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> A significant portion of consumer inflation is still being driven by pandemic-driven mismatches between demand and supply. Or maybe printing 40% more dollars

• khuey 5y ago
  If you drill into the data you can see that large portions of the measured inflation are driven specifically by sectors like automobiles which have known pandemic-induced supply chain problems.
  • seibelj 5y ago
    But why is my grocery bill 40% higher than it was 2 years ago? We have bought the same basket for years.
    • shmatt 5y ago
      The chip shortage can affect farms. Their new pick up or tractor might cost 40% more There is also a big labor shortage. If you're in the U.S a lot of your basket is coming from California. In 2020 H2A visa holders (farm workers) were payed $14.77/hr. In 2022 its $17.51/hr What happens when you can't even get the Visas? You start approaching American locals, who want much more per hour than a Visa holder. They actually want a living wage This whole labor shortage +inflation thing to me just means - people are figuring out how much it actually costs to make what you consume, when employees aren't treated like garbage
    • gruez 5y ago
      The official CPI for "Food at home"[1] rose 10.6% in the past two years, so that accounts for a quarter of the difference. As for the rest, my guess it's a combination of your numbers not being reflective of the nation-wide average, your basket subtly changing (ie. buying more premium goods), and you spending more on "food at home" because you no longer go out to eat. [1] https://fred.stlouisfed.org/series/CUSR0000SAF11 https://fred.stlouisfed.org/series/CUSR0000SAF11
    • mbbutler 5y ago
      I keep a monthly accounting of my grocery costs (along with all other expenses) in a spreadsheet. I haven't seen my grocery bill increase by anywhere close to 40% over the past two years. edit: My bill went from ~$600 to ~$650 using a 4 month window rolling average.
      • 01100011 5y ago
        Does that account for shrinkflation? Personally I have noticed I now alter the foods I choose to buy because of the high prices. I am buying more staples and trying to cut costs because the price of seemingly everything besides dairy and chicken(when you can find wings that is) has gone up.
        • mbbutler 5y ago
          Due to dietary restrictions my basket has remained mostly unchanged for years. Every grocery trip is basically vegetables, meat, brown rice, milk, cheese, and cooking oils or spices if needed.
        • UncleMeat 5y ago
          I'm personally observing a similar increase (a little less than 10%) in my monthly grocery bill. Virtually nothing I purchase has been affected by shrinkflation. The only notable exception is paper towels.
      • the-dude 5y ago
        Why omit your actual increase?
        • mbbutler 5y ago
          Just added it.
      • maxfurman 5y ago
        This seems to be an ~8% increase, in line with the numbers from the linked article.
    • rootusrootus 5y ago
      Our local Cheesecake Factory won't sell any food that isn't pasta or cheesecake due to shortages in necessary ingredients. The grocery stores in my area (Portland, Oregon) have inconsistent inventory -- lots of some things, practically zero of others. And some I don't really understand -- I had to go to three different stores to find heavy cream a week ago. WTF? I expect this disruption is driving a lot of the spike in grocery prices.
      • Der_Einzige 5y ago
        WTF, I live in Portland and the only supply chain issues I see are that WinCo is the only place I can get diet orange soda at. What the heck are you talking about? I've seen heavy cream in literally every grocery store I've gone into. Supply chains for food are not screwed there.
        • rootusrootus 5y ago
          I'm glad you've had a better experience than me. I only checked the two closest Fred Meyers and Safeway, not Winco.
          • mixmastamyk 5y ago
            Plenty at Trader Joe’s in CA.
        • yojo 5y ago
          Two days ago at least Whole Foods here (SE Portland) was pretty messed up. No meat, almost no butter, produce bins were cleared out, some brands of yogurt were gone, etc. New Seasons was better, so maybe just an Amazon thing. But that’s at least one screwed up supply chain
        • 2trill2spill 5y ago
          Have you been to a Fred Myers recently? It's amazing how much stuff in the meat and dairy sections are not available anymore.
      • 5y ago
    • JaimeThompson 5y ago
      In part because of consolidation in the industries relating to food. https://www.nytimes.com/2021/12/27/business/beef-prices-cattle-ranchers.html https://www.nytimes.com/2021/12/27/business/beef-prices-catt... In this example the price paid to ranchers for beef hasn't risen all that much but the end user price has increased drastically. That the meat processing industry has 4? companies controlling 80+% doesn't help.
      • 01100011 5y ago
        Why didn't the lack of competition result in higher prices before COVID? I don't know, but it seems like farmers negotiate contracts in advance, so if futures prices are driven up by speculators using easy money then there will be a period of time where farmers are selling for less than they otherwise could because they negotiated futures contracts. Isn't the whole point of the futures market to provide farmers with stable prices, not optimal prices?
    • bryanlarsen 5y ago
      > But why is my grocery bill 40% higher than it was 2 years ago? Massive widespread crop failure. https://www.bakingbusiness.com/articles/54799-usda-confirms-2021-wheat-crop-the-smallest-since-2002 https://www.bakingbusiness.com/articles/54799-usda-confirms-...
