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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 inf

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.
  - jolux 5y ago
    That harm does not capture the reduction in debt caused by inflation though. Inflation benefits debtors over creditors, even if it also effectively lowers wages.
    - seanhunter 5y ago
      That's true although if you're spending all of your income on debt service and basic living costs, then reducing the real value of the nominal of your debt doesn't in fact increase your standard of living at all. Theoretically you're better off, but all of your income still goes on debt service and basic living costs. The basic living costs have gone up in nominal terms while the debt service is still the same. It's depreciated in real value but the nominal is still the same.
      - dannyw 5y ago
        On a statistical basis, the poor holds more debt. From that basis, inflation is good. A lot of people don't realise inflation is essentially a stealth cash wealth tax. It applies to savings, debt, dollar-denominated contracts, etc.
        webreac 5y ago
        Inflation is good only for long term debt.
        kzrdude 5y ago
        Inflation is "progressive" in this sense, however everyone wealthy would hold mostly assets, not cash.
        imtringued 5y ago
        They still hold a decent amount of cash as a percentage of their portfolio. 10% of a million dollar portfolio is still $100k which is more than the average joe has. He would use that money to buy a house instead of letting it sit around. Yes, bigger down payments suck but that is mostly a zoning/housing supply issue.
- dcposch 5y ago
  The Economist publishes a fun and simple metric called the Big Mac Index. They present it as a way of looking at forex rates. If 1 USD buys you 1 swiss franc, but a Big Mac costs $5 here and 7 CHF there, then maybe the franc is overvalued. In any case you lose McDonald's purchasing power by converting. But you could just as easily use it for inflation. Big Macs are a stable product. A Big Mac sold in 1985 is very similar to one sold yesterday. Also, it includes a good mix of basic inputs. Land rents, transport costs, labor, and food ingredients. Here's the raw data. https://raw.githubusercontent.com/TheEconomist/big-mac-data/master/source-data/big-mac-source-data.csv https://raw.githubusercontent.com/TheEconomist/big-mac-data/... In the US, a Big Mac cost $2.54 in 2001 and $5.65 in 2021. That works out to 4.0% annual inflation. https://www.google.com/search?q=(5.65%2F2.54)%5E(1%2F20)&oq=(5.65%2F2.54)%5E(1%2F20) https://www.google.com/search?q=(5.65%2F2.54)%5E(1%2F20)&oq=... The official numbers were 2% that entire time. Those come from a complex calculation using an always-shifting basket.
  - Galaxeblaffer 5y ago
    The Big Mac index is pretty stupid though, since the ingredients in various countries are different and not sourced from the same place. Here en Europe McD tries to be somewhat middle class while I'm the us it's absolute trash.
    - herbst 5y ago
      Was going to say that. They have a green logo and regularly claim some of their products are hyper local now here in CH. I doubt they have to do this in many other countries. Other than that price differences in food between $ and CHF are likely mostly explained because work hours simply cost a lot more around here.
      - ehnto 5y ago
        > I doubt they have to do this in many other countries. Not sure why you would think that. McDonalds is famous for catering it's menu and service to it's locale. In Australia they were required to serve real chicken in their nuggets, and they're always advertising that they use locally sourced beef for their burgers. They also rebranded in a sense to upmarket themselves, and started selling salads, cakes and coffees in order to sneak a foot into the Australian cafe scene.
- throw0101a 5y ago
  > What is the "basket of things" composition and how many Americans have a spending profile anywhere near that? Well: > 2. How is the CPI market basket determined? > The CPI market basket is developed from detailed expenditure information provided by families and individuals on what they actually bought. There is a time lag between the expenditure survey and its use in the CPI. For example, CPI data in 2020 and 2021 was based on data collected from the Consumer Expenditure Surveys for 2017 and 2018. In each of those years, about 24,000 consumers from around the country provided information each quarter on their spending habits in the interview survey. To collect information on frequently purchased items, such as food and personal care products, another 12,000 consumers in each of these years kept diaries listing everything they bought during a 2-week period. > Over the 2 year period, then, expenditure information came from approximately 24,000 weekly diaries and 48,000 quarterly interviews used to determine the importance, or weight, of the item categories in the CPI index structure. * https://www.bls.gov/cpi/questions-and-answers.htm#Question_2 https://www.bls.gov/cpi/questions-and-answers.htm#Question_2 The BLS' CPI isn't written on some set of secret scrolls. If you're curious about how it is configured just look it up.
