-oligarch world. He’s the epitome of the clueless CEO who never earned his way to the top, but thinks his status means that he knows more than the people who have bills to pay, and didn’t get their jobs through inheritance.

Details? Consequences? That’s for the little people to sort out. And it allows the CEO to blame those people when his stupid plan inevitably goes wrong.

Unlike 2020, most college students are back on campus today. How does that change our election?

I was investigating a Wisconsin voting trend and what it might mean for November 8, and then I saw a cover story on Capital Times that asks whether college students will have a big effect on the 2022 elections in Wisconsin,....or not?

Given how tight things usually are in this state, the votes of college students are much more important here than in most states, as a national study notes.

The Institute for Democracy and Higher Education at Tufts University estimates Wisconsin is home to over 340,000 college students. Though they are just a sliver of the eligible voting population — comprising nearly 7% — they could be crucial in a state in which candidates have won by about 1 percentage point.

“Here in Wisconsin, where we have such close races, there's almost no group too small to have an impact,” said Charles Franklin, director of the Marquette University Law School Poll.

The Tufts institute ranked Wisconsin as the No. 1 state where young voters could have an especially high likelihood of influencing election results in the governor's race and No. 5 in the senate race. That’s in part due to the state’s past close races and projected electoral competitiveness….

Voters across the nation cast ballots at historic rates in 2018 — the highest midterm turnout in four decades. The Census Bureau found turnout rates increased for nearly all age and racial groups, but the jump was especially high for young adults.

Among those 18 to 29 years old — many of them college students — voter turnout rose from 20% in 2014 to 36% in 2018, making it the largest percentage point increase for any age group. That number also exceeds youth turnout for a midterm election since the 1980s.

Tufts says that UW-Madison students continued to turn out strong in 2020, at a rate of 73%. But voter stats from the state of Wisconsin indicates that a sizable amount of UW-Madison students didn’t vote in Madison during a Fall 2020 semester that had many COVID restrictions on campus.

The dropoff in many campus-area wards in 2020 was notable compared to 2016, and many wards even had fewer voters than the midterm year of 2018.

By comparison, Wisconsinites overall cast 23% more votes in 2020 than 2018, and nearly 11% more than in 2016.

The Madison campus-area Assembly districts (76 and 77) barely had any more votes than they did in 2018, and we also saw a smaller version of this lower-than-statewide growth in turnout in several other Assembly districts with UW campuses on them. That includes the districts containing Oshkosh (District 54), Stevens Point (District 71), Eau Claire (District 91), La Crosse (District 95), and you could even include UW-Milwaukee (District 19) and Marquette (District 16) in this list.

Now consider that in Fall 2022, UW-Madison reported its largest enrollment ever, nearing 50,000 students. With that in mind, I would expect thousands more votes coming from UW-Madison student wards compared to what we saw in Fall 2020, and a lot of those votes are going to be Dem. This also makes me wonder if the people thinking Dem-held districts 54 and 71 might not be as winnable for Republicans as some pundits think, because GOPs benefitted from the lack of students on campus in those communities in 2020, and Trump still lost those districts by 9 and 7 points, respectively.

The lack of students in Eau Claire, La Crosse and Stevens Point also may have made 2020's 3rd Congressional race into a 2.6% race instead of a relatively comfortable win for Ron Kind. And maybe we shouldn't give up on Brad Pfaff beating Small-D Van Orden for that seat as a result, no matter how much the national folks are writing that race off.

Oddly, I don't see a major bump in turnout in suburbs or somewhere else that would have had a lot of at-home college students. Many districts that seemed to have the highest bump in turnout vs 2018 were places that were turning Trumpy, reflecting vote-casting that almost seems too good to be true.

Fall 2020 was a very weird time, especially on college campuses, and things have reverted back towards the pre-COVID normal today (although like most things in 2022, it's not the same). It's something both pollsters and casual people should be aware of, but don't seem to be.

A big (ab)user of Wisconsin's Big Giveaway? Ron Johnson!

Well this was an interesting revelation from Madison's Channel 27 last night.

Between 2011 and 2015, the trust fund set up by Sen. Ron Johnson paid at least $400,000 annually in Wisconsin taxes.

Since 2016, however, the fund hasn't paid any state taxes. https://t.co/OaZ5AL65pg

— A.J. Bayatpour (@AJBayatpour) October 24, 2022

Oh really? How did that happen?

Tax records obtained from the Wisconsin Department of Revenue showed the Ronald Johnson and Jane Johnson Irrevocable Endowment Trust paid between $400,000 and $920,000 annually in state taxes between 2011, when Johnson was sworn into his first term as a U.S. Senator, and 2015.

From 2016 on, however, the trust fund didn't pay a single cent in state taxes. Johnson's campaign said it was because the fund was able to apply for Wisconsin's Manufacturing and Agriculture Tax Credit.

State Republicans, under former Gov. Scott Walker, enacted the credit in 2011. It took effect in 2013 and scaled up in size to its current level of 7.5% in 2016, the same year Johnson's trust fund no longer owed any state taxes.

Ah yes! The Manufacturing and Agriculture Tax Credit, which the Wisconsin Budget Project rightfully labeled "The Big Giveaway" in 2016! Let's remind you of how that became law over a decade ago.

On a chilly late February evening, the state's deepest-pocketed business lobby held its annual awards event at Milwaukee's Pfister Hotel to celebrate its most successful legislative session in memory.

Members of Wisconsin Manufacturers & Commerce toasted state Sen. (and now Congressman) Glenn Grothman there for spearheading the "most exemplary public policy initiative in support of manufacturing in more than 35 years," a news release says....

Slipped into Gov. Scott Walker's 2011-2013 budget at the last moment, the domestic production tax credit will cost the state $360 million in revenue over the next four years and some $130 million each year thereafter, according to the non-partisan Legislative Fiscal Bureau. Critics warn the impact could be even greater, a key point in a state still struggling with budget shortfalls.

The credit applies to profits derived from manufacturing or agriculture and is available both to corporations and shareholders of limited liability companies, S corporations or others who report business income on their individual tax returns.

And the first year the M&A Giveaway was fully phased in? 2016, the first year Ron Johnson's trust fund paid $0 in state income taxes.

But wait, the Manufacturing & Ag Tax Credit is for businesses. So how is Ron Johnson's trust fund able to use it? Let's go back to the Channel 27 report.

UW-Madison tax economist Ross Milton said it wasn't surprising to see the tax credit apply to trust funds like the Johnsons'.

"More or less, the way trust taxes work is they are taxed, kind of like they're a person," Milton said. "And so it makes sense then that tax credits like this would apply if you owned a business and that business showed up in your personal income taxes, it'd also apply to your trust."

Oh, so something that is allegedly intended to encourage businesses to expand is actually nothing more than an income tax dodge for business owners. Remember, there's no requirement to add any jobs in order to take the M&A Credit.

And RoJo also likes to use his post-business trust fund to invest in things for himself.

The tax credit itself has almost no productive value but instead serves as a loophole for the very wealthy like Ron Johnson https://t.co/2aHPLqWyDG pic.twitter.com/JGD5z0Eqnb

— Don Moynihan (@donmoyn) October 25, 2022

One last note, while Ron Johnson was giving himself and his donors hundreds of millions in tax deductions in the 2017 GOP Tax Scam he and his fellow GOPs were taking away the ability for people like my wife and I from writing off our home mortgage interest, property taxes and charitable contributions. And we don't have an M&A giveaway to make up the difference.

RoJo and his puppetmasters are no different than the oligarchs George was talking about 30 years ago.

Ron Johnson last ran in 2016, Evers in 2018. Voting patterns could well be different now

I wanted to go off of Dan Shafer's excellent breakdown of all 99 Assembly races in Wisconsin (read it if you haven't already). Instead of talking about the individual races, I wanted to look at how various districts have recently voted at the top of the ballot, as there are some key trends and counter-trends to look at as election returns come in on November 8.

I used the Dave's Redistricting website to look at results by Assembly district in 3 statewide races - the 2016 US Senate race (won by Ron Johnson, up for re-election on Nov 8), the 2018 Governor's race (won by Tony Evers, up for re-election on Nov 8), and Joe Biden's 0.6% victory in Wisconsin in 2020.

I'll start with 11 districts that have been turning towards the Democrats over these 3 elections, and often in a big way. All of these are in the Mlwaukee, Green Bay and Appleton suburbs

So will this trend continue, which would hurt Ron Johnson and help Tony Evers in 2022?

In addition, Republicans hold all of these districts in the Assembly outside the now-strongly blue 14th and 23rd districts. Those were 2 of the 3 districts that flipped to Dems since 2016, and Robbin' Vos and other GOPs in the Assembly admitted defeat, turning these districts into strong Dem districts to try to prevent further losses in the burbs in other districts. But south side districts 21 and 84 definitely seem to be in play if recent trends hold up.

Conversely, I have listed 14 districts that have shown sizable movement toward the GOP, even as the statewide share of GOP candidates was lower in 2018 and 2020 compared to Johnson's victory in 2016. Most of these are in rural districts in northern and western Wisconsin, along with previously strong Dem districts in Kenosha and nearby communities (District 64) and a district that includes much of Beloit and rural western Rock County (District 45).

(Ignore District 85, I'll get back to you on that one).

You'll notice that Evers in 2018 won 3 districts that the other Dems did not, and generally outperformed compared to what Dems did when Trump was on the ballot (2016 and 2020). So is that going to benefit Ron Johnson, or are these areas going to swing back toward Dems in the midterms, and will Evers maintain his numbers here against a pro-Trump guv candidate in Tim Michels?

Oshkosh native Johnson did extremely well in 2016 in Northeastern Wisconsin, slamming Russ Feingold by large margins on his way to a 3.4% statewide victory. But both Evers and Biden did much better in these areas in 2018 and 2020 - both in the pro-GOP suburban districts, and in the pro-Dem districts in the cities of Oshkosh (District 54), Appleton (District 57) and Green Bay (District 90).

So will RoJo continue to have a home-area advantage in the 920? Or will Barnes make headway in this region, and go a long way toward increasing his chances of winning? Barnes and Dems groups are definitely going to try, as Wisconsin Eye says they are going to outspend Johnson and other GOPs on the GB/Appleton airwaves in these final weeks.

