The Capital Letter — Inflation, Infrastructure, Innovation, China & More

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The Week of August 9, 2021: Inflation, infrastructure, innovation, and more

Regular readers will know that optimism is not one of my defining characteristics, but in a note on Wednesday, I did note that July’s CPI number might offer some grounds for hope, if only for the short term:

There is a limited amount that can be drawn from one month’s numbers, but these latest data provide some grounds for optimism that the pandemic effect on inflation may slowly be passing (for a relatively upbeat view on the prospects, take a look at this analysis by Matthew Klein), but that’s still far from a given.

And then came Thursday and the PPI numbers.


Prices paid to U.S. producers rose in July by more than expected, suggesting that higher commodity costs and supply bottlenecks are still adding to inflationary pressures for companies.


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