Inflation! It's always sneaking up on us:

U.S. consumer-price gains accelerated in October for the third-straight month largely due to rising energy costs, the latest sign inflation pressures in the economy are firming....The “report provided further confirmation of strong energy base effects boosting headline CPI,” said Barclays economist Blerina Uruçi. “Although core inflation rose less than expected, we still believe that domestic price pressures remain strong.

Hold on to your britches. Here's what the various measures of inflation look like through October:

Yes, you read that chart right. Headline CPI (the blue line) soared all the way to...1.6 percent. But of course, the Fed supposedly doesn't care about that anyway. They care about core inflation (the red line). Core CPI is slightly above 2 percent, but has been flat all year. No acceleration there. But wait. The Fed doesn't care about core CPI either. They rely on the PCE inflation index, which is...hovering around 1 percent (the green line). Data for October isn't even available yet. And data for core PCE isn't available either.

But what about future inflation? Well, the 10-year breakeven skyrocketed from 1.51 percent in September to 1.67 percent in October. In other words, expected inflation bumped upward slightly, but is still well below 2 percent and has been trending downward for the past two years:

And yet, inflation is always right around the corner. Here's the very last paragraph of the Journal article:

Separately Thursday, data showed workers’ earnings were flat in October from September, when adjusting for inflation. Stronger inflation offset the increase hourly wages, and the average workweek was unchanged.

Yeah, inflationary pressure is really a big threat. The labor market is so tight that wages were completely flat. Sigh.

Four years ago, Rick Perry said in a debate that he wanted to eliminate three agencies of government. Sadly for the Texas governor, he could only remember two. Oops:

The missing third agency that Perry wanted to eliminate was the Department of Energy. Now he's being considered to lead that agency. Who says irony is dead?

As Republicans go about their plans to repeal and replace Obamacare, attention is now turning to the second half of that mantra: what will they replace it with? Oddly, this is not something that Republicans have come to a consensus on even though they've had seven years to do it. It's almost as if they never had any intention of replacing it in the first place.

But that's just me being cynical. There may not be any consensus, but there are Republican plans out there. Andrew Sprung rounds up a few of them and concludes that one particular piece of Obamacare shouldn't cause any real trouble:

One change that need not be too disruptive, I suspect — if done right — is replacing the individual mandate with continuous coverage protection — that is, protection from medical underwriting for anyone who maintains continuous coverage.

"If done right" is doing a lot of work in that sentence, isn't it? But that's just me being cynical again. So let's get serious. Is Sprung right?

Yes he is. The details get a little complicated—click the link if you want to dive into them—but the "individual mandate" is nothing more than an incentive: buy insurance or else you'll pay a tax penalty. Likewise, "continuous coverage" is an incentive too: buy insurance or else you're going to be screwed when you get sick and no one will sell you a health care policy. Both are ways to motivate young, healthy people to buy coverage and help subsidize all the old, sick people like me. Honestly, the biggest difference between them is semantic: "mandate" just sounds a whole lot more coercive than "continuous coverage."

So sure, there are more ways to skin the incentive cat than a tax penalty. But I think we're putting the cart before the horse here. We really ought to be talking about something else: the pre-existing conditions ban. Unlike the individual mandate, which affects the federal budget and can therefore be repealed by a simple majority, a repeal of the pre-existing conditions ban can be filibustered. That means repeal requires 60 votes, and that means Republicans can't repeal it. But if it's not repealed, Republicans can't do much of anything else. As long as the ban is in place, any Republican plan is almost certain to cause total chaos in the health care market.1 It would be political suicide.

So if Republicans want to do something that's not political suicide, they need Democratic votes. And that means Democrats have tremendous leverage over the final plan. They can either negotiate for something much better than what Republicans are proposing, or they can simply withhold their votes and leave Republicans between a rock and a hard place: either abandon Obamacare repeal, which would enrage their base, or pass a plan that would cause chaos for the health care industry and for millions of registered voters. This is not leverage to be given up lightly.

1If you don't understand why, shame on you! My blogging has been in vain. However, Jon Gruber explains it here. Also, check out conservative Michael Cannon at National Review. He gets it too. The pre-existing conditions ban is the key roadblock in the way of Republicans repealing Obamacare.

