7 ms·

Inflation rose to 7.9% in February, led by food and energy

60 points by scruple 5y ago

jansen555 5y ago
tharne 5y ago
The media needs to be more truthful with these headlines. This one makes it look like inflation rose 7.9% in February, when in fact it rose 7.9% in the last twelve months. Still bad, but very different from a 7.9% jump in one month. And yes, they do clarify that point in the article, which suggests that the headline is purposely misleading to get more clicks.
- deleted 5y ago
  [deleted]
- Mikeb85 5y ago
  I mean, YoY is more useful than monthly numbers (because there's always seasonal variation in certain goods). But yes, the title could have been worded more clearly.
- OrlandoHakim 5y ago
  I think that’s a reasonable request. Inflation rose at a 7.9% annualized rate in February. However, I’ve always been bothered by the official inflation numbers as they use a single gameable metric (CPI) to describe a complex phenomenon. The Consumer Price Index (CPI) uses a single number to explain a general rise in prices that affects different consumer segments very differently. For example, it uses a methodology that basically excludes house prices by instead measuring owner equivalent rent. So a 30% y/y increase in house prices is under-reported. Also is uses a specific basket of consumer goods to measure price increases, one that largely excludes high inflation items such as energy, healthcare and higher education. If these things are important to you, your personal inflation rate is likely much higher. Finally, the CPI is calculated using a process of hedonic adjustments - but these only work one-way. For example, if steak gets too expensive, then the CPI basket may swap out ground meat instead, but if the price of a 50” flat screen TV comes down, then it is reflected in CPI with no hedonic adjustment.
  - deleted 5y ago
    [deleted]
  - sokoloff 5y ago
    I think hedonic adjustments do happen in both directions in the survey-based method used. “What did you spend money on?” captures the fact that more people are prone to buy more 50” TVs when they cost 3 tanks of gas than when they used to cost 6 weeks of pay. When items purchased are judged to be of lower quality than before, they are penalized in the adjustment process just as the converse happens.
    - OrlandoHakim 5y ago
      I was curious and from further investigation I came across this article on hedonic adjustments which goes through several examples [0] The author explains that for all practical purposes hedonic adjustments only happen in one direction and they therefore discount the corresponding price increase in the underlying good. They are manually curated and suffer from bias of the estimators. For example when airline baggage fees were added separate from ticket prices, there was no hedonic adjustment. However hedonic adjustment is used to discount the increase in the price of Honda Accords over time. The article was previously posted on HN with a healthy discussion that came to the same conclusion. [1] [0] https://www.epsilontheory.com/im-trying-to-understand-hedonic-adjustments/ https://www.epsilontheory.com/im-trying-to-understand-hedoni... [1] https://news.ycombinator.com/item?id=27114135 https://news.ycombinator.com/item?id=27114135
- mym1990 5y ago
  Truthful and media are basically a juxtaposition these days. "Inflation rose .8% in February..." probably just doesn't have the same ring. Although they could have just said "YoY Inflation rose 7.9% in February..."
  - jonny_eh 5y ago
    Enough with bashing reporters (aka "The Media") in general. The work is difficult, but important. If we keep bashing the whole profession then there will be no incentive, or funding, for it to improve, since people will move on to getting their news from even less trustworthy sources. Feel free to criticize individual reporters and articles though. That's how things improve.
    - catskul2 5y ago
      Reporters don't generally write the headlines.
      - jonny_eh 5y ago
        Fine, reporters and editors. Complain about the articles, headlines, and/or specific people. Don't condemn the entire industry, especially when it still has good people doing good work.
- Bud 5y ago
  CNBC is just really shoddy in general with details like this, in addition to having a strong tendency towards negative reporting and negative headlines in general. https://bulloakcapital.com/blog/is-cnbc-biased/ https://bulloakcapital.com/blog/is-cnbc-biased/
- yalogin 5y ago
  Is it possible they missed a "to" in the title? Should it have been "Inflation rose to 7.9%"?
  - tharne 5y ago
    I didn't even notice that, I mentally inserted the "to" without even realizing it. Good catch.
    - scruple 5y ago
      Ah! I inserted the "to," too, in my own reading. I tried to use the article title for the submission but it was too long so I pared it down and did not catch it when submitting. I was still able to edit the title and, I hope this is okay by HN standards, I've added the "to" to reflect the reality of the situation.
- newaccount2021 5y ago
- krrrh 5y ago
  Another regular frustration is when they say how much a proposed bill will cost but fail to say over how many years. It took me a long time to understand that because spending bills for new indefinite programs are are rarely passed with a bipartisan 60-vote majority in the senate (the last one was the ACA (which was a actually party line vote), and before that Medicare part D in the first Bush administration), they are passed through reconciliation and the rules limit that to a 10 year spending commitment. It still wouldn’t be that hard to include “over 10 years”, or in 2023 for yearly budget increases like military spending. Instead they regularly say “this bill will cost $X” and a casual reader has little context in terms of what it would add to the yearly budget in % terms.
vondur 5y ago
I don't think these numbers reflect the current high prices for energy. I wonder how much more it will be for next month?
- mym1990 5y ago
  https://www.bls.gov/news.release/pdf/cpi.pdf https://www.bls.gov/news.release/pdf/cpi.pdf shows some data on energy on the 2nd page.
- mpfundstein 5y ago
  we had 110% inflation on electricity prices (netherlands)
  - akvadrako 5y ago
