18 ms·

I'm not an economist. I am a consumer, though. And I'm older, so I have 'habits' that don't tend to change. My rent has gone up 30%. What used to cost me 100

• smnrchrds 5y ago
  20% over a year or a decade? If it is the former, what has the average annual inflation been over the past, let's say 30 years, in your opinion?
  • silisili 5y ago
    Year. I think inflation was pretty steady up until about 2019. Then it went insane. If I had to pick an average, 3 or 4% until aforementioned year.
    • nappy 5y ago
      You live in a different part of the country than almost anyone else. The goods you buy, even in your area, can vary significantly. If you're trying to buy a gallon of milk, things aren't so different. A car, yeah that's gotten pricey. But your anecdotal experience is no reason to doubt the statistics on what is happening broadly.
      • deleted 5y ago
        [deleted]
  • mjevans 5y ago
    It used to be a slow creep you noticed, but kind of grumbled at... In the last 2 years it's _noticeable_ and painful.
• omgitsabird 5y ago
  You would think that there could be alternative geographical price indices created with help from companies that aggregate this data regularly (grocery apps, travel apps, etc).
  • silisili 5y ago
    What I think is that it's completely a lie to misinform American consumers to not freak out. A 1lb ribeye steak in 2017 was about 11 dollars. Today it's 17 dollars, in bulk. If you want to look at 'cheap' things, just look at the printed price of Santitas chips.
    • nappy 5y ago
      ribeye is not the cut that most people are buying. In a supply chain challenged environment with rising wages, premium cuts of beef are seeing price increases, but this is not evidence of outsized inflation. Also, if you want delicious beef, there are lots of other options both in cuts and preparations.
      • silisili 5y ago
        I do understand this point, but am trying to be honest as a consumer. My family has only ever really liked ribeyes. If they've doubled in price, that affects us. That say, stew meat or london broil didn't doesn't affect our bottom line.
        • nappy 5y ago
          You've stated the point well: there are substitute beef products that haven't seen the same price increases. This is not the same as me general inflation, or nearly as concerning.
        • nappy 5y ago
          The level of luxury people get acclimated to is pretty amazing. I'm trying to imagine the response I'd have received if as a child I had demanded ribeye regularly, or what my grandparents would have said if they heard it discussed in such a manner today, as a product deserved at a cheap price (I gather your family can still afford it.)
• seanhunter 5y ago
  CPI is a measure that's calculated by using the price of a standardized basket of things. It's indicative of inflation overall, but every person's personal inflation rate is different because it's affected by the exact mix of goods and services they buy, which aren't going to be the same as the basket. If your family are experiencing inflation higher than 20%, it's because you're consuming more of things which inflate faster than the basket.
  • omgitsabird 5y ago
    https://www.investopedia.com/articles/07/consumerpriceindex.asp https://www.investopedia.com/articles/07/consumerpriceindex....
  • angelzen 5y ago
    Basket of things with a vastly oversized share of cheap plastic crap made in East Asian sweatshops and or unrealistic substitutes. If 95% of Americans see a "personal inflation rate" significantly larger what the government claims, perhaps the government methodology is not particularly informative? This is the point where the burden on proof lays with those that claim the government methodology is relevant: What is the "basket of things" composition and how many Americans have a spending profile anywhere near that?
    • seanhunter 5y ago
      This is a valid criticism of the methodology and if you look at a sibling of your comment, someone has posted a great resource that discusses some of this in depth. There are a lot of critics of CPI who feel it is manipulated by the BLS either intentionally or unintentionally. The methodology was also changed from being a "Cost of Goods Index" (literally the basket I described above) to a "Cost of Living Index" (which is intended to reflect the cost of maintaining a constant standard of living over time allowing substitutions in the basket but still suffering from the problem I describe above where your personal standard of living derives from the goods and services that you consume and therefore will differ from the index composition), and there are entrenched proponents of both the COGI and COLI methodologies. I'm not an economist, but one fundamental problem with any consumer index (as far as I can see) is that as you become richer in absolute terms the marginal utility of any additional dollar goes down (eg your life doesn't change that much if you upgrade your already expensive phone but it changes a heck of a lot if you can't afford to buy enough food) and therefore poorer people experience far more harm from inflation than richer people. Not sure any index ever captures that effect adequately.
• smt88 5y ago
  Your personal CPI can go up disproportionately to the country at large. Anyone living in a city center will experience this as cities gentrify.
