Inflation may have eased, but a ‘number of factors’ will make it ‘tick back up’ this year: Former WH economist

Former Council of Economic Advisers acting Chairman Tyler Goodspeed joined ‘Mornings with Maria,’ Thursday, to react to the release of the December CPI, predicting that inflation will lower in the first half of 2023, but will ultimately increase in the latter half as energy prices rise.

INFLATION EASES IN DECEMBER TO 6.5%, BUT PRICES REMAIN STUBBORNLY HIGH

TYLER GOODSPEED: … I think it’s good news that the headline number is down, but I think a lot of these declines are somewhat concentrated in energy in particular, and energy has been a big source of disinflation over the past couple of months, and I think we have to ask, do we expect that to persist as we proceed through 2023? 

… there are a number of factors, forces that are really going to be pushing energy price inflation back up, particularly in the latter half of 2023. The world’s second-biggest economy and a big energy guzzler, China, is going to be reopening. I think that’s going to start to put upward pressure on energy price inflation, and also the fact that in 2022 we didn’t have a big energy price shock in the latter half of the year because Europe was able to fill up their stores of energy after the invasion, Russian invasion of Ukraine. 

US inflation  (istock / iStock)

… I think that we could have continued easing of inflationary pressure in the first half of 2023. That then flips again to slightly rising inflation in the latter half of the year. 

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