    Is that all? My per m³ and per kw rates for gas and power will triple when my contract runs out in May. And since companies are not even offering fixed-rate contracts anymore it probably won't be the end.
baal80spam 5y ago
Worth to add that this level is exactly as expected (consensus).
- 99_00 5y ago
  Why is that useful to know?
  - sokoloff 5y ago
    Because numbers that are expected/inline with consensus generally don’t disrupt markets (positively or negatively).
- jonny_eh 5y ago
  Expected from which point in time and by whom?
- jonny_eh 5y ago
  Expected from which point in time and by whome?
partiallypro 5y ago
We haven't even begun to see the effects of wheat, corn and oil spikes from the past 2 weeks. This number is largely without Putin's war
- throwaway_4ever 5y ago
  10% incoming
motohagiography 5y ago
If that were the return on a portfolio in a down market, someone might wonder if it were a scam or theft - and then it lands that yes, that is exactly what it is. When a government funds itself and its coalition by debasing its currency with interest rates lower than the rate of inflation (which are in effect, negative), reducing the purchasing power of their peoples' dollar, causing consumer prices to rise relative to their supply chain input factors, and deplating the value of the peoples incomes and savings - that is a straight distraction theft by a sanctimonious bandit who tells you they are robbing you for your own good.
- ephbit 5y ago
  As I understand it, lending and increasing debt is simply the en vogue way of governments to make sure they can finance their budgets. (And budgeting is one of the most important ways in which governments implement their election programmes.) There's different ways in which governments can finance new/increased/additional expenses: 1. raise taxes 2. cut other spending 3. take on more debt With Modern Monetary Theory MMT being enticing and shiny .. and balanced budgeting as just an annoying unnecessary burden on energetic and enthusiastic policy making as the predominant narrative (which is perpetually being pushed by most media; and I have the impression most people fall for it, even though it's dangerous and unsound IMO) .. it seems obvious that politicians - who want to get reelected - tend to choose option 3. Because of this current mainstream opinion about government debt/budgeting, option 3 is currently the least damaging to politicians' popularity .. which is why it's chosen practically all the time. If citizens want less money printing, they simply need to put pressure on politicians to make use of options 1 (raise taxes; for the rich) and 2 (cut other spending) instead of option 3.
popctrl 5y ago
I've seen this asked on social media platforms and I'll admit ignorance on the matter, but this seems like a place to get better analysis. What does it really mean when inflation is going crazy, but also many businesses are making really absurd, record profits? Is that a normal occurrence in periods of high inflation? It really feels more like price gouging than inflation to me, but like I said, I'm ignorant about economics. How much inflation can be explained by the changes in the labor pool and government spending, compared to companies just charging more and hoarding more?
- dragonwriter 5y ago
  > What does it really mean when inflation is going crazy, but also many businesses are making really absurd, record profits? That's...normal. Outside of stagflation (which is exceptional among inflationary conditions, hence the special name) inflation tends to be positively correlated with economic growth which is positively correlated with profits Inflation suddenly becoming an issue right around the same time that a rapid bounce back from the COVID slowdown took hold wasn't a weird coincidence.
  - lifeplusplus 5y ago
    Thinking inflation is positively correlated with profits is like getting punched in face is positively correlated with increased healing. Or Earth quakes are good for economy because they create more economic activity.
- throw0101a 5y ago
  > What does it really mean when inflation is going crazy, but also many businesses are making really absurd, record profits? If a business' costs go up, they can raise their prices to maintain their margins. > How much inflation can be explained by the changes in the labor pool and government spending, compared to companies just charging more and hoarding more? If the main components are food and energy, then the things you listed are less likely to be the causes. Though energy prices could be a reflection (pre-Ukraine) of more economic activity generally as people stop staying at home and (e.g.) travel.
- 5y ago
data4lyfe 5y ago
Is there a way to calculate exactly how much this affects the every day person? Specifically what I'm looking for is a table breaking down the costs by category. For example - I don't really drive that much on a day to day basis compared to the average American, and so if it's a huge 50% increase in gas prices yoy, that over indexes the inflation number for me because I might drive 80% less than the average American. So I would assume that inflation is really <7.9% for me.
- throw0101a 5y ago
  Is this what you're looking for? * https://www.bls.gov/news.release/cpi.t01.htm https://www.bls.gov/news.release/cpi.t01.htm For anyone in Canada, StatCan has a "Personal Inflation Calculator": * 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...
- juanci_to 5y ago
  Inflation rates tend to be calculated from the average on many different things. So it can be tricky to understand how much it's really affecting. Imagine it like this: if it only was measuring for the prices of potatoes and gas, and potatoes went up by 2.5% and gas did the same by 7.5%, then the inflation would be like 5% but it's not clear Source: In my country, the government forces some product prices to be limited so they can trick us in to believing that the problem is smaller than it actually is
ankaAr 5y ago
Almost a heart attack when I read this.. -7.9% in a month?!!! Then i read the "to" Bleh, that is almost nothing for us (Argentina, that is good for 2 months, twelve sounds like paradise.. )
simonblack 5y ago
What's the real figure? What does Shadowstats say? http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts

60 points by scruple 5y ago

The media needs to be more truthful with these headlines. This one makes it look like inflation rose 7.9% in February, when in fact it rose 7.9% in the last twelve months. Still bad, but very different from a 7.9% jump in one month. And yes, they do clarify that point in the article, which suggests that the headline is purposely misleading to get more clicks.

deleted 5y ago
[deleted]
Mikeb85 5y ago
I mean, YoY is more useful than monthly numbers (because there's always seasonal variation in certain goods). But yes, the title could have been worded more clearly.
OrlandoHakim 5y ago
I think that’s a reasonable request. Inflation rose at a 7.9% annualized rate in February. However, I’ve always been bothered by the official inflation numbers as they use a single gameable metric (CPI) to describe a complex phenomenon. The Consumer Price Index (CPI) uses a single number to explain a general rise in prices that affects different consumer segments very differently. For example, it uses a methodology that basically excludes house prices by instead measuring owner equivalent rent. So a 30% y/y increase in house prices is under-reported. Also is uses a specific basket of consumer goods to measure price increases, one that largely excludes high inflation items such as energy, healthcare and higher education. If these things are important to you, your personal inflation rate is likely much higher. Finally, the CPI is calculated using a process of hedonic adjustments - but these only work one-way. For example, if steak gets too expensive, then the CPI basket may swap out ground meat instead, but if the price of a 50” flat screen TV comes down, then it is reflected in CPI with no hedonic adjustment.
- deleted 5y ago
  [deleted]
- sokoloff 5y ago
  I think hedonic adjustments do happen in both directions in the survey-based method used. “What did you spend money on?” captures the fact that more people are prone to buy more 50” TVs when they cost 3 tanks of gas than when they used to cost 6 weeks of pay. When items purchased are judged to be of lower quality than before, they are penalized in the adjustment process just as the converse happens.
  - OrlandoHakim 5y ago
    I was curious and from further investigation I came across this article on hedonic adjustments which goes through several examples [0] The author explains that for all practical purposes hedonic adjustments only happen in one direction and they therefore discount the corresponding price increase in the underlying good. They are manually curated and suffer from bias of the estimators. For example when airline baggage fees were added separate from ticket prices, there was no hedonic adjustment. However hedonic adjustment is used to discount the increase in the price of Honda Accords over time. The article was previously posted on HN with a healthy discussion that came to the same conclusion. [1] [0] https://www.epsilontheory.com/im-trying-to-understand-hedonic-adjustments/ https://www.epsilontheory.com/im-trying-to-understand-hedoni... [1] https://news.ycombinator.com/item?id=27114135 https://news.ycombinator.com/item?id=27114135
mym1990 5y ago
Truthful and media are basically a juxtaposition these days. "Inflation rose .8% in February..." probably just doesn't have the same ring. Although they could have just said "YoY Inflation rose 7.9% in February..."
- jonny_eh 5y ago
  Enough with bashing reporters (aka "The Media") in general. The work is difficult, but important. If we keep bashing the whole profession then there will be no incentive, or funding, for it to improve, since people will move on to getting their news from even less trustworthy sources. Feel free to criticize individual reporters and articles though. That's how things improve.