- op00to 5y ago
  You could … you know Google it yourself. https://www.bls.gov/cpi/methods-overview.htm https://www.bls.gov/cpi/methods-overview.htm Ever consider you are special? If you’re posting on this site, chances are you are more educated, richer, and better employed than most of your compatriots in whatever country you’re in. Of course luxury goods inflate faster. We can afford it.
- ChrisLomont 5y ago
  >Basket of things with a vastly oversized share of cheap plastic crap made The "basket of things" is made from the ratios of things consumers buy. BLS explains the methodology and lists the basket, and how it evolves as people buy less horse carriages and more cars, less giant radios and more iPhones, and so on. Making a basket that better represents inflation would be worth a lot of money, and a lot of groups try, but none really do any better than the BLS. For example, the Billion Prices Project out of MIT tracks a vastly larger number of things, but ends up with the same inflation rates http://www.thebillionpricesproject.com/ http://www.thebillionpricesproject.com/
- long_time_gone 5y ago
  > What is the "basket of things" composition and how many Americans have a spending profile anywhere near that? The BLS isn’t hiding this information, it’s publicly available. The burden of proof would be on you to provide research on why that methodology is incorrect. https://www.bls.gov/news.release/cpi.nr0.htm https://www.bls.gov/news.release/cpi.nr0.htm > The CPIs are based on prices of food, clothing, shelter, fuels, transportation, doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living. Prices are collected each month in 75 urban areas across the country from about 6,000 housing units and approximately 22,000 retail establishments (department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments). All taxes directly associated with the purchase and use of items are included in the index. Prices of fuels and a few other items are obtained every month in all 75 locations. Prices of most other commodities and services are collected every month in the three largest geographic areas and every other month in other areas. Prices of most goods and services are obtained by personal visits or telephone calls by the Bureau’s trained representatives.
  - caeril 5y ago
    > why that methodology is incorrect A lot of people take issue with hedonic adjustments, substitution threshold, etc - but the specific methdology used is far less important than the fact that they're simply lying about the data. For one example, the obvious elephant in the room is the shelter category. In the last year, rents are up 12%[1], and home prices have soared nearly 20%[2] Yet, from your own source, the BLS is claiming 3.2% for the shelter category. It's not so much that the methodology is wrong (although that argument could be made as well), but that they're flat out lying. And then you have to contend with the Gell-Mann amnesia effect: if they're lying to your face about the shelter category, what makes you think the data in any of the other categories, for which you have less third party data to corroborate, are not also completely fabricated? [1] https://www.apartmentlist.com/research/national-rent-data https://www.apartmentlist.com/research/national-rent-data [2] https://fred.stlouisfed.org/series/CSUSHPISA https://fred.stlouisfed.org/series/CSUSHPISA
    - AlexandrB 5y ago
vxNsr 5y ago
This is the same administration that claimed we saved $0.49 on a 4th of July BBQ this year, bec they cut out all the meat compared to the BBQ last year. I’m sorry but you can explain all you want. I’m not buying it (at any price)
- Dylan16807 5y ago
  Where? I'm searching that number and I can't find anything. I found this, which is comparing the same quantities and has five pounds of meat. https://twitter.com/WhiteHouse/status/1410709115333234691 https://twitter.com/WhiteHouse/status/1410709115333234691 There's a bunch of complaints about other prices, and people pointing out the prices are up 8% since 2019, but I don't see anything about "cutting out all the meat" and I don't see the number 49 anywhere. And the ground beef had the second biggest percent drop in price in that list, anyway.
  - notafraudster 5y ago
