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Inflation isn't meant to measure the change in consumer purchasing power. There's CPI and PPI and other measures to measure how prices change to different grou
by onlyrealcuzzo 4y ago
Inflation isn't meant to measure the change in consumer purchasing power.
There's CPI and PPI and other measures to measure how prices change to different groups.
If you want to measure the change in purchasing power just measure corporate revenues by sector to PPI by sector. Or CPI to HH or personal income.
- troad 4y ago> just measure corporate revenues by sector to PPI by sector. Or CPI to HH or personal income This sounds very cryptic to me. Could someone explain what this means, and why it measures changes in purchasing power?
- onlyrealcuzzo 4y agoCPI is supposed to measure the change in prices as it affects consumers. It's obviously not perfect. Not all consumers have the same type of spending. In particular, the housing component... Anyway - if consumer prices go up 10%, but HH income goes up only 2% - then consumers have lost ~8% of their purchasing power.