    • SubiculumCode 5y ago
      There is a lot of monopolistic control in the food industry, allowing them the ability to increase prices indiscriminately in response to increase salary (not necessarily more demand)
    • cjbgkagh 5y ago
      I buy exactly the same things every week and my grocery bill has gone up 25% in the last 12 months.
    • willcipriano 5y ago
      You didn't account for the hedonic adjustments, yeah those Oreos cost more than last year but they have pumpkin flavor now!
  • alex_sf 5y ago
    If everything has supply chain problems leading to rising prices for long enough that it results in rising wages.. isn't that just inflation? I've heard this take before, and it's not wrong that a few sectors are driving it, but it's not super relevant imo.
    • khuey 5y ago
      It's inflation yes but the solution isn't tweaking monetary policy, it's fixing the supply chains.
    • DSMan195276 5y ago
      The top comment is proposing that the supply chain issues are not the cause of inflation, that's the issue. Unless printing more dollars is what broke the supply chain then they're not directly related.
• tharne 5y ago
  I'm amazed at the amount of rhetorical gymnastics going on in DC to lay the blame for inflation at the feet of anything besides the obvious - the massive amount of money printing going on the last few years. The most ridiculous of these is the "corporate greed storyline" I've seen pushed lately. As if all the corporations suddenly decided to become greedy in the last twelve months after many years of altruistic and selfless behavior.
  • throwaway6734 5y ago
    We've seen massive supply chain disruptions over the past two years. It's seems incredibly obvious that that would have an impact on available supply
  • oldandboring 5y ago
    And I'm amazed at how gold-bug conservatives so conveniently ignore the previous 13 years of furious money-printing that accompanied near-zero inflation levels. I run a business. For years I held off on price increases (or kept them to a minimum) because my competitors and vendors weren't raising theirs and the labor market wasn't insanely competitive. Now, all my vendors are raising prices, all my competitors are raising prices, and all my employees can easily command big raises due to the power they wield in the job market, so I'm raising mine. And all my clients are raising their prices for the exact same reason as me, so I don't have to worry about losing them as clients, I know they can absorb my costs. This is the viscous-cycle of inflation as it's actually experienced. Now, that being said, we agree that the "corporate greed" storyline is lame. You see this also in places like Reddit r/antiwork where all companies and bosses are perceived as greedy, malicious labor exploiters. I just feel that behavioral economics is more a cause here than the money-supply forces you're describing.
    • inglor_cz 5y ago
      You may also smoke for 13 years with no cancer, then boom, suddenly you have cancer. And those 13 years played a role in its onset. There are expectations built into economy all around. Once enough people expect that the money printing will continue and increase, the change in collective behavior may be fairly sudden.
• phkahler 5y ago
  A piece on the radio yesterday said that officially (statistically) rents aren't up much, but new leases and people renewing are seeing something like 20+ percent increases. IMHO there is a LOT going on that's not captured by the official numbers.
  • oneoff786 5y ago
    From what? The pre pandemic numbers? Or the minimized numbers you saw during urban flights right at the start?
  • mulcahey 5y ago
    Are new and renewed leases not the only ways rents can go up? That’s the main point of the lease term for the tenant?
    • nybble41 5y ago
      I think the point is that the official statistic averages all leases—not just new ones. If so, it will lag quite a bit behind changes in the market and not reflect the price you can expect to pay if you're currently shopping for an apartment and not grandfathered in on an existing lease.
• 01100011 5y ago
  If they admit the real cause then they have no choice but to act. Powell has one real mandate: preserve the asset values and thus the power of the current ruling class. He only accepted problematic inflation when it was no longer politically possible to deny it. He's now making non-committal statements regarding continued QE and fed balance sheet reduction. The fed is backed into a corner. They either pop the asset bubble and lose their jobs, or let inflation continue unchecked until their bosses(politicians) lose their jobs. They have a politically powerful generation(boomers) going into retirement. They'll do what it takes to keep them happy. Those folks are already looking at significant inflation in health care due to the mismatch between supply and demand there. Covid is only making that worse by causing early retirements and discouraging young people from going into health care.
  • landemva 5y ago
    In the short term, it looks like Fed may be planning to blame everything on crypto. Nothing really there, but the news cycle will chew on it for awhile.
• jimmytucson 5y ago
  Cynically, every time I hear about a "supply chain" issue in another industry, I think it's a pardonable reason to raise prices to keep up with inflation. Regardless, gotta be foolish to think all prices will settle back down once the "supply chain" unkinks itself.
• throwawaymanbot 5y ago
• UncleMeat 5y ago
  Similar inflation is seen outside of the US, which presumably would not be as affected by US monetary policy.
  • mlindner 5y ago
    Yes and No. Any economic effects in the US are exported to the rest of the world via the US's status as a reserve currency. Most international commerce is done in US dollars so if the US dollar is experiencing inflation so will the international commerce done using it.
• mlindner 5y ago
  I suggest taking a look at this video on the subject. https://www.youtube.com/watch?v=L0pTrNEQ-JU https://www.youtube.com/watch?v=L0pTrNEQ-JU The inflation driven from dollar printing is definitely contributing but a large portion of it is because of lack of labor.