  • silisili 5y ago
    Understood. But do you know any single person that will say 'my groceries only went up by a few cents'? I do not, hence my problem with the reporting.
    • Godel_unicode 5y ago
      I would say that, for one. Recurring orders and receipt scanning make these kinds of comparisons pretty easy for me.
    • krastanov 5y ago
      For what is worth, my personal anecdote is different: my rent went slightly down (renewed in August, in Boston) and my grocery bill has not moved in a noticeable way (middle class vegetarian with Mediterranean tastes).
    • zuminator 5y ago
      Also keep in mind that groceries, or rather food in general, only comprise in the neighborhood of 10% of the average household budget. So if we're just talking about food, if you're paying 50% more, that is just a 5% increase in your overall expenses. And as far as your rent going up by 30%, that's offset by some people whose rent actually went down by a lot during the early pandemic when people were fleeing the cities and bargains were to be had. And some people who don't pay rent at all, but pay fixed-rate mortgages which will go up by zero percent over the life of the loan. So you can see how that could significantly nerf the total inflation affecting that household.
    • anchpop 5y ago
      I live in lansing and I’ve not noticed groceries getting more expensive in the past few years
    • 5y ago
• nwmcsween 5y ago
  100% this but the macroeconomics of it are simple, by pushing low interest housing and food goes up astronomically so the economy ends up with the backbone of the labor force (>$20/hr) being priced out of everything. The only fast solution here is subsidizing living which many governments are doing but it won't fix the problem they created in the first place and now they have to deal with either dramatically raising rates and saddling the people with horrendous debt due to bond yields and defaulting, etc or riding it out and lying about real inflation with small raises.
  • creato 5y ago
    I agree low interest rates inflate housing prices, but I don't think that has much to do with food prices. I think food prices are being inflated simply by more people having more money to spend (pandemic unemployment/stimulus, higher wages for some).
    • jnosCo 5y ago
      You think people are buying more food?
      • dnautics 5y ago
        No, food providers can extract higher prices for food.
        • Thorrez 5y ago
          This makes me wonder about competition. Theoretically if there's competition, one food provider could offer food for the old price, or halfway in between and attract all the consumers and make extra money from the additional business.
    • causi 5y ago
      Food availability is also suffering. I haven't been able to find wings at a Zaxby's in months. Many places have switched to lower quality ingredients, like Wendy's switching their buns and chicken breasts.
• ashtonkem 5y ago
  I guess I’d be the outlier in your friend group. I haven’t noticed a significant change in our regular grocery bills. Optional purchases by and far dominate, and the biggest factor for our grocery bill is whether or not we bought alcohol, not the change in meat prices. Aside from rent, the only things I’ve noticed significant price changes in have been items undergoing acute supply shocks, such as lumber. And most of those have calmed down since mid last year.
  • emodendroket 5y ago
    I'd agree with your assessment.
• lettergram 5y ago
  The government changes their reporting mechanism all the time. If you use the 90s standards it is closer to 10% (15% using the 80s standard). http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts This is occasionally mentioned in the news: https://www.cnbc.com/id/42551209 https://www.cnbc.com/id/42551209
  • silisili 5y ago
    I'd love to learn more about this, if you have sources. Because this sounds like exactly what's happening.
    • vekerdyb 5y ago
      How to Own the World by Andrew Craig explains this in the inflation chapter.
  • SpicyLemonZest 5y ago
    This chart isn't remotely plausible. No legitimate difference in reporting mechanisms or standards would exactly match every upswing and downswing - if you're weighing the basket differently, you'll get spikes at different times. They have to be just making up a constant value and adding it to the official statistics. (You'll note that the reporter in the linked article didn't ask anyone other than the people who made the graph whether it made sense.)
  • clavicat 5y ago
    The criticism I’ve read of ShadowStats is that they don’t actually recompute inflation using different methodology—they just add a constant of their own choosing to all the official inflation figures.
  • amcoastal 5y ago
    What's it like falling for literally fake news? If those charts don't set off your bullshit detector... Well... You should probably stop trusting yourself on many things.
  • 5y ago
• gpapilion 5y ago
  Doesn’t the most often used form cpi exclude food and housing? I’ve always disliked this, but shocks to those markets keep them excluded.
