Good morning. 
Wednesday in Whitewater will be cloudy with a high of 51. Sunrise is 6:50 AM and sunset 4:29 PM for 9h 38m 38s of daytime. The moon is a waxing gibbous with 96.9% of its visible disk illuminated.
Whitewater’s Parks and Recreation Board meets at 5:30 PM.
On this day in 1869 in Egypt, the Suez Canal, linking the Mediterranean Sea with the Red Sea, is inaugurated.
Wendy Edelberg writes What does current inflation tell us about the future?:
What signal should we be taking from current inflation for future inflation? The answer: some signal, but not a lot. To be sure, inflation is running high (figure 1); and, after excluding the typically volatile categories of food and energy prices, is running higher than it has been in decades. But because the factors that are leading to inflation are pandemic-related and therefore temporary, the current trend does not forecast the future.
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the primary contributor to the recent spike in inflation is core goods. The strength in real consumer spending (shown in figure 4a) has reflected a surge in spending on consumer goods (shown in figure 4b). Real goods spending is currently about 15 percent higher than it was pre-pandemic, and there were a couple of months when it was 20 percent higher.
Are the trends described above a signal that we should expect continued extraordinary inflation for core goods—everything from automobiles to exercise mats—in the coming years? Three factors suggest no.
- First, the surge in spending on goods has put upward pressure on prices as suppliers have been unable to keep up with demand. Suppliers have strong incentives to iron out issues with the supply chain to get more product onto shelves; in addition, the problems with the supply chain that owe more directly to the pandemic will ebb as the pandemic is brought under control globally.
- Second, that surge in goods spending is no doubt temporary because households—as the pandemic recedes—will rebalance consumer spending toward services, which has been unusually depressed (figure 4c).
- Third, the fiscal support to households that has helped to finance the surge in goods spending has largely waned.
In contrast to spending on consumer goods, spending on services remains below its pre-pandemic peak. This pattern is a significant departure from previous business cycles where services were relatively unaffected.
There’s no suggestion, of course, that inflation is a benefit; it’s simply that inflation will not become a persistent detriment.
Fennec fox brothers Ollie and Artie make themselves at home at the Milwaukee County Zoo: