I mentioned it in Politics, but inflation being "flat" at this point only means it's increasing at a constant pace, not that it's slowed at all.
No it doesn't. It means that prices aren't moving much month to month but are still elevated from a year ago. Also people keep confusing 'inflation' with CPI.
I expect food prices to continue going up (due to war, climate, human stupidity, and the wage floor raising drastically, also fat people) and many other inputs to stay flat or go down. Materials, metals, etc, are all way down from their highs, and oil continues to settle at a reasonable level. House prices will drop, due to raising interest rates, which is good for people still hoarding huge amounts of cash, but I don't see the actual demand for houses going down, this country still has a shortfall of 10-20 million homes.
The thing to understand about the economy we live in right now is that the bottom quartile of workers have seen their hourly incomes raise about 50-60%, and their working hours increased due to labor shortages, therefore having quite a bit more money to spend, so things that those people spend their money on that are supply-constrained are going to remain drastically elevated. Food is definitely the biggest thing here, but also rents, used cars, etc. Someone who went from 12 dollars/hour @ 30 hours a week to 18 dollars/hour @ 45 hours a week is going to have a lot more economic wants. Those wants are going to drive more production but as long as things are supply-constrained vs elevated demand, they will continue to support high prices.
If there's more economic pain to come in 2023, which is certainly very possible and even likely, it'll be because the employment situation changes, as that's the last shoe left to drop at this point, but that would dampen demand and prices. That said, I don't predict a labor surplus any time soon.