Lastly, there are still a few districts that have produced close results in each of these 3 races. In the Assembly, 4 of these seats are held by Democrats and 3 by Republicans, and which way these seats go in both Legislative and statewide races should tell us a lot about where the state is going as a whole.

There are a couple of other variables I'll look into over the next couple of weeks. But I'd sure be targeting these parts of the state hard no matter which campaign I was part of, because these areas have either swung a lot since 2016, or have stayed closely contested and flippable between one party or the other.

Michels says he'll "divest" if he wins. Just like fellow crooked CEOs Trump and RoJo

After a beautiful Saturday and a surprisingly fun Badger football game, I see this headline in the news.

If Tim Michels is elected governor, he has pledged to divest from construction company that's secured millions in state contracts over the last decade to avoid any conflicts of interest. https://t.co/7HQITJibBl

— Beaver Dam Daily Citizen (@BDCitizen) October 22, 2022

As the co-owner of Michels Corp., Republican Tim Michels has made his successful business — which has grown from a few hundred employees to more than 8,000 — a primary talking point in his campaign for governor.

If he succeeds in unseating Democratic Gov. Tony Evers on Nov. 8, Michels has pledged to divest from the Brownsville-based construction company that’s secured millions in state contracts over the last decade to avoid any conflicts of interest, as state law requires the governor to sign the state’s largest road contracts....

Beyond that blanket pledge, however, Michels has yet to provide details on how he would distance himself from the family company, such as putting his assets into a blind trust or selling company stock.

Hmmm, this sounds familiar. Let's flash back to January 2017.

When President-elect Donald Trump emerged Wednesday for his first press conference in almost six months, he did not come alone. The table next to Trump’s lectern groaned with stacks of manila folders. These were “some of the many documents,” Trump explained, “that I’ve signed turning over complete and total control [of the Trump Organization] to my sons.” Those many documents—which were hidden from view by their protective manila armor—were accompanied by a lawyer, Sheri A. Dillon, of the Washington firm Morgan, Lewis & Bockius (recent winner of the Russia Law Firm of the Year award) who spoke in a measured drone that seemed designed to hypnotize viewers into thinking that Trump’s decision not to divest himself completely from his business interests would make America great again....

Trump, meanwhile, demanded credit for meeting, or appearing to meet, the barest wisp of an obligation, whether by appointing an ethics adviser to his company or promising not to repeal Obamacare without proposing some form of alternative (though he did not specify what shape that alternative might take).

The lawyer, with her drab colors and soporific delivery, seemed intent on boring Americans into compliant indifference. Trump was a confident executive eager to get to work. He wore a flag pin and leaned on words such as beautiful, tremendous, terrific, and proud. He even found it in his heart to praise “certain media outlets” for their restraint in not publishing intelligence leaks (while decrying BuzzFeed as a “failing pile of garbage”).

Yahoo’s Hunter Walker reported after the press conference that he “asked to look at some of the documents that were piled on the table but I was told I could not because they are ‘company documents.’ ” There is something perfect about Trump’s presentation of a big stack of … something … coupled with the admonition that no one is allowed to look inside. One imagines him showing up to future press conferences with additional objects from the theater storage room. Maybe several large boxes labeled “JOBS” that he can plunk before the camera before ceding the mic to a white-noise machine or a greatness thermometer with which he can measure the country’s success while Mike Pence recites the phone book. Perhaps Trump will be our first prop president: Carrot Top, but less self-aware and more orange.

And we know how that worked out, with the latest example of this type of "divestment" at our expense coming out this past week.

NBC News: Trump Organization charged Secret Service as much as $1,185 per night to stay at Trump property.

Government rate for the night was just over $200.

Story from @annaschecter & @JuliaEAinsley https://t.co/eMzO5ujMb7 via @nbcnews

— Tom Winter (@Tom_Winter) October 17, 2022

That's the type of self-dealing that would lead a rich kid like Tim Michels to spend more than $16 million of his own money through August to try to take over a job that pays much less than Michels pays himself to "lead" his Daddy's company.

Let's also not forget about Wisconsin's senior senator, who gave himself $10 million in "deferred compensation" from his company's coffers to pay himself back for the money he spent on his campaign in 2010, and then used his time in office to help out businesses such as the one his father-in-law gave to him.

Last week marks the 2-year anniversary of this article, and how Ron Johnson deflected from real corruption with made up BS when GOPs ran the Senate.

Let's not memory-hole these things. https://t.co/pyUfXMjcTS#wiunion #wipolitics #wisen #SundayShow

— JakeEdwards (@JakeMadtown) October 23, 2022

Maybe we shouldn't elect any mediocre white male CEOs who got that position given to them not by merit, but by birth and/or marriage. These guys don't know anything about how most of us live, have only given orders vs actually doing work, and don't believe in any governing policy beyond "How can I get more money and power for me, and the people that help me?"

Again, don't believe the hype. JOBS >>>> Inflation. And "inflation" = profiteering

In today's edition of "INFLATION PANIC and why it is BS," I give you this article from the Milwaukee Journal-Sentinel,where Corinne Hess talks to UW-Madison PoliSci/Public Affairs professor Mark Copelovitch, who explains that while pumping up the economy since early 2020 (under both the Trump and Biden Administrations) has definitely raised prices, it also has brought back all the jobs lost when the COVID pandemic broke out.

