uddrag fra Knowledge Leaders Capital blog,
Much of the inflation has already happened. The question now is when will it peak out? If we compare the 1-year percent change in real disposable income to CPI, we find that CPI lags changes in disposable Income by about 15 months, or 5 quarters. The good news (for inflation) is that disposable income stopped accelerating in March of 2021. The bad news is that this implies inflation will remain stubbornly hot through the first half of next year.
Of course, leads and lags between economic variables are unstable, so it’s quite possible that inflation could peak out before the second quarter of next year. The supply shock that is underway adds complexity and supports the “inflation for longer” story. Nevertheless, the 15 month lag between changes in disposable income and inflation may prove accurate. If we examine the last time the country dealt with an inflation spiral due in part to supply shortages (the 1965-1982 period) we do observe a fairly consistent lag of 15 months.
The only problem was that each cyclical peak in inflation also coincided with a recession.