Killing the TPP was easy—though I suspect it will make a comeback after Donald Trump renegotiates a few bits and pieces and then loudly announces that he's made it into the greatest trade deal in the history of the republic. But what about NAFTA? What exactly does Trump want to do? Zeeshan Aleem writes that a transition team memo makes it clear that NAFTA is at the top of Trump's to-do list:

Suppose Trump wants to keep the US in the pact but put his self-professed negotiating skills to work in crafting what he insists would be a better version of the deal....There are a number of ways to pursue that end goal, but Trump’s rhetoric suggests he wants to do it by raising tariffs on imports from Mexico. That’s something he’d have difficulty getting Mexico to agree to, so he’d have more latitude to do it if he were to actually withdraw from NAFTA. But withdrawal is a tricky business, given how deeply the countries’ economies rely on each other.

....It would require loads of American businesses bringing existing components of their supply chains and outsourced services back onshore to avoid tariffs or other penalties — a process that takes time and money. It would also potentially increase costs for those businesses going forward.

If that’s [not] enough, the move could set off a trade war by prompting Mexico to raise tariffs on American goods in response. That could cause a downturn in the US economy and a spike in the unemployment employment rate that would undermine the very reason Trump is considering withdrawing from NAFTA.

....The upshot? Trump’s departure from the decades-long bipartisan consensus was politically brilliant....But following through on his promise is going to be difficult. The murky future of NAFTA may be one of the first places where Trump disappoints his followers; it won’t be the last.

Well, we'll see. Trump almost has to do something, considering how central NAFTA was to his campaign. But in the real world, there's not much upside. The OECD estimates that NAFTA had essentially no effect on employment, and the International Trade Commission estimates that it had essentially no effect on wages. So withdrawing wouldn't do any good for all those working-class folks Trump appealed to, but it would cause plenty of upheaval for businesses that are tightly integrated with their Mexican supply chains.1

Of course, NAFTA's impact hasn't been the same everywhere. There are a few industries where employment has been negatively affected. So Trump could focus on those and boast about how he's bringing jobs back to America. Prices of Mexican imports would go up too, but that's a pretty diffuse effect and most people probably wouldn't notice it.

So...who knows? As with many other things, I suspect that Trump will get agreement on a few smallish things and then take to his Twitter account to declare that he's just done more for the American worker than any president ever. At least, I'm kind of hoping that's what he does. The alternative is almost certainly worse.

1Needless to say, there are lots of estimates of the impact of NAFTA, and some of them suggest large employment effects—like this one from EPI. The general consensus, however, seems to be that it's had a pretty small impact.

After Barack Obama was elected president in 2008, gun shops did a land office business selling firearms to folks who were convinced that Obama was going to take their guns away. Now the shoe is on the other foot:

Since Donald Trump became president-elect, many women in California say they’ve started looking into long-acting, reversible birth control methods, in case access to contraception or abortions is rolled back. Trump has not said he wants to restrict birth control, but he has spoken often of repealing Obamacare, which could have that effect.

Collins said 45 people were ahead of her in line when she called the clinic. “So I was not the only person with that idea,” she said.

Doctors and Planned Parenthood offices across the state report that in the last week an increased number of women have asked about IUDs. The devices are inserted once and some types could even outlast a two-term Trump presidency. Google Trends shows more searches for “IUD” on Nov. 10 than in the previous 90 days.

I suppose there's no harm in this. Long-acting birth control is generally a good idea, and IUDs are an excellent choice for many women. Still, don't be like the gun nuts. It's possible that Trump could take executive action that rolls back birth control to the dark ages of 2013, but that's about it. And he hasn't given any indication that he even wants to do that.

Still, IUDs are great! And there's a chance that a year from now you might have to pay more for them. Might as well get one now, I suppose. Especially if you work for Hobby Lobby.

I suppose this is about 157th on the list of things to worry about from a Trump presidency, but I still have to wonder: Are we going to continue giving Trump's tweets the same banner treatment that we gave to the Hindenburg disaster? Shouldn't the press have a little more self-respect than that? If the guy won't talk to them, and instead relies on tweets that sound like they were written by a fourth grader ("The failing @nytimes story is so totally wrong on transition. It is going so smoothly. Also, I have spoken to many foreign leaders.")—well, maybe they should be given no more than the attention they deserve. Which is to say, about the amount that the press gave to Barack Obama's tweets. Which is to say, none.

UPDATE: Here's an idea. Instead of going crazy over every Trump tweet, maybe the Washington Post should inaugurate a regular feature: Today's Presidential Tweets. Every day, on page A14, they could have a box that reprints all of Trump's tweets for the previous day, along with a fact check for each of them. Something like this:

Pretty good idea, huh?