Stimulus programs including individual checks and the Paycheck Protection Program (PPP) for small businesses have pushed inflation in the U.S. 2% to 3% higher than it would have been without it, Copelovitch said.

"But the difference is, we've had basically total employment recovery in the United States," he said. "That's part of the discussion that you don't hear that much — was it worth it to have a full recovery?" Copelovitch said. "European countries haven't had a full recovery."

The European Union Inflation Rate is 10.9%.

It really amazes me that we've just shrugged away how we've added 10 million jobs since Joe Biden and Dems took power in DC in January 2021, and cut the US unemployment rate from 6.4% to 3.5% . By comparison, in the same amount of time before the COVID pandemic shut down the economy (June 2018-Feb 2020), the US only added 3.5 million jobs, and only had unemployment go from 4.0% to the same 3.5%.

I'll take higher inflation for 18 months over 5 years of slow job growth coming out of the recession, like we saw in the early 2000s and after the Great Recession "ended" in mid-2009.

Professor Copelovitch points to a recent study that shows almost 2/3 of our recent inflation can be traced to supply-chain issues that will happen when businesses shut down, millions of people DIE from a virus, trade is disrupted, and workers stop accepting bad jobs at crappy pay.

As Professor Copelovich adds in the Journal-Sentinel article, a lot of the reason inflation is perceived as a big deal to worry about is because the media keeps telling us it's a big deal to worry about.

Since January 2021, there have been 12 to 15 articles about inflation for every one on unemployment, Copelovitch said, adding that hearing about a recession and inflation constantly for 18 months has shaped how people are feeling about their current situation.

"There were a tiny number about the unemployment recovery, but a ton about gas prices," Copelovitch said.

And while higher gas prices are annoying, that situation is nowhere near as disruptive as being out of work.

Know what I don't hear enough when inflation is discussed. The biggest inflation of all in the last 18 months - PROFITS.

Bigger corporate profits account for *over half* of the higher prices people are paying. pic.twitter.com/RZr5O0X4oJ

— Rep. Katie Porter (@RepKatiePorter) October 18, 2022

And why is Katie Porter one of the few Dems talking about this FACT in a time when corporate profits reached an annual rate of $3 TRILLION in the last quarter measured? And why is this not being connected back to the other obscene inflation in 2022 - spending during a midterm election?

Seems like something a whole lot of Americans would agree with, and demand real answers for. And Republicans absolutely do not have any answers for it. Frankly, they don't want this to change at all. It helps them and their oligarch buddies maintain the advantaqge when they can't win on the issues, especially the economy.

Sept Wis jobs report - Great, or mass exodus? I lean to great.

On the payrolls side, it looks a great September jobs report in Wisconsin.

For September, total nonfarm jobs increased 7,000 over the month and 63,000 over the year. Wisconsin's unemployment rate of 3.2% now stands at 0.3 percentage points below the national rate of 3.5%.

• Place of Work Data: Within the category of total nonfarm wage and salary jobs, Wisconsin added 14,400 private sector jobs during the month of September and 62,400 over the year, with monthly and annual gains in construction, manufacturing, and leisure and hospitality. State government jobs are down 700 over the year.

And add in revisions, and it was over 15,000 new private sector jobs for September. Wow, sounds like a blowout report!

But let’s not crack open too many cold ones, because the household survey told a very different story.

Place of Residence Data: Wisconsin's unemployment rate and labor force participation rate continue to better the U.S. equivalents. Wisconsin's September unemployment rate was 3.2% versus the U.S. rate of 3.5%. The state's labor force participation rate was 65.6% in September, compared with the national rate of 62.3%.

Yeah, but that 65.6% participation rate is down nearly 1% vs what we had in May, and reflects 35,000 Wisconsinites allegedly leaving the workforce in those 4 months. Over the same time period, the number of unemployed has risen by 10,000.

Both of these items can’t seem to be correct at the same time unless there are a lot of out-of-staters getting hired here in recent months, while previously working Wisconsin residents are retiring and/or leaving in droves.

Neither of those answers make much sense, and after having these surveys largely move in tandem during the recovery from COVID-induced shutdowns, there is a notable divergence between the "jobs" numbers and the "employed" numbers in Wisconsin over the last 4 months.

So what's correct? I might worry that the losses in the household survey translates over into losses in the payroll survey soon, or are already happening. Except that unemployment claims in mid-September 2022 in Wisconsin were barely half of what they were this time last year (and still are cut in half today).

Ironically, the lack of layoffs helps to explain the big “gains” in the payrolls survey for September, because there were much fewer seasonal layoffs than models bake in for the state. It’s the flip side of the stagnant job growth of the Spring, when many places were reporting trouble in finding candidates to hire in the busier warm-weather season, and because of the lower-than-normal hiring, job “growth” .

Wisconsin job change, September 2022
All jobs
Seasonally adjusted +7,000
Non-seasonally adjusted -1,800

Private sector jobs
Seasonally adjusted +14,400
Non-seasonally adjusted -24,700

The good news in that report is that jobs are still clearly in demand, as more Wisconsinites stayed on the job in September than normal, and layoffs are down. The not-so-good news is that I don't know if there are many workers available to fill spots in Wisconsin, which will limit our growth.