  • nuerow 5y ago
    > Doesn’t the most often used form cpi exclude food and housing? No, it doesn't. In the US, the US Bureau of Labor Statistics explicitly includes food and rent in it's CPI. https://www.bls.gov/cpi/overview.htm https://www.bls.gov/cpi/overview.htm
  • JamesBarney 5y ago
    It includes food and housing/shelter. But it's important to distinguish between a house and housing. A house is a capital good that provides housing/shelter. So if the prices of houses got really expensive but rent stayed the same that wouldn't show up as inflation.
• argonaut 5y ago
  If you think inflation was 20% over the past year, that's equivalent to saying someone's salary going from $100k to $119k in a year has resulted in them being poorer. That just doesn't pass the common sense test, IMO.
  • jurassic 5y ago
    You'd actually need to make more like 125k to maintain a 100k standard of living through a 20% inflation event since you're taxed on the "extra" income.
  • imtringued 5y ago
    There is an obvious problem with fixed salary work contracts since the death of unions and bargaining power but come on. Everyone knows you're supposed to switch jobs to get more money by now. It's what the employers implicitly have agreed upon.
• skzv 5y ago
  The Fed massages the inflation rate by throwing out "extreme" deviations. > Mr. Powell used a gauge from the Dallas Fed that throws out the top 31% and bottom 24% of personal consumption expenditure (PCE) price changes, and was bang on the Fed’s 2% year-over-year target in July, the latest available. An alternative measure from the Cleveland Fed strips out the top and bottom 16% of consumer-price index changes, and was far higher; worse, the monthly rate was unchanged in August from July, giving no support to the idea that inflation is already coming back down. [0] [0] WSJ: https://archive.md/A7SIh#selection-4683.0-4706.0 https://archive.md/A7SIh#selection-4683.0-4706.0
  • nuerow 5y ago
    > The Fed massages the inflation rate by throwing out "extreme" deviations. The rationale is valid though. Price-conscious consumers would simply switch brands, stores, or even go for substitute goods if the price of a particular product they chose happened to skyrocket for no reason while the price of all other alternatives barely changed.
    • angelzen 5y ago
      It's not valid though. Inflation driven substitution means lower quality. You used to barbecue steaks every weekend. Now you can only afford bologna. You used to wear leather shoes. Now you can only afford plastic crocs. Etc, etc, etc.
      • nuerow 5y ago
        > It's not valid though. Inflation driven substitution means lower quality. It really is valid. Not only is it valid, it's precisely the whole point of tracking a consumer price index. The goal of CPI is to track the prices of goods and services consumed by the population, not brand- or product-loyalty. When prices go significantly up, it's a known fact that consumers react by seeking affordable alternatives, or in the case of luxury items simply going without.
        • desmosxxx 5y ago
• wodenokoto 5y ago
  What makes inflation tricky, both in terms of calculating easily but also in terms of being easily fudged are substitutional products. Inflation is measured by the price of a representative basket of products. And what’s reasonable to put in that basket today, might not be reasonable tomorrow. If beef explode in price, people aren’t going to buy steaks, so maybe it makes more sense to change the index away from steaks to pork chops. It’s both a cop-out and the only reasonable thing to do. The national isn’t poorer just because caviar went from almost free to extremely priced over a century.
  • asah 5y ago
    https://www.cbo.gov/publication/44088 https://www.cbo.gov/publication/44088 Apparently, this exists and it's called CPI-U but alas it still apparently understates inflation.
  • joelbluminator 5y ago
    What about things that don't really have a replacement like housing, medical insurance, child care costs etc?
    • angelzen 5y ago
      Oh, but there is. Move in with roommates in a bad part of the town. See the dentist only to pull out excruciatingly painful rotten teeth. Leave small kids home alone, perhaps pull their older sibling from school to babysit for free.
      • deleted 5y ago
        [deleted]
    • thow-58d4e8b 5y ago
      At least for the European Central Bank, housing is the single largest item in the inflation basket - entered as something called "imputed rent" - how much would it cost to rent an equivalent dwelling. This item alone accounts for 7.5% of the overall index. Adding housing maintenance, heating, water supply, etc. - the entire housing category climbs up to 17.8%. Which sounds like a totally reasonable estimate to me - young people and urbanites pay more, older folks and people in rural or provincial towns pay much less. From my personal experience - housing and related expenses were ~50% of my income while paying down mortgage, down to ~7% after the loan was repaid
• nuerow 5y ago
  > For someone like my family, I wouldn't believe any number less than 20%. For that to be true, on average the price of every single item in your groceries list has to increase over 20%. Can you provide a single example of an item in your groceries list whose price increased over 20% during 2021? And which item increased in price the most?
  • Blammar 5y ago
    I'm not claiming I agree, but for me (a) gasoline went from $4 a gallon to $5 today (b) ground beef went from about $6 to $8 a pound last market trip. I wouldn't be surprised if supply chain issues (e.g., with trucking companies) are partly responsible for the price rises.
    • ApolloFortyNine 5y ago
      Yikes, is this the US? Just a reminder that things like this are incredibly regional based. I still pay $1.79/lb for chicken breast and 3.50 for 80/20 ground beef in Richmond Virginia. And gas goes up and down for a variety of reasons.
      • dclowd9901 5y ago
        Speaking of region, $5 a gallon of gas is _still_ incredibly cheap next to our euro brethren.
    • IAmGraydon 5y ago
      Where do you live that gas is $5/gal and ground beef is $8/pound? The national average price of gas is $3.40/gal and ground beef is $4.50/pound.
      • desmosxxx 5y ago
        gas was 5.05 in the bay area today. not sure what the price of ground beef is but my steaks i buy went from $20 to $25 over the last year and they're worse quality
• MattGaiser 5y ago
  At least in Canada, renters get hit hard, but homeowners are actually bringing CPI down with lower mortgage rates.
• 8bitsrule 5y ago
  > So what is the government reporting? BLS: Sep 2020- Sep 2021, all items : up 5.4% [https://www.bls.gov/news.release/cpi.t01.htm https://www.bls.gov/news.release/cpi.t01.htm] On that chart, fossil fuels are much higher up. Looks like 2022 social agency dispersals will be up about nearly 6%.
• IAmGraydon 5y ago
  Your rent has gone up 30% in a year? Most places in the US have laws which limit yearly rent increases to the low single digits.
  • mikewarot 5y ago
    >Most places in the US have laws which limit yearly rent increases to the low single digits. Even if that were true, how does that knowledge help? Legal fights of that nature take resources and time, which most people don't have.
    • bawolff 5y ago
      Most other countries have tennancy boards and things so you can enforce your rights without expensive lawsuits. Does usa not have that?
      • blitzar 5y ago
        Having lived in multiple (mostly first world countries) I have never experienced this outside of the state free / subsidised housing sector.
        • bawolff 5y ago
          Maybe its not as common as i thought. Here's an example in canada https://en.wikipedia.org/wiki/Tribunal_administratif_du_logement https://en.wikipedia.org/wiki/Tribunal_administratif_du_loge... . Several, but not all provinces in Canada have similar administrative tribunals instead of the normal court system to resolve resedential rental disputes.
        • dbetteridge 5y ago
          https://www.commerce.wa.gov.au/consumer-protection/housing-and-accommodation https://www.commerce.wa.gov.au/consumer-protection/housing-a... Department of Commerce/Consumer protection in Australia. They'll give basic advice and you can attend a Magistrates court for more difficult issues for a nominal fee.
• dgellow 5y ago
  30% since 2019?
• megablast 5y ago
  When did your rent go up, and when did your goods cost $100.
• Geee 5y ago
  Customer price index is based on average consumer behavior. The tricky thing is that consumer behavior changes when prices rise. For example, when the price of meat rises, consumers start substituting it with cheaper alternatives. If the old basket was $50 and the new one is $50, then there's no inflation. Saifedean Ammous writes about this in his new book, the Fiat Standard. The chapter about fiat food is available online. [0] [0] https://saifedean.com/fiatfood/ https://saifedean.com/fiatfood/
• justinlloyd 5y ago
  I have been tracking my household expenses religiously for years. Down to how much we spend on milk each year, or how many boxes of breakfast cereal we go through. And without changing habits (I worked from home previously) or spending any differently for most of 2020 I saw a slight upward tick that was more than I would expect for previous years, about a 10% increase across the board in terms of energy, health care costs, food costs. In 2021 that upward tick turned in to way more than just a tick. Food habits haven't changed, nor have quantities. I shop at a mixture of Food4Less, Ralphas, Gelsons and a few small items at Whole Foods, but food expenditure has increased by 30% to 40% since start of 2020. Household energy usage has remained the same, but somehow the price is 20%+ higher than at the start of 2020. Monthly health insurance costs have increased by 17.1% A gallon of milk or a carton of eggs is about where it has been for the past three or four years, because a gallon of milk or a carton of eggs doesn't go up by 3 cents each month, it jumps by a dollar once every three years. Low-end commodities like that tend to stay artificially deflated for a while. I am expecting milk, eggs, and other basics to jump by a dollar or two in the very near future. I am just a single data point, but something seems "off" with all officially reported statistics. Something isn't being captured somewhere.
  • TeMPOraL 5y ago
    Thanks for posting. I'm completely unsurprised. Do you also happen to have data from before the pandemic? What was the trend then? I'm surprised by seeing everyone in the whole thread and the article talking about the last two years. The way I see it, both shrinkflation and "skimpflation" were already blindingly obvious way before pandemic, and looking at the stats from the last two years makes reasoning difficult because of, well, a global pandemic.
    • justinlloyd 5y ago
      I have data for household budget going as far back as 1999. Though not everything can be inferred from that data simply because of lifestyle changes, e.g. getting married, moving to different cities, education, and changing dietary habits (cutting sugar, cutting salt, eating out less, consciously choosing less processed foods). But 2013 to 2019 was a stable period with few lifestyle changes and the trend was around 6% per year for my "basket of household items" with the occasional bumps of "milk just went up by a dollar at the local Food4Less lower tier grocery store." The largest inflationary food items I've seen have been meat and poultry. The largest non-food inflationary items I've seen are gasoline and health insurance. Car insurance I cannot track due to a minor "at fault" accident adjusting insurance rates in 2018. Storage locker increases by around 4% per year. Household insurance increases by around 5% per year. My life is only a single, but extensively tracked, data point. But "something seems screwy in the state of Denmark" to paraphrase Shakespeare. P.S. I'm not in Denmark.
• ls-lah_33 5y ago
  > I'm older, so I have 'habits' that don't tend to change. > So what is the government reporting? In addition to CPI, the government also reports CPI-E for elderly consumers. It is generally higher than the more widely used standard CPI (all urban residents). https://www.bls.gov/opub/ted/2012/ted_20120302.htm https://www.bls.gov/opub/ted/2012/ted_20120302.htm
• flexie 5y ago
  I don't experience much inflation. In fact, I don't see any in my budget. I know everyone says prices are getting higher, but we've actually tracked our expenses the last 2-3 years, noting down every little expense in a spreadsheet, and I don't see any signs that prices are rising. Our supermarket expenses are the same as before, even slightly smaller. Our rent is the same although our landlord legally could have raised it if he wanted to. All in all, we spend less money than before because: - we don't commute, - we barely eat out, - we buy less clothes when staying home, - we travel a little less. The last big purchase we made was a flat screen TV. It costed less than the 10 year old TV it replaced but is so much better. Electricity and heat have gone up. That's all I see in our budget that has gotten more expensive. There are purchases we haven't made because they are stupid expensive at the moment: We don't buy shares, we are postponing buying a house, and we have been postponing changing our car. I would have liked to buy a new laptop, but the specs of the new ones look like the 4 year old I have, so it feels wrong. Could it be that we just have higher prices on some items and assets and that the CPI and mainstream economists are generally correct?
  • jtc331 5y ago
    “We’ve intentionally avoided purchasing things because they’ve gotten too expensive” sounds like the perfect way to prove exactly the opposite of your point.
  • matsemann 5y ago
    You spending less money on stuff has nothing to do with inflation, though. And your point becomes kinda moot when you intentionally skimp out on things you feel have become too expensive..?
  • hcurtiss 5y ago
    I cannot imagine what you buy that your groceries have not increased in price in the last eighteen months. We too track every expense, and the grocery costs have increased 20-30%.
    • brailsafe 5y ago
      It's plausible, but not on a medium to large scale. Of all my consumption expenses, certainly coffee has gone up per cup, but everything else is roughly the same. Oats, deli meat, fruit, pasta, that's about it. Canned beans have gone up a little, maybe butter too.
• jdavis703 5y ago
  My rent, as did most rents in my area went down. I expect next year will be a modest increase, certainly less than other increases in the recent past. While goods are clearly more expensive, it doesn’t feel anywhere close to 20% more.
• krageon 5y ago
  > So what is the government reporting? They report things that make them look better. Generally that makes inflation look lower than it is. For what it's worth, I'm fairly young but I have similar issues to yours. If you mostly buy essentials, the costs have been rising very fast, much faster than salaries do for the same functions.
• api 5y ago
  The CPI has been questionable for a very long time, especially since the price of real estate went insane in the 2000s.
  • throw0101a 5y ago
    > especially since the price of real estate went insane in the 2000s. And the monthly cost of mortgages went down over the 2000s: * https://awealthofcommonsense.com/2021/03/what-if-housing-prices-arent-as-high-as-they-appear/ https://awealthofcommonsense.com/2021/03/what-if-housing-pri...
  • nradov 5y ago
    The price of real estate isn't included in the CPI, nor should it be. Purchasing real estate is an investment, not a consumer expenditure. The CPI does include rent and owner's imputed rent.
    • api 5y ago
      > Purchasing real estate is an investment, not a consumer expenditure. Yeah I remember when I was living under a bridge and then decided to invest in Real Estate. Renters have a greatly impaired ability to build wealth. If everyone has to rent except "investors" then there is no more middle class. In a market that is majority renters landlords can raise rent until it consumes virtually all surplus: https://en.wikipedia.org/wiki/Law_of_rent https://en.wikipedia.org/wiki/Law_of_rent The CPI is correct as the CPI is defined, but that's circular. I can index inflation to the number of nose hairs in the President's nose if I want. The question is whether it's a meaningful statistic for driving a policy that benefits anyone except the government or the financial industry. The CPI should include the cost per square foot of residential real estate. It should also be weighted heavily toward necessities like food, energy, education, and health care, which perhaps coincidentally are hard to outsource and therefore are more directly influenced by domestic inflation.
      • nradov 5y ago
        Nonsense. That's like claiming the CPI should include the price of gold bars or mutual fund shares. You completely missed the point of the CPI. It has nothing to do with building wealth. CPI is heavily weighted toward necessities like food, energy, education, and health care. You would know that if you bothered to read the documentation. https://www.bls.gov/cpi/methods-overview.htm https://www.bls.gov/cpi/methods-overview.htm
• yobbo 5y ago
  The effective purpose of CPI is to be the rationale for credit and monetary expansion. Without that, the housing and stock markets would be left to drift freely. The exact mechanisms behind something like CPI are probably secret to prevent manipulation by outsiders, but I also suspect it's difficult to even confirm that.
  • nradov 5y ago
    Nonsense. The BLS is completely transparent about the exact mechanisms behind the CPI. https://www.bls.gov/cpi/methods-overview.htm https://www.bls.gov/cpi/methods-overview.htm
    • missedthecue 5y ago
      They're transparent about the mechanisms in general, but plenty of the mechanisms are arbitrary by nature. The article discusses hedonic adjustment for instance. That isn't a scientific or mathematical change. That's people at the fed making personal judgement calls about how good the iphone 12 is vs the iphone 11, and adjusting the price increases on the basis of that personal judgement call. If you open the link you shared, you can see they make hedonic adjustments for men's suits, the first item in the list. Are suits today really much higher quality than they were 10 years ago, necessitating a decrease in the actual price inflation of a man's suit? The fed thinks so, but they don't share the details of why or how much hedonic adjustment men's suits deserve.
      • nradov 5y ago
        You're over simplifying it. The hedonic adjustments involve very little personal judgment. https://www.bls.gov/cpi/quality-adjustment/questions-and-answers.htm https://www.bls.gov/cpi/quality-adjustment/questions-and-ans...
    • yobbo 5y ago
      The published numbers are opaque. There is no way of confirming what mechanisms are used since the data is secret. See the paragraphs on data confidentiality.
• belter 5y ago
  Same experience from friends all over the world. From fuel to core essentials its running at 20 to 25%. If we talk US current official status is: ---------------------------------- "In July 2021, the Consumer Price Index increased 0.5% from June to July, slower than the 0.9% month-over-month increase from May. When compared to the year prior, the full index increased 5.4%, making it the largest 12-month increase since 2008." ---------------------------------- "Consumer Price Index (CPI)" https://www.investopedia.com/terms/c/consumerpriceindex.asp https://www.investopedia.com/terms/c/consumerpriceindex.asp CPI stat from the U.S. Bureau of Labor Statistics: https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category.htm https://www.bls.gov/charts/consumer-price-index/consumer-pri... "Consumer Price Index Frequently Asked Questions" https://www.bls.gov/cpi/questions-and-answers.htm https://www.bls.gov/cpi/questions-and-answers.htm "How is the CPI calculated?" "The CPI is a product of a series of interrelated samples. First, using data from the U.S. Census we select the urban areas from which data on prices are collected. Next, another sample (of about 14,500 families each year) serves as the basis for a Telephone Point-of-Purchase Survey (TPOPS) that identifies the places where households purchase various types of goods and services, forming the basis for the CPI outlet sample. Using data from the Consumer Expenditure Survey, BLS statisticians assign quotes in the CPI item categories to specific outlets. A specific item is then chosen for selection using a process which bases the probability of selection for an item on the share the item composes within the outlet’s revenue in that item category." "Recorded price changes are weighted by the importance of the item in the spending patterns of the appropriate population group. The combination of carefully selected geographic areas, retail establishments, commodities and services, and associated weight, gives a weighted measurement of price change for all items in all outlets, in all areas priced for the CPI." There is also the PCE running at almost 5%: https://www.bea.gov/data/personal-consumption-expenditures-price-index https://www.bea.gov/data/personal-consumption-expenditures-p... "Personal Consumption Expenditures Price Index" "CPI vs. PCE Inflation: Choosing a Standard Measure" https://www.stlouisfed.org/publications/regional-economist/july-2013/cpi-vs-pce-inflation--choosing-a-standard-measure https://www.stlouisfed.org/publications/regional-economist/j... "Two different price indexes are popular for measuring inflation: the consumer price index (CPI) from the Bureau of Labor Statistics and the personal consumption expenditures price index (PCE) from the Bureau of Economic Analysis. Each of these is constructed for different groups of goods and services, most notably a headline (or overall) measure and a core (which excludes food and energy prices) measure. Which one gives us the actual rate of inflation that consumers face?"
• sleepysysadmin 5y ago
  CPI(~5%) is a go-to measurement because it attempts to avoid geo-politics. However, has a blind spot for the very fundamentals of inflation. PPI(~10%) is a late stage measurement that doesn't avoid geopolitics. However, because of government policies it's said to have become useless. Yet still considered better than cpi. Oil as a measure. When geopolitics are screwing with it, everyone knows. It's under immense abuse right now. Yet it's recent low because of covid was ~$20/barrel and it's up to ~$83. Or if you account for covid, it's up ~30%. M2 money supply? It's got 40% inflation locked in, but that wont show up in a single year. Call me crazy but PPI seems on the money. Geopolitics seems to be the biggest player in the game right now.
• thehappypm 5y ago
  The HN crowd in general is upper-middle-class and therefore not really all that price sensitive. If name-brand cereal X doubles in price, HN buys it, logs it in a spreadsheet, then notes that the price went up. Middle-class Joe will look at the price, call BS, and go with an alternative that didn't arbitrarily raise their prices. I think what's going on here is a lot of profiteering because there's an easy way to raise prices without looking like a villain. More so than ever before, companies, suppliers, and stores can raise their prices arbitrarily, and easily blame the pandemic and "supply chain issues" without a huge amount of consumer blowback, especially from the upper classes.
  • missedthecue 5y ago
    Hmm. If this were true, we'd see margins expanding in the industry vs prior years, but that isn't reflected in the data. https://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=505 https://csimarket.com/Industry/industry_Profitability_Ratios...
    • thehappypm 5y ago
      I think the manufacturers probably have the least leeway; it'd be very easy for shippers or even the grocery stores themselves to just jack up prices where they see fit. Combine that with large grocery stores getting more data-driven it's kind of a no brainer for them to pick items they know they can increase the price of without blowback
  • silisili 5y ago
    You know, reading all of the replies, some in stark agreement, some essentially calling me ridiculous (no offense taken), I think you've hit the nail on the head. I've been in the camp of price insensitive - to a degree - I buy things I'm used to and watch prices go up and up and up. Someone who is more savvy and perhaps open minded doesn't see such increases. So we both think each other are crazy when talking about expenditures. That actually helps me understand both sides - so thanks for putting it plainly. It's interesting to me to go back and reread all the replies with that mindset. Seems there is much disagreement as to which more accurately represents expenditures.
• HWR_14 5y ago
  > So what is the government reporting? The government tries to guess which prices ratchet only up (e.g. new cars) and which prices rise and fall (e.g. gasoline). They then report the inflation rate on the ratcheting goods only, because that should be more predictive of what's going to happen in the future.
• LdSGSgvupDV 5y ago
  I'm not an economist also, but I wonder does this have something to do withQE? US almost double the QE in 2020.