Zoom in if you cannot read it. A spike is not a single month. It’s a spike with an upside and downside. You think the effects of a free few trillion poured into people’s hands only affected an infinitesimal width spike?

So no, I did not interpret this graph incorrectly, and the poster chose a point from an artificial spike to mislead.

Perhaps if you aggregated inflation, which is a lagging variable, it will turn out he chose precisely the quarter that made his point better than any other quarter, in which case he really went the extra mile to provide misleading claims.

If you’re going to attempt to discredit a correct argument, at least evaluate it correctly.

>If you’re going to attempt to discredit a correct argument, at least evaluate it correctly.

Sure, it is part of the downward slope of a multi-quarter spike, but that is not what you said. What you are doing now is attempting to re-frame prior inaccurate wording to claim that you were accurate all along. That first quote is what you said in your first comment. Q4 was the second quarter of decline following the spike. You said the spike was at "precisely the month in question", which it certainly was not. Q4 2020 was half a year after the peak of the spike. That hardly qualifies for even a very generous interpretation of the word "precise".

>Perhaps if you aggregated inflation, which is a lagging variable, it will turn out he chose precisely the quarter that made his point better than any other quarter, in which case he really went the extra mile to provide misleading claims.

Not only is this reaching, but you've just demonstrated that you don't understand what the graph you said was misleading refers to. Real wages does account for aggregate inflation.

That you confuse the word spike to mean only the tip is odd. The downward part of a spike is part of a spike, and the cause and use of this anomaly is not in question. Choosing an outlier high point as a basis to make general claims will always lead to misrepresentations.

Is a railroad spike only the tip? Is a volleyball spike only the highest (or lowest) part? Is a signal spike the zero width instant of maximum value?

I cannot think of a use of the word spike that means the tip and not the entirety. Looking at online dictionaries I cannot find the use you claim. I do find many definitions and examples including both the upside and downside. So I’m quite correct claiming the author choose the spike, and obtains the expected poorly reasoned claims as a result.

> Not only is this reaching, but you've just demonstrated that you don't understand what the graph you said was misleading refers to. Real wages does account for aggregate inflation.

If you dig through my posts, you’ll see I taught mathematical grad econ at a top 50 university. What you misread, then try to use Econ 101, is simply incorrect. As your other comprehension showed, you ignored the precise word “lagging” that I wrote, because real wages at a given date do not include inflation from the future.

Please read and think. You’re so bent on trying to argue you don’t read what I wrote, and instead argue your misreadings.

Let me simplify: it’s well known inflation as a result of cash transfer causes lagging inflation (pretty much all schools of economics agree on this, from Keynesian, neo, Austrians, Friedman, all the flavors of monetarists, pretty much everyone). Hence the precise Econ term lagging variable. Other ones are that wage growth usually lags inflation. This is all basic economics. It’s why I precisely put the word “lagging” in that sentence. It means future inflation above. Most definitely not a part of that spike.

Here, there was an economic shock causing the govt to expand the money supply without expanding production. This money, handed out in large part as cash, adds to real wages at that moment. This will lead to inflation, but that is not part of those real wages. Later, inflation will devalue money, making real wages decrease. Then later again, historically wages gain back purchasing power as people get salary increases. This is done (alert, another term so read carefully) because wages are called a “sticky variable” in Econ. Wages are easy to ratchet up but not down, due to psychology of humans. Wages are hard to move freely like many other variables. Ideally from a math model side, if wages were not sticky, then as the shock passed, prices could fall, and all values return to baseline. But people don’t see that, so it’s easier to ratchet up wages, which ratchets up prices, locking in inflation.

So to maximize the type of nonsense this post spreads, you can always fiddle with the chunks in these troughs to make things look much worse than they are.

So next time please learn the difference between aggregate inflation (current) and the phrase lagging variable. And don’t put claims into my writing so you can argue straw men.

I’m done. You’re trying to correct something that is simply your odd usage of a word.