I suppose we could go along with Ron Johnson's wish of "coaxing" seniors back to work by cutting Social Security benefits. But people who aren't rich a-holes aren't likely to get behind that.

And speaking of rich a-holes, it'll really be hard to get people to come here and work here if a clueless dope like this (and an equally regressive/dipshit GOP Legislature) is in charge of the state.

Yep, that actually happened: Tim Michels called Wisconsinites lazy. Twice. #WIGov pic.twitter.com/RNt4cnie3e

— Ben Wikler (@benwikler) October 15, 2022

Despite the subpar information in September's household survey, I'd wager that most Wisconsinites think the labor market is still very strong as we approach the November elections. And the many Sconnies with real jobs and real lives shouldn't be taking the economic advice from either of these arrogant, mediocre white men who had their companies given to them by other family members.

2022's inflation might mean lots of relief in 2023

Inflation may be a pain for a lot of people, but in a backdoor way, a lot of Americans are going to get tax relief in 2023 due to the rise in prices in 2022.

Taxpayers will get fatter standard deductions for 2023 and all seven federal income tax bracket levels will be revised upward as the government allows people to shield more of their money from taxation because of persistently high inflation.

For couples who file jointly for tax year 2023, the standard deduction increases to $27,700 up $1,800 from tax year 2022, the IRS announced. Single taxpayers and married people filing separately will see their the standard deduction rise to $13,850, up $900, and for heads of households, the standard deduction will be $20,800, up $1,400.

The adjustments come as inflation accelerated in September, with the Consumer Price Index rising 0.4% last month after just 0.1% in August. Inflation is up 8.2% for the past 12 months.

Some items that were indexed for inflation in the past will remain unchanged, such as the personal exemption, which remains at zero. And the limitation on itemized deductions was eliminated under President Donald Trump.

That's an inflation adjustment on the tax brackets of about 7% at the federal level, and Axios gives a good breakdown of the changes in this article.

So if you don't get a 7% raise next year, at least you'll pay a lower % in income tax. And from what I can tell on state statute, Wisconsin's brackets may be up as much as 8% for 2023.

Older Americans are also going to see a boost in a different type of income due to this year's high inflation.

The 65 million retirees who collect Social Security benefits in the US will get a 8.7% increase, the largest bump since 1981, to offset high inflation https://t.co/ozywduN2MV

— Bloomberg (@business) October 16, 2022

It's also worth mentioning that those same seniors aren't going to pay more than $35 for insulin next year, due to the Dem-supported Inflation Reduction Act. And they are also going to pay lower premiums for Medicare Part B next year, because some medical costs didn't go up as much as prices overall.

Medicare’s Part B standard monthly premium will fall to $164.90 in 2023, a $5.20 decrease from 2022, the Centers for Medicare & Medicaid Services (CMS) announced on Sept. 27. The open enrollment period to make any changes to next year’s Medicare coverage begins on Oct. 15 and goes through Dec. 7.

The premium drop comes in the wake of the big 2022 increase, the largest dollar increase in the history of the program. Part B covers doctor visits, diagnostic tests and other outpatient services. Most Medicare beneficiaries have Part B premiums deducted directly from their monthly Social Security payments.

Next year’s premium decrease makes good on statements this year by Health and Human Services Secretary Xavier Becerra that the money Medicare was saving because spending on Aduhelm, a new Alzheimer’s drug, was not going to be as high as expected would be passed on to beneficiaries in 2023. Spending on other Part B services is also projected to be less than anticipated.

We've already seen overall inflation moderate since June, and now a large number of Americans are going to be taking home more money in 2 1/2 months. This could go a long way toward giving the "soft landing" that the Fed and most Americans are hoping for as rates are raised and prices cool off.

High inventory, flat sales, and lower import prices should further slow inflation. Key word: SHOULD

In the later part of last week, we got several bits of information that indicated that INFLATION PANIC seems overblown.

The first item I want to notice is a follow-up from last week, where I expressed concern over a tightening of gasoline supplies and a higher amount of gasoline usage as September ended. I wanted to see what the reports from the Energy Information Administration said for the first week of October, to see if there was finally a supply-and-demand reason to raise gasoline prices.

Well that concern isn't as strong with me this week, as gasoline availability rose, and gas usage fell significantly, to the lowest post-Labor Day levels in years.

Likewise, prices at the pump have fallen back in many parts of America in the 10 days since that last week of usage was recorded - below $3.60 here in Madison, which makes the short-term spike that was passed out due to refinery outages a few weeks ago all the more BS to me.

We also saw multiple reports last Friday that indicated inflation at numerous types of shopping places should be leveling if not flat-out declining. The first of those reports showed the value of business inventories rising by 0.8%, and up by over 18% in the last 12 months.

And that report came a week after one that showed the value of inventories in retail businesses went up by 1.3% in August.

Then last Friday, retail sales in America continued to show softening of demand in September after a strong first 6 months of 2022. That's not a great thing for the overall economy, but also gives little legitimate reason to jack up prices.

The other report that gave good news on the inflation front on Friday was from the Bureau of Labor Statisitics, which showed the prices of imported goods continued to fall in September. Part of this is a reflection of the absurdly strong dollar, but it also continued a 3-month trend of declines of more than 1 percent, and a marked reversal from the increase in import prices that we saw earlier this year.

If you look at the 3-month trend, we are seeing import prices fall in a way that we haven't seen since the COVID pandemic had much of the world in lockdown.

And while you frequently hear about the 12-month Consumer Price Index increase of more than 8%, it's worth noting that the price of non-fuel imports has only gone up by 3.4% in the last year, and has declined in each of the last 4 months.

The high inventories, strong dollar and softening demand for retail and gasoline all are items that should cause inflation to drop. Which reiterates to me that much of our "inflation" has been profiteering, and that Wall Street fear-mongering over inflation and profitability should be taken with a whole lot of salt. If prices stay high for Q4, it is more likely a cash-in than a pass-through.

$4.3 bil in the bank now, $5.3 bil by next June. Opens door to real changes, if we want.

This news wasn't too much of a surprise on Friday, but I still think it needs to be pointed out.

Attention fellow budget geeks: The final accounting of the '21-22 FY shows Wisconsin had a $4.3 billion surplus as of June 30 as tax collections came in $975 million above what had been expected and expenditures were $376 million less.

See the release:https://t.co/2K7eAdhmp6

— JR Ross (@jrrosswrites) October 14, 2022

How did this happen? About 2/3 was due to the $2.8 billion we already had in the bank. Most of the rest of it was due to much-stronger than expected tax revenues (which were already hundreds of millions of dollars above what was in the 2021-23 budget), and we also spent less state tax dollars than expected (mostly due to the Feds covering a higher % of Medicaid expenses due to COVID emergency measures).

Also interesting is that the surplus would have been even bigger, except a sizable chunk of money is set aside to be used in year 2 of the biennium.

All 3 of the state's main tax revenue sources beat the numbers that were assumed in the original 2021-23 budget, and the already-higher estimates that the Legislative Fiscal Bureau gave in January. This includes individual income taxes nearly matching FY 2021's totals despite significant income tax cuts being put in place, and corporate income taxes continuing their unprecedented increases.

So let's go off of the revenue picture that we have today, and then make the following assumptions.

1. Income tax revenues increase by the same 5% assumed in the 2021-23 budget.

2. Sales tax revenues increase by the same 3.1% assumed in the 2021-23 budget.

3. Corporate taxes shrink back to the $2.585 billion that the LFB assumed in the 2021-23 budget.

If you go with that (and those are very conservative assumptions), and assume all other tax revenues meet budgeted levels, revenues will be $1.334 billion above budgeted levels. We'd also exceed expenses in FY 2023 by almost exactly $1 billion, pushing the balance at the end of the 2021-23 budget to $5.3 billion.

That would open the door to a significant restructuring of taxes in Wisconsin. Either by removing all of the cuts to shared revenues over the last 14 years, and/or removing the property tax as the main method of funding schools and local governments. We also could consistently increase the use of General Funds for roads, highways and transit, instead of relying on gas taxes and registration fees.

What we shouldn't do, is this.

Michels said "inflation is running out of control" and he plans to implement "massive tax reform" by lowering the income tax and eliminating the personal property tax on businesses. https://t.co/Ulh8FALvFH

— Wisconsin State Journal (@WiStateJournal) October 4, 2022

Giving away our surplus to the rich and corporate wouldn't just be regressive garbage that would hurt our state's economy, it would be a gigantic waste of a once-in-a-lifetime opportunity to update the way we fund our services in this state, fixing a system that has long been outdated, constrictive and inequitable.

INFLATION PANIC! But why? The numbers leveled off for Q3

The last two days, I've looked at the Producer and Consumer Price Index reports, and am really confused why I keep seeing articles from Wall Streeters and pundits that sound like this.

Inflation increased 0.4% in September, more than expected despite rate hikes https://t.co/xAn7g8weeT #markets #inflation #cpi

— Karen Tso (@cnbcKaren) October 13, 2022

Back-to-back 75bps hikes on tap? Fed funds futures now pricing in a near-certainty of another hefty 75-basis-points rate hike for the Nov 2 FOMC meeting. Notably, the probability of a repeat performance for the Dec 14 meeting is now ~67%: pic.twitter.com/5mPCGqPfto

— James Picerno (@jpicerno) October 13, 2022

Both indexes rose 0.4% for September, which is around a 5% annual rate. Not great, but not something that would cause great changes in the economy either. And on the producer side, prices went down at some stages of production, continuing a trend of the last 2 months.

On the consumer side, a big cuplrit for the rise was shelter, which takes up about 1/3 of the total CPI index,and a higher proportion of the "core" CPI.

The index for all items less food and energy rose 0.6 percent in September, following an identical increase in August. The shelter index continued to increase, rising 0.7 percent in September, also the same as in August. The rent index rose 0.8 percent in September. The owners’ equivalent rent index also increased 0.8 percent over the month, the largest monthly increase in that index since June 1990.

And that sucks if you're a renter looking for places, no doubt. But the CPI ignores how tens of millions of America with locked-in low-interest mortgafges aren't paying anything extra for their houses these days. Sure, that may be a statement coming from a point of privilege, but let's also acknowledge that these inflationary effects are widely varied depending on what situation you are in.