Donald Trump—or someone speaking for him, anyway—says that he plans to label China a currency manipulator on "day one" of his presidency. Fair enough. China does intervene in currency markets to manipulate the value of the yuan. Unfortunately, Trump might not like what would happen if China decides to call his bluff:

The simple act of calling out China for manipulating the value of its currency to gain an export advantage shouldn’t roil Beijing to the point of retaliation, said Derek Scissors, a China economy expert at the American Enterprise Institute....But slapping retaliatory tariffs on Chinese goods would be more difficult because it would require congressional approval — a problem given that Republican leaders have been opposed to legislation to punish Chinese currency devaluation with duties, Scissors said.

There’s also the question of whether China is actually devaluing its currency. Most economists agree Beijing intervenes heavily in its currency markets, but in recent years has actually been propping up the value of the renminbi rather than lowering it.

Hmmm. Here is Brad Setser:

The monthly data suggest China has not bought foreign exchange in the market to keep the yuan from appreciating in the past 6 quarters or so, only sold. Its intervention in the market has worked to prevent exchange rate moves that would have the effect of widening China’s current account surplus over time. Every indicator of intervention that I track is telling the same story.

....If China stopped all management (“e.g. manipulation”) and let the yuan float against the dollar, China’s currency would drop. Possibly precipitously. China’s export machine would get a new boost. And rising exports would take pressure off China’s governments to make the difficult reforms needed to create a stronger domestic consumer base.

In other words, right now China's currency is overvalued. If they weren't manipulating it, it would most likely have fallen even more than it has—something along the lines of the chart on the right. This would mean Chinese imports get even cheaper, American exports get more expensive, and the trade deficit increases. This is exactly the opposite of what Trump wants.

Demonizing foreigners as the cause of all our problems is apparently a good campaign tactic. Dealing with the real world is a little different. Hopefully Trump will talk to a few actual economists and trade experts before he makes good on this particular promise.

Andrew Prokop provides us with a brief timeline of the Trump transition team's bumbling effort on Tuesday. It's not going so well.

The filibuster is suddenly the Democratic Party's new best friend. But it can't be used on everything:

The Congressional Review Act....allows Congress to repeal any regulations — that were issued within the final 60 legislative days of the previous session — by a simple majority vote....Next year, Republicans will have 45 legislative days to repeal the 180 regulations that took effect between May 17 and last week. The party is highly unlikely to tackle all of those. But Republican lawmakers do have their sights set on an EPA rule that limits greenhouse-gas emissions from commercial trucks and buses, and on a Labor Department rule that gave millions of new workers eligibility for overtime pay, according to USA Today.

It's worth noting that there are lots of ways to slow things down in the Senate that don't depend on the filibuster. Mitch McConnell was pretty good at using them, and I imagine Chuck Schumer is too. This is why Republicans have to pick and choose their battles. Every bill, every confirmation, every motion takes up floor time. The more Schumer slows things down, the fewer things the Senate can do. There are lots of people who are under the impression that President Trump can demolish American society in his first hundred days, and they're going to be disappointed to find out that's not true. They're going to have to prioritize.

Via Nancy LeTourneau, I came across a Bloomberg article reporting that wage growth is on fire: "The median U.S. worker saw pay rise by 3.9 percent year-over-year in October, the fastest rate of growth since November 2008." This was based on the Atlanta Fed's Wage Growth Tracker, which was new to me. It's an interesting measure because it compares actual individuals 12 months apart to see how fast their wages are growing. The chart on the right shows the cheery news.

That got me curious about how this compares to other, more conventional measures. My favorite is hourly wages of production and nonsupervisory employees, which gives a good sense of how working-class and middle class folks are doing. I was also curious about what these numbers would look like after adjusting for inflation, since raw wage growth figures don't really tell you anything. Here's the answer:

Real wages did rise at a pretty good clip during 2014 and early 2015, but the growth rate tapered off after that. There hasn't been the nonstop upward growth that the raw Bloomberg chart shows. What's more, in 2014 the two series began to diverge. Overall wages have risen at a rate of 2-3 percent over the past year, but blue-collar wages have grown at only 1-2 percent. That's not too bad, but it still means that working-class folks aren't seeing as much improvement as everyone else. That might be pertinent to our recent election results.