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Stripe's Internal Inflation Indicator: A New and Improved CPI?

February 22, 2025 / 01:08

This episode discusses inflationary data, economic indicators, and the reliability of non-farm payrolls and GDP. Guests include Stripe executives who share insights on the online economy.

The conversation highlights the challenges of interpreting economic data, particularly in the context of Stripe's focus on online and innovative companies. The guests express concern about the backward revisions in economic indicators and their impact on market transactions.

They acknowledge that Stripe's growth may not fully represent the broader economy, especially during periods like COVID-19 when online and offline sectors behaved differently. The guests emphasize the importance of sharing reliable economic data for public benefit.

TLDR

Stripe executives discuss inflation data and economic indicators' reliability.

Episode

1:08
00:00:00
we did look at inflationary data over the last couple years and I think you can construct and the team did construct
00:00:06
a pretty reliable kind of leading indicator for inflation one of the big things that we've talked about is how
00:00:12
many backward revisions there are to everything from non-farm payrolls to GDP that they've become so unreliable and so
00:00:19
it's very difficult for people that are transacting in Market to know what to do
00:00:24
have you guys ever thought about that because I'm sure that you have a much more accurate sense of where the economy
00:00:28
is than many other people we have and I feel a bit ruthful you know with you asking the question because I feel like
00:00:33
on some level we should have done it stripe is not like a full cross-section of the economy you know we're more
00:00:36
biased towards online we're more biased towards Innovative companies there can be these stories where I mean during Co
00:00:41
the online economy was doing great H the offline economy was sort of a different
00:00:44
story so the interpretation can be a bit tricky but then just the second thing is
00:00:46
the strip business is growing so quickly and changing so fast that again you know
00:00:50
it's not necessarily representative of of the economy and even if stripe is way up year-over year you know you you have
00:00:56
to be a bit hant in drawing conclusions from that having said that I think in principle you could draw some
00:01:00
conclusions and so we would like to share that openly because you know I think it's I think it's a public good
00:01:04
for there to be better and more reliable economic data

Episode Highlights

  • The Challenge of Economic Data
    Understanding inflationary data is complicated by unreliable revisions and varying economic sectors.
    “It's very difficult for people to know what to do.”
    @ 00m 19s
    February 22, 2025
  • Stripe's Unique Perspective
    Stripe's growth doesn't fully represent the economy, highlighting the need for caution in interpretations.
    “You have to be a bit hesitant in drawing conclusions.”
    @ 00m 54s
    February 22, 2025

Episode Quotes

  • It's very difficult for people to know what to do.
    Stripe's Internal Inflation Indicator: A New and Improved CPI?
  • I feel a bit rueful you know with you asking the question.
    Stripe's Internal Inflation Indicator: A New and Improved CPI?
  • You have to be a bit hesitant in drawing conclusions.
    Stripe's Internal Inflation Indicator: A New and Improved CPI?

Key Moments

  • Economic Data Challenges00:19
  • Stripe's Growth00:46
  • Caution in Conclusions00:54