    The Tweet you noted is the official tweet on this. The parent quote is relying on existing "rebuttals" of that post by conservatives, which have eventually become broken telephone to the degree that the parent comment believes Joe Biden banned meat to falsely reduce the cost of July 4th. It's funny because the actual quote is stupid enough -- trying to emphasize some marginal rounding error national savings on 5 pounds of meat when the entire world has been exploded for the last two years is a baffling claim and an obvious attempt to put lipstick on the whole situation, these guys are absolute clowns, and the April-onwards hubris of "COVID's over, we saved the day!!!" is just a national embarrassment. The specific "ban meat" bugbear has been a very active talking point among conservatives. You see, the Green New Deal (which is predicted in the book of Revelation) involves Andrea McDonald-Cortisol personally banning you from eating meat. The ground truth at the heart of it is that the Green New Deal, which is as much an expression of intent as it is an actual policy document, correctly notes that cattle raised for beef contribute to greenhouse gasses (both through methane production, CO2 production, and clear-cutting of valuable carbon sinks to produce grazeland). This is of course indisputably true. The document doesn't actually prescribe any restrictions on meat so much as it acknowledges that the size of meat's contribution to our climate economics makes it unlikely we'll hit long term targets without rethinking our relationship with meat. Compound that with the fact that some liberals, including Barack Hussein Obama's awful wife!!!!, did initiatives like a "meatless monday", and you have all the proof you need that liberals are banning your meat. It is less clear to me who is the first particular commentator to combine the "Biden is going to ban meat (and guns, and god, and everything else you hold dear, which is not a surprise because he stole the election, and he's senile)" argument and the "Biden claimed the 4th of July will be cheaper which is false because we have Zimbabwe level inflation" argument. A few random sources of very concerned RW commentators talking about liberals taking away your meat, all before the present controversy: https://www.washingtonpost.com/nation/2019/03/01/latest-right-wing-attack-democrats-they-want-take-away-your-hamburgers/ https://www.washingtonpost.com/nation/2019/03/01/latest-righ... https://www.washingtonpost.com/nation/2021/04/26/republicans-meat-biden-climate-plan/ https://www.washingtonpost.com/nation/2021/04/26/republicans... https://edition.cnn.com/2021/04/26/politics/fact-check-biden-climate-plan-red-meat-hamburger/index.html https://edition.cnn.com/2021/04/26/politics/fact-check-biden...
makeitdouble 5y ago
An interesting point raised in the NPR piece is that sometimes your basket stays the same at the same price, but the content is actually inferior in subtle and not so subtle ways. My personal observation on the snacks I buy: they are the same volume and taste mostly the same, but the ingredients shifted over time, in particular relating to flavor (e.g. less sugar and more "sugary stuff") BTW In parallel they introduced "rich" versions that are more "luxury", clearly distinct from the standard product, and contain better ingredients overall. I'd expect a number of people to have switched to the pricer version, even if they were really seeking the "old" standard version.
- quickthrower2 5y ago
  I think they try to account for this in a hedonic index - https://en.wikipedia.org/wiki/Hedonic_index https://en.wikipedia.org/wiki/Hedonic_index
  - makomk 5y ago
    Pretty sure that only accounts for easy-to-measure headline specifications - for example, it takes into account that people are buying 55" TVs when a few years ago they might've bought 32" TVs, but ignores the fact that you need to buy a 55" TV to get similar sound and picture quality to a 32" TV from a few years ago due to quality reductions in smaller sets. Also, I strongly suspect any methodology using measurements of how much extra people were willing to pay when both were available overestimates the value of the improvements to all the other people who switched to the "better" product when the cheaper one was discontinued, since most of them didn't consider paying the extra to be worth it. For example, if someone needs a flash drive to transfer small documents around buys a 32GB one when they would've bought a 8GB one a few years ago because that's now the option that's cheap to manufacture and readily available, they don't get the same benefit that someone who paid extra for the 32GB model over the 8GB a few years ago did.
    - nradov 5y ago
      Your facts are wrong. At the same price point, the 32" TVs available today have better picture and sound quality than those from a few years ago. Check the archived manufacturer specifications and independent reviews.
kybernetyk 5y ago
In Germany that basket regularly changes contents to keep the official inflation at a politically opportune level. People here still believe that inflation is around 3% - yet the prices have exploded.
- emn13 5y ago
  This sure sounds like conspiratorial thinking - unless you have any evidence thereof. A quick bit of googling found this: https://www.destatis.de/DE/Themen/Wirtschaft/Preise/Verbraucherpreisindex/Methoden/Downloads/waegungsschema-2015.html https://www.destatis.de/DE/Themen/Wirtschaft/Preise/Verbrauc... which sure seems to suggest the basket was last changed in 2015 (i.e. this isn't something being fiddled by anybody, let alone on a political whim - it's too slow moving for that). And the actual inflation currently using that system is 4.1-14.3% depending on which of the three baskets you're looking at. Also, consider that inflation numbers are necessarily lagging reality; they're not updated live by tracking residents or anything like that. For example, september's numbers are available and quoted above, but October's are not (and are projected to be higher). This kind of conspiratorial thinking is harmful; it reduces trust, and thereby encourages everybody to skimp on the rules making everybody worse off. It's a classic prisoner's dilemma - we're better off just not playing that game. I'm sure the process of inflation-computation is imperfect, but let's talk about concrete, verifiable problems or better yet suggestions for improvements instead of nebulous feelings of disagreement. By the looks of it, the official statistics confirm that inflation is spiking, but simply not yet to dramatic numbers (i.e. the kind of numbers that instantly change how we all think about money). If you feel that inflation is significantly higher, then why?
- imtringued 5y ago
  The official numbers are around 4.5% to 5% and everyone knows it's a combination of higher energy prices, more taxes (VAT rebate is gone, CO2 tax is up), shortage of materials and reopening of the economy.
vmception 5y ago
Maybe we should start using all that data we are collecting from people’s recurring spending and post time series data points. If people are ordering the same groceries then we should be able to make our own regional data plots. We dont need the government for this. They need us to support them. And right now thats just this decade long debate about CPI and inflation, which is now accelerating due to the currency supply shock over the last year as people are converted into paying attention to this discussion.
yosito 5y ago
> calculated by using the price of a standardized basket of things Doesn't this sort of assume that the needs and wants of society stay consistent over time? I wonder if that is a valid assumption with how fast the world changes these days. For example, smartphones were hardly necessary 10 years ago, but now everyone needs one. And modes of transportation have changed: now we have Uber and a large number of electric cars, which wasn't the case 10 years ago. How could an index that includes things like the price of gas be an accurate measure, if society's needs are constantly in flux?
- gruez 5y ago
  >How could an index that includes things like the price of gas be an accurate measure, if society's needs are constantly in flux? The basket can and does get adjusted.
- HWR_14 5y ago
  Please note, the price of gas affects the price of Uber rides/
nathias 5y ago
It's so weird anyone would accept this as a measure if the standardized basket changes with time.
- sokoloff 5y ago
  It would be weird to accept it if the basket didn’t change over time. I don’t care what a farrier charges to reshoe a horse or what a block of icebox ice costs, but I might have only 100 years ago. Surely we’d need a way to include entertainment and lifestyle changes as they happen. 1973 CPI didn’t include any costs for personal computers, Internet service, mobile phones, etc.
  - nathias 5y ago
    A meter that would be of different length every time you would measure something would not be useful for measuring. I'm not sure that it would be made better by including your changing lifestyle and entertainment preferences as they happen.
throw0101a 5y ago
> It's indicative of inflation overall, but every person's personal inflation rate is different […] For Canadians, StatCan has a "personal inflation" calculator where you can enter your own bills for their own basket of goods and services and get a personal number: * https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020015-eng.htm https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020015...