And while lower-income people are more likely to rent and feel the effects of inflation that way, let's also not forget that eveyrday line workers have been the ones seeing higher wage increases in 2022. And for the third straight month, regular line workers saw their wage increases outpace inflation.

Real average hourly earnings for production and nonsupervisory employees increased 0.1 percent from August to September, seasonally adjusted. This result stems from a 0.4-percent increase in average hourly earnings combined with an increase of 0.3 percent in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Real average weekly earnings increased 0.4 percent over the month due to the change in real average hourly earnings being combined with an increase of 0.3 percent in average weekly hours.

There's more to an economy than the price of gas in my latest cartoon for the @WiStateJournal @JoeBiden #Gas#economyhttps://t.co/dN88LgQUDP

— Phil Hands (@PhilHands) October 11, 2022

I then saw this article from CBS Marketwatch's Rex Nutting that stated what I've been thinking throughout the last couple of months.

Rex Nutting: The best measure shows inflation has now fallen to the Fed’s target https://t.co/nrmwDTnqCL

— MarketWatch (@MarketWatch) October 13, 2022

If we looked just at the year-on-year increase in the CPI, we might agree with the Federal Reserve’s assessment that there hasn’t been an “appreciable decline” in bringing inflation down to the 2% target.

The year-on-year perspective is good for seeing how far we’ve come, but it’s not so good at predicting where inflation is going, because it’s essentially a backward-looking measure. It gives equal weight to inflation in September 2021 and inflation in September 2022. Yet the inflation rate from a year ago has little bearing on what the inflation rate will be going forward....

The monthly data seem awfully noisy. So let’s find the underlying trend by taking a three-month average to smooth out the bumps. In this case, the data say that the CPI rose at a 2% annual rate from July through through September, down from 11% in June and 11.3% in March, which was a 41-year high.

This perspective answers the question: What’s happening with inflation yesterday, today and tomorrow?

If we look at the three-month smoothed annual rate, we might disagree with the Fed about how much progress they’ve made. Going from 11.3% in March when the Fed started raising interest rates to 2% now isn’t nothing. It looks like — dare we say it? — progress.

I'll go along with Nutting's point and add this one. Yes, it's a pain to a lot of us that prices went up as they did starting in Summer 2021 and lasting through June of this year. But why does the Fed care more about that, and not what is happening now in America. And why are they fighting the last war instead of looking at what their recent and future moves will do to everyday Americans in Q4 2022 and all of 2023?

And maybe Wall Street traders also realized that this INFLATION PANIC wasn't being based on the reality in October 2022. Because take a look at the ride the DOW Jones has been on today.

These guys don't know what's going on, probably because none of them have lived through a pro-worker time where inflation might stay at 4-6% for a while (THE HORROR!). And they really don't like that everyday people are finally getting an upper handm which is why they're hoping for GOPs to win in November and smack down workers into compliance with a bad economy and austerity.

Let's not have that happen, shall we?

Who's voting in November? In MU Law School Poll, it's old racist white folks.

My general thoughts about the Marquette Law School Poll?

Shorter @MULawPoll - Johnson leads and Michels tied if voters are a lot of old white guys in the sticks.

If it’s not, Evers leads by 5 and Barnes likely is ahead. So let’s have @UWWCollegeDems and other young/non-white voters turn out, eh?#wiunion #wipolitics #wigov #wisen

— JakeEdwards (@JakeMadtown) October 12, 2022

What angers me is that our media will NOT say that obvious reality, and instead go with the pro-GOP "likely voter" numbers (which ignores respondents who say they are "very likely" or "50-50" to vote). And that's what some low-info voters will use as their cue to decide who they should support, since they want to be associated with winning.

And it's especially infuriating when you see posts like this from former Feingold press secretary Jud Lounsbury.

Also... ummm... the Marquette Poll was only 3% Black. The last midterm election in Wisconsin, it was a 9% Black electorate and their wasn't a Black dude running for Senate.

When. You. Do. A. Poll. Of. White. Conservatives. You. Get. A. Conservative. Result. https://t.co/9vySIheN9X

— Jud Lounsbury (@JudLounsbury) October 12, 2022

Dig into the crosstabs on the Registered Voter sample, and it's a lot more like Real Wisconsin.

Registered Voters, MU Law Poll
Black voters 4.8% of electorate
Hispanic Voters 5.7% of electorate
Voters 18-29
Evers 53-34
Barnes 54-35

Still a bit overly white, but generally in line with what we would expect. So I'm assuming this is the state of play until something different comes along.

Among all registered voters, the results are more favorable to Democrats in both Senate and governor races. Among all registered voters, it’s Evers 46% and Michels 41%. In the Senate race, it’s 47% for Barnes and 47% for Johnson. #mulawpoll

— MULawPoll (@MULawPoll) October 12, 2022

The media coverage would be quite different if those were the poll numbers being discussed today. And I bet Bradley Foundation-funded Chucky Franklin knows it too.

Why do we think more MAGAs will vote in Wis, when COVID killed a lot more of them?

If you've been following the trends in COVID cases and severity since vaccines became widely available in early 2021, this stat doesn't surprise you. But it sure tells a lot.