  - catskul2 5y ago
    Reporters don't generally write the headlines.
    - jonny_eh 5y ago
      Fine, reporters and editors. Complain about the articles, headlines, and/or specific people. Don't condemn the entire industry, especially when it still has good people doing good work.
Bud 5y ago
CNBC is just really shoddy in general with details like this, in addition to having a strong tendency towards negative reporting and negative headlines in general. https://bulloakcapital.com/blog/is-cnbc-biased/ https://bulloakcapital.com/blog/is-cnbc-biased/
yalogin 5y ago
Is it possible they missed a "to" in the title? Should it have been "Inflation rose to 7.9%"?
- tharne 5y ago
  I didn't even notice that, I mentally inserted the "to" without even realizing it. Good catch.
  - scruple 5y ago
    Ah! I inserted the "to," too, in my own reading. I tried to use the article title for the submission but it was too long so I pared it down and did not catch it when submitting. I was still able to edit the title and, I hope this is okay by HN standards, I've added the "to" to reflect the reality of the situation.
newaccount2021 5y ago
krrrh 5y ago
Another regular frustration is when they say how much a proposed bill will cost but fail to say over how many years. It took me a long time to understand that because spending bills for new indefinite programs are are rarely passed with a bipartisan 60-vote majority in the senate (the last one was the ACA (which was a actually party line vote), and before that Medicare part D in the first Bush administration), they are passed through reconciliation and the rules limit that to a 10 year spending commitment. It still wouldn’t be that hard to include “over 10 years”, or in 2023 for yearly budget increases like military spending. Instead they regularly say “this bill will cost $X” and a casual reader has little context in terms of what it would add to the yearly budget in % terms.

vondur 5y ago

I don't think these numbers reflect the current high prices for energy. I wonder how much more it will be for next month?

mym1990 5y ago
https://www.bls.gov/news.release/pdf/cpi.pdf https://www.bls.gov/news.release/pdf/cpi.pdf shows some data on energy on the 2nd page.
mpfundstein 5y ago
we had 110% inflation on electricity prices (netherlands)
- akvadrako 5y ago
  Is that all? My per m³ and per kw rates for gas and power will triple when my contract runs out in May. And since companies are not even offering fixed-rate contracts anymore it probably won't be the end.

baal80spam 5y ago

Worth to add that this level is exactly as expected (consensus).

99_00 5y ago
Why is that useful to know?
- sokoloff 5y ago
  Because numbers that are expected/inline with consensus generally don’t disrupt markets (positively or negatively).
jonny_eh 5y ago
Expected from which point in time and by whom?
jonny_eh 5y ago
Expected from which point in time and by whome?

partiallypro 5y ago

We haven't even begun to see the effects of wheat, corn and oil spikes from the past 2 weeks. This number is largely without Putin's war

throwaway_4ever 5y ago
10% incoming

motohagiography 5y ago

If that were the return on a portfolio in a down market, someone might wonder if it were a scam or theft - and then it lands that yes, that is exactly what it is. When a government funds itself and its coalition by debasing its currency with interest rates lower than the rate of inflation (which are in effect, negative), reducing the purchasing power of their peoples' dollar, causing consumer prices to rise relative to their supply chain input factors, and deplating the value of the peoples incomes and savings - that is a straight distraction theft by a sanctimonious bandit who tells you they are robbing you for your own good.

ephbit 5y ago
As I understand it, lending and increasing debt is simply the en vogue way of governments to make sure they can finance their budgets. (And budgeting is one of the most important ways in which governments implement their election programmes.) There's different ways in which governments can finance new/increased/additional expenses: 1. raise taxes 2. cut other spending 3. take on more debt With Modern Monetary Theory MMT being enticing and shiny .. and balanced budgeting as just an annoying unnecessary burden on energetic and enthusiastic policy making as the predominant narrative (which is perpetually being pushed by most media; and I have the impression most people fall for it, even though it's dangerous and unsound IMO) .. it seems obvious that politicians - who want to get reelected - tend to choose option 3. Because of this current mainstream opinion about government debt/budgeting, option 3 is currently the least damaging to politicians' popularity .. which is why it's chosen practically all the time. If citizens want less money printing, they simply need to put pressure on politicians to make use of options 1 (raise taxes; for the rich) and 2 (cut other spending) instead of option 3.

popctrl 5y ago

I've seen this asked on social media platforms and I'll admit ignorance on the matter, but this seems like a place to get better analysis. What does it really mean when inflation is going crazy, but also many businesses are making really absurd, record profits? Is that a normal occurrence in periods of high inflation? It really feels more like price gouging than inflation to me, but like I said, I'm ignorant about economics. How much inflation can be explained by the changes in the labor pool and government spending, compared to companies just charging more and hoarding more?

dragonwriter 5y ago
> What does it really mean when inflation is going crazy, but also many businesses are making really absurd, record profits? That's...normal. Outside of stagflation (which is exceptional among inflationary conditions, hence the special name) inflation tends to be positively correlated with economic growth which is positively correlated with profits Inflation suddenly becoming an issue right around the same time that a rapid bounce back from the COVID slowdown took hold wasn't a weird coincidence.
- lifeplusplus 5y ago
  Thinking inflation is positively correlated with profits is like getting punched in face is positively correlated with increased healing. Or Earth quakes are good for economy because they create more economic activity.
throw0101a 5y ago
> What does it really mean when inflation is going crazy, but also many businesses are making really absurd, record profits? If a business' costs go up, they can raise their prices to maintain their margins. > How much inflation can be explained by the changes in the labor pool and government spending, compared to companies just charging more and hoarding more? If the main components are food and energy, then the things you listed are less likely to be the causes. Though energy prices could be a reflection (pre-Ukraine) of more economic activity generally as people stop staying at home and (e.g.) travel.
5y ago

data4lyfe 5y ago

Is there a way to calculate exactly how much this affects the every day person? Specifically what I'm looking for is a table breaking down the costs by category. For example - I don't really drive that much on a day to day basis compared to the average American, and so if it's a huge 50% increase in gas prices yoy, that over indexes the inflation number for me because I might drive 80% less than the average American. So I would assume that inflation is really <7.9% for me.

throw0101a 5y ago
Is this what you're looking for? * https://www.bls.gov/news.release/cpi.t01.htm https://www.bls.gov/news.release/cpi.t01.htm For anyone in Canada, StatCan has a "Personal Inflation Calculator": * 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...
juanci_to 5y ago
Inflation rates tend to be calculated from the average on many different things. So it can be tricky to understand how much it's really affecting. Imagine it like this: if it only was measuring for the prices of potatoes and gas, and potatoes went up by 2.5% and gas did the same by 7.5%, then the inflation would be like 5% but it's not clear Source: In my country, the government forces some product prices to be limited so they can trick us in to believing that the problem is smaller than it actually is

ankaAr 5y ago

Almost a heart attack when I read this.. -7.9% in a month?!!! Then i read the "to" Bleh, that is almost nothing for us (Argentina, that is good for 2 months, twelve sounds like paradise.. )

simonblack 5y ago

What's the real figure? What does Shadowstats say? http://www.shadowstats.com/alternate_data/inflation-charts http://www.shadowstats.com/alternate_data/inflation-charts