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.
- jolux 5y ago
  That harm does not capture the reduction in debt caused by inflation though. Inflation benefits debtors over creditors, even if it also effectively lowers wages.
  - seanhunter 5y ago
    That's true although if you're spending all of your income on debt service and basic living costs, then reducing the real value of the nominal of your debt doesn't in fact increase your standard of living at all. Theoretically you're better off, but all of your income still goes on debt service and basic living costs. The basic living costs have gone up in nominal terms while the debt service is still the same. It's depreciated in real value but the nominal is still the same.
    - dannyw 5y ago
      On a statistical basis, the poor holds more debt. From that basis, inflation is good. A lot of people don't realise inflation is essentially a stealth cash wealth tax. It applies to savings, debt, dollar-denominated contracts, etc.
      - webreac 5y ago
        Inflation is good only for long term debt.
      - kzrdude 5y ago
        Inflation is "progressive" in this sense, however everyone wealthy would hold mostly assets, not cash.
        imtringued 5y ago
        They still hold a decent amount of cash as a percentage of their portfolio. 10% of a million dollar portfolio is still $100k which is more than the average joe has. He would use that money to buy a house instead of letting it sit around. Yes, bigger down payments suck but that is mostly a zoning/housing supply issue.
dcposch 5y ago
The Economist publishes a fun and simple metric called the Big Mac Index. They present it as a way of looking at forex rates. If 1 USD buys you 1 swiss franc, but a Big Mac costs $5 here and 7 CHF there, then maybe the franc is overvalued. In any case you lose McDonald's purchasing power by converting. But you could just as easily use it for inflation. Big Macs are a stable product. A Big Mac sold in 1985 is very similar to one sold yesterday. Also, it includes a good mix of basic inputs. Land rents, transport costs, labor, and food ingredients. Here's the raw data. https://raw.githubusercontent.com/TheEconomist/big-mac-data/master/source-data/big-mac-source-data.csv https://raw.githubusercontent.com/TheEconomist/big-mac-data/... In the US, a Big Mac cost $2.54 in 2001 and $5.65 in 2021. That works out to 4.0% annual inflation. https://www.google.com/search?q=(5.65%2F2.54)%5E(1%2F20)&oq=(5.65%2F2.54)%5E(1%2F20) https://www.google.com/search?q=(5.65%2F2.54)%5E(1%2F20)&oq=... The official numbers were 2% that entire time. Those come from a complex calculation using an always-shifting basket.
- Galaxeblaffer 5y ago
  The Big Mac index is pretty stupid though, since the ingredients in various countries are different and not sourced from the same place. Here en Europe McD tries to be somewhat middle class while I'm the us it's absolute trash.
  - herbst 5y ago
    Was going to say that. They have a green logo and regularly claim some of their products are hyper local now here in CH. I doubt they have to do this in many other countries. Other than that price differences in food between $ and CHF are likely mostly explained because work hours simply cost a lot more around here.
    - ehnto 5y ago
      > I doubt they have to do this in many other countries. Not sure why you would think that. McDonalds is famous for catering it's menu and service to it's locale. In Australia they were required to serve real chicken in their nuggets, and they're always advertising that they use locally sourced beef for their burgers. They also rebranded in a sense to upmarket themselves, and started selling salads, cakes and coffees in order to sneak a foot into the Australian cafe scene.
throw0101a 5y ago
