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.

Bloomberg:

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.

The…

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