An important new study of Ohio and Florida death and voting records shows that after COVID vaccines became available, the rate of excess death — that is, deaths above the expected toll relative to the pre-pandemic baseline — was higher for Republicans https://t.co/vnFgw2U3FZ pic.twitter.com/QQz4UYlL3w

— Darrel Rowland (@darreldrowland) October 4, 2022

And the reason why shouldn't surprise you either.

In 2021, a woman pointed to Tucker Carlson’s vaccine misinformation as a reason her dad died of covid.

New research shows Fox viewers were less likely to get vaccinated — especially in a period when Carlson led on talking about the vaccine. https://t.co/gLveF6FzZZ pic.twitter.com/26gPfG63wN

— Philip Bump (@pbump) October 11, 2022

Night after night, they pump out misinformation that kills people.
The grim irony is that they thrive on fear - of immigrants, non-whites, crime, students, "wokeness", science - but Tucker et al are the ones their own viewers should fear the most. https://t.co/TB943yobWg

— Don Moynihan (@donmoyn) October 11, 2022

The same pattern holds in Wisconsin.You may remember that Milwaukee County had well over 200 COVID deaths in the first 2 months of the pandemic, which more than half of the state's total deaths at the time. Since that time, a little more than 2,100 Milwaukee County residents have died due to COVID-19, but nearly 15,000 more Wisconsinites have died (or probably died) due to COVID overall.

And if you look at the overall death rates in the state, you can see it is heavily skewed toward rural areas in northern Wisconsin that have older populations, lower vaccination rates, and high levels of MAGA.

Every one of those 24 counties listed voted for Donald Trump in 2020. And a disproportionate amount of those voters are now gone in 2022.

This reality becomes especially important when you remember that rural, Trumpy parts of the state had a higher part of the 2020 Wisconsin electorate than they have in recent years, and Milwaukee County (and especially the City of Milwaukee) had a lower amount share.

Now you may think a 1% difference in electorate share isn't a big deal, either in the outstate counties gaining or in Milwaukee County declining. But if you assume the same turnout share as 2018 and the same Dem vs GOP results as 2020, here's the change.

When you add 0.5% to the Dems and take away 0.5% from GOPs, that would turn Biden's 20,000 vote margin and take it over 50,000. And it's not unreasonable to think that the COVD death factor alone makes the 2018 electorate the base reality for 2022, if not even more pro-Dem.

But you don't see that modeled in polls, which somehow think this electorate will be even more GOP-leaning than the one that voted in 2020. Maybe this is a bit of hopium speaking, but I don't see anything in the demographics, COVID numbers, or 2022's election results that indicate that. And does anyone think that the WOW Counties are going to vote 2-to-1 for Trump-humpers like Ron Johnson and Tim Michels, like they voted 2-to-1 for Scott Walker in 2018? Me neither.

I'm not saying that the races won't be close in Wisconsin in 4 weeks. But I am saying that incorrectly modeled polls can influence those results (I'm looking at you, Charles Franklin), and I do think the polling is not accounting for the extraordinary times and changing state/country that we are in, with COVID mortality being a central part of that.

Despite OPEC moves and refinery outages, oil keeps pumping in US.But big reports later this week

With gas prices at or above $4 a gallon in Wisconsin these days, I wanted to take another look at this country's supply-and-demand situation for the product, and oil in general.

First off, while there has been (conveniently timed) disruptions with refinery outages in both the Midwest and the West Coast in recent weeks, the amount of oil being produced in America still remains at or above 12 million barrels a day. That's basically what we were doing in early 2019 when prices weren't nearly this high, and well above the 11 million that was being pumped out when President Biden took office in January 2021.

And let's add that the Biden Administration is still releasing oil from the Strategic Petroleum Reserve and delivering it to refiners through the end of next week, so put that 600,000 or so a day on top of what you see in that graph.

On the demand side, I wanted to look at the full weeks after Labor Day in recent years, as that removes the distortions of the holiday and gives us a good reference for what consumption looks like in a normal school/work period. Consumption had trended down for the first two weeks after Labor Day this year, but there was a sizable amount of usage in Week 3, the last week reported so far.

This meant that availability of gasoline dropped to their lowest post-Labor Day levels in 5 years, after being quite a bit more plentiful earlier in September.

It makes Thursday's report on gasoline consumption and availability an important one, because let's see if the increased demand and restrained supply is a one-week blip, or a sign that things have actually gotten tighter, which would give prices a legitimate reason to be higher vs the speculation/greed BS we've had to deal with in a lot of this year.

That being said, it'll also be intriguing to see the reaction when the Consumer Price Index shows another drop in gas prices for September, which likely will lead to another lower overall number. Because it's been interesting to me how the Federal Reserve and speculators have pointed to CPI increases in earlier 2022 as an example of "high inflation" for Q3 (not true), but that they're now avoiding the recent history and looking ahead to OPEC supply cuts and higher future prices as a reason to keep tightening money.

But what's not mentioned is that the gasoline supply picture should loosen up in the next couple of weeks as the refineries come back online now that Q3 profits have been locked in, and that along with the traditional lower driving levels of October should counteract any limits on oil supply that start hitting the system in the coming weeks.