> What is the "basket of things" composition and how many Americans have a spending profile anywhere near that? Well: > 2. How is the CPI market basket determined? > The CPI market basket is developed from detailed expenditure information provided by families and individuals on what they actually bought. There is a time lag between the expenditure survey and its use in the CPI. For example, CPI data in 2020 and 2021 was based on data collected from the Consumer Expenditure Surveys for 2017 and 2018. In each of those years, about 24,000 consumers from around the country provided information each quarter on their spending habits in the interview survey. To collect information on frequently purchased items, such as food and personal care products, another 12,000 consumers in each of these years kept diaries listing everything they bought during a 2-week period. > Over the 2 year period, then, expenditure information came from approximately 24,000 weekly diaries and 48,000 quarterly interviews used to determine the importance, or weight, of the item categories in the CPI index structure. * https://www.bls.gov/cpi/questions-and-answers.htm#Question_2 https://www.bls.gov/cpi/questions-and-answers.htm#Question_2 The BLS' CPI isn't written on some set of secret scrolls. If you're curious about how it is configured just look it up.
op00to 5y ago
You could … you know Google it yourself. https://www.bls.gov/cpi/methods-overview.htm https://www.bls.gov/cpi/methods-overview.htm Ever consider you are special? If you’re posting on this site, chances are you are more educated, richer, and better employed than most of your compatriots in whatever country you’re in. Of course luxury goods inflate faster. We can afford it.
ChrisLomont 5y ago
>Basket of things with a vastly oversized share of cheap plastic crap made The "basket of things" is made from the ratios of things consumers buy. BLS explains the methodology and lists the basket, and how it evolves as people buy less horse carriages and more cars, less giant radios and more iPhones, and so on. Making a basket that better represents inflation would be worth a lot of money, and a lot of groups try, but none really do any better than the BLS. For example, the Billion Prices Project out of MIT tracks a vastly larger number of things, but ends up with the same inflation rates http://www.thebillionpricesproject.com/ http://www.thebillionpricesproject.com/
long_time_gone 5y ago
> What is the "basket of things" composition and how many Americans have a spending profile anywhere near that? The BLS isn’t hiding this information, it’s publicly available. The burden of proof would be on you to provide research on why that methodology is incorrect. https://www.bls.gov/news.release/cpi.nr0.htm https://www.bls.gov/news.release/cpi.nr0.htm > The CPIs are based on prices of food, clothing, shelter, fuels, transportation, doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living. Prices are collected each month in 75 urban areas across the country from about 6,000 housing units and approximately 22,000 retail establishments (department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments). All taxes directly associated with the purchase and use of items are included in the index. Prices of fuels and a few other items are obtained every month in all 75 locations. Prices of most other commodities and services are collected every month in the three largest geographic areas and every other month in other areas. Prices of most goods and services are obtained by personal visits or telephone calls by the Bureau’s trained representatives.
- caeril 5y ago
  > why that methodology is incorrect A lot of people take issue with hedonic adjustments, substitution threshold, etc - but the specific methdology used is far less important than the fact that they're simply lying about the data. For one example, the obvious elephant in the room is the shelter category. In the last year, rents are up 12%[1], and home prices have soared nearly 20%[2] Yet, from your own source, the BLS is claiming 3.2% for the shelter category. It's not so much that the methodology is wrong (although that argument could be made as well), but that they're flat out lying. And then you have to contend with the Gell-Mann amnesia effect: if they're lying to your face about the shelter category, what makes you think the data in any of the other categories, for which you have less third party data to corroborate, are not also completely fabricated? [1] https://www.apartmentlist.com/research/national-rent-data https://www.apartmentlist.com/research/national-rent-data [2] https://fred.stlouisfed.org/series/CSUSHPISA https://fred.stlouisfed.org/series/CSUSHPISA
  - AlexandrB 5y ago

vxNsr 5y ago

This is the same administration that claimed we saved $0.49 on a 4th of July BBQ this year, bec they cut out all the meat compared to the BBQ last year. I’m sorry but you can explain all you want. I’m not buying it (at any price)

Dylan16807 5y ago
Where? I'm searching that number and I can't find anything. I found this, which is comparing the same quantities and has five pounds of meat. https://twitter.com/WhiteHouse/status/1410709115333234691 https://twitter.com/WhiteHouse/status/1410709115333234691 There's a bunch of complaints about other prices, and people pointing out the prices are up 8% since 2019, but I don't see anything about "cutting out all the meat" and I don't see the number 49 anywhere. And the ground beef had the second biggest percent drop in price in that list, anyway.
- notafraudster 5y ago
  The Tweet you noted is the official tweet on this. The parent quote is relying on existing "rebuttals" of that post by conservatives, which have eventually become broken telephone to the degree that the parent comment believes Joe Biden banned meat to falsely reduce the cost of July 4th. It's funny because the actual quote is stupid enough -- trying to emphasize some marginal rounding error national savings on 5 pounds of meat when the entire world has been exploded for the last two years is a baffling claim and an obvious attempt to put lipstick on the whole situation, these guys are absolute clowns, and the April-onwards hubris of "COVID's over, we saved the day!!!" is just a national embarrassment. The specific "ban meat" bugbear has been a very active talking point among conservatives. You see, the Green New Deal (which is predicted in the book of Revelation) involves Andrea McDonald-Cortisol personally banning you from eating meat. The ground truth at the heart of it is that the Green New Deal, which is as much an expression of intent as it is an actual policy document, correctly notes that cattle raised for beef contribute to greenhouse gasses (both through methane production, CO2 production, and clear-cutting of valuable carbon sinks to produce grazeland). This is of course indisputably true. The document doesn't actually prescribe any restrictions on meat so much as it acknowledges that the size of meat's contribution to our climate economics makes it unlikely we'll hit long term targets without rethinking our relationship with meat. Compound that with the fact that some liberals, including Barack Hussein Obama's awful wife!!!!, did initiatives like a "meatless monday", and you have all the proof you need that liberals are banning your meat. It is less clear to me who is the first particular commentator to combine the "Biden is going to ban meat (and guns, and god, and everything else you hold dear, which is not a surprise because he stole the election, and he's senile)" argument and the "Biden claimed the 4th of July will be cheaper which is false because we have Zimbabwe level inflation" argument. A few random sources of very concerned RW commentators talking about liberals taking away your meat, all before the present controversy: https://www.washingtonpost.com/nation/2019/03/01/latest-right-wing-attack-democrats-they-want-take-away-your-hamburgers/ https://www.washingtonpost.com/nation/2019/03/01/latest-righ... https://www.washingtonpost.com/nation/2021/04/26/republicans-meat-biden-climate-plan/ https://www.washingtonpost.com/nation/2021/04/26/republicans... https://edition.cnn.com/2021/04/26/politics/fact-check-biden-climate-plan-red-meat-hamburger/index.html https://edition.cnn.com/2021/04/26/politics/fact-check-biden...

makeitdouble 5y ago

An interesting point raised in the NPR piece is that sometimes your basket stays the same at the same price, but the content is actually inferior in subtle and not so subtle ways. My personal observation on the snacks I buy: they are the same volume and taste mostly the same, but the ingredients shifted over time, in particular relating to flavor (e.g. less sugar and more "sugary stuff") BTW In parallel they introduced "rich" versions that are more "luxury", clearly distinct from the standard product, and contain better ingredients overall. I'd expect a number of people to have switched to the pricer version, even if they were really seeking the "old" standard version.

quickthrower2 5y ago
I think they try to account for this in a hedonic index - https://en.wikipedia.org/wiki/Hedonic_index https://en.wikipedia.org/wiki/Hedonic_index
- makomk 5y ago
  Pretty sure that only accounts for easy-to-measure headline specifications - for example, it takes into account that people are buying 55" TVs when a few years ago they might've bought 32" TVs, but ignores the fact that you need to buy a 55" TV to get similar sound and picture quality to a 32" TV from a few years ago due to quality reductions in smaller sets. Also, I strongly suspect any methodology using measurements of how much extra people were willing to pay when both were available overestimates the value of the improvements to all the other people who switched to the "better" product when the cheaper one was discontinued, since most of them didn't consider paying the extra to be worth it. For example, if someone needs a flash drive to transfer small documents around buys a 32GB one when they would've bought a 8GB one a few years ago because that's now the option that's cheap to manufacture and readily available, they don't get the same benefit that someone who paid extra for the 32GB model over the 8GB a few years ago did.
  - nradov 5y ago
    Your facts are wrong. At the same price point, the 32" TVs available today have better picture and sound quality than those from a few years ago. Check the archived manufacturer specifications and independent reviews.

kybernetyk 5y ago

In Germany that basket regularly changes contents to keep the official inflation at a politically opportune level. People here still believe that inflation is around 3% - yet the prices have exploded.

emn13 5y ago
This sure sounds like conspiratorial thinking - unless you have any evidence thereof. A quick bit of googling found this: https://www.destatis.de/DE/Themen/Wirtschaft/Preise/Verbraucherpreisindex/Methoden/Downloads/waegungsschema-2015.html https://www.destatis.de/DE/Themen/Wirtschaft/Preise/Verbrauc... which sure seems to suggest the basket was last changed in 2015 (i.e. this isn't something being fiddled by anybody, let alone on a political whim - it's too slow moving for that). And the actual inflation currently using that system is 4.1-14.3% depending on which of the three baskets you're looking at. Also, consider that inflation numbers are necessarily lagging reality; they're not updated live by tracking residents or anything like that. For example, september's numbers are available and quoted above, but October's are not (and are projected to be higher). This kind of conspiratorial thinking is harmful; it reduces trust, and thereby encourages everybody to skimp on the rules making everybody worse off. It's a classic prisoner's dilemma - we're better off just not playing that game. I'm sure the process of inflation-computation is imperfect, but let's talk about concrete, verifiable problems or better yet suggestions for improvements instead of nebulous feelings of disagreement. By the looks of it, the official statistics confirm that inflation is spiking, but simply not yet to dramatic numbers (i.e. the kind of numbers that instantly change how we all think about money). If you feel that inflation is significantly higher, then why?
imtringued 5y ago
The official numbers are around 4.5% to 5% and everyone knows it's a combination of higher energy prices, more taxes (VAT rebate is gone, CO2 tax is up), shortage of materials and reopening of the economy.

vmception 5y ago

Maybe we should start using all that data we are collecting from people’s recurring spending and post time series data points. If people are ordering the same groceries then we should be able to make our own regional data plots. We dont need the government for this. They need us to support them. And right now thats just this decade long debate about CPI and inflation, which is now accelerating due to the currency supply shock over the last year as people are converted into paying attention to this discussion.

yosito 5y ago

> calculated by using the price of a standardized basket of things Doesn't this sort of assume that the needs and wants of society stay consistent over time? I wonder if that is a valid assumption with how fast the world changes these days. For example, smartphones were hardly necessary 10 years ago, but now everyone needs one. And modes of transportation have changed: now we have Uber and a large number of electric cars, which wasn't the case 10 years ago. How could an index that includes things like the price of gas be an accurate measure, if society's needs are constantly in flux?

gruez 5y ago
>How could an index that includes things like the price of gas be an accurate measure, if society's needs are constantly in flux? The basket can and does get adjusted.
HWR_14 5y ago
Please note, the price of gas affects the price of Uber rides/

nathias 5y ago

It's so weird anyone would accept this as a measure if the standardized basket changes with time.

sokoloff 5y ago
It would be weird to accept it if the basket didn’t change over time. I don’t care what a farrier charges to reshoe a horse or what a block of icebox ice costs, but I might have only 100 years ago. Surely we’d need a way to include entertainment and lifestyle changes as they happen. 1973 CPI didn’t include any costs for personal computers, Internet service, mobile phones, etc.
- nathias 5y ago
  A meter that would be of different length every time you would measure something would not be useful for measuring. I'm not sure that it would be made better by including your changing lifestyle and entertainment preferences as they happen.

throw0101a 5y ago

> It's indicative of inflation overall, but every person's personal inflation rate is different […] For Canadians, StatCan has a "personal inflation" calculator where you can enter your own bills for their own basket of goods and services and get a personal number: * https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020015-eng.htm https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020015...