6 ms·

When I look at the Swedish numbers I feel the same and then I see that prices went down for "photography, audiovisual and computer equipment" and... Nothing els

by piva00 4y ago

When I look at the Swedish numbers I feel the same and then I see that prices went down for "photography, audiovisual and computer equipment" and... Nothing else. Fuel is up 40+%, food by 8-10%, housing by 2%, electricity by 30+%. How the fuck do we end up with a normalised rate of inflation of 6-7%?? I do need to do proper research on the models because just using my common sense it doesn't make any fucking sense...

jokethrowaway 4y ago
It's called "politician's lies"
Normille 4y ago
The graph looks really odd to me too. Even allowing for an uneven distribution of inflation rates, The 'Eurozone average' is way down near the bottom, suggesting most countries have above average inflation --which seems a bit like the old oxymoron "80% of motorists consider themselves to be above average drivers"
- pavlov 4y ago
  The eurozone includes many small countries which also tend to have higher inflation than the big countries. If average inflation is calculated over the whole population, it’s going to be heavily weighted towards the handful of big countries, and so it indeed makes sense that the majority of countries would have higher than average inflation.
- em500 4y ago
  It's weighted by size of the Eurozone countries household expenditure (which is close to GDP), so basically the only ones that matter are Germany, France, Italy and Spain.
itsoktocry 4y ago
>How the fuck do we end up with a normalised rate of inflation of 6-7%? I don't know about Sweden, but the BLS publishes their data and methodology for the CPI calculation. You can quibble about details, that's fair, but it's transparent. It's based on a basket of goods and proportional spending on those goods in the basket. In some calculations food and fuel are excluded because of volatility (controversial, for obviously reasons). Like all averages, it's not going to accurate on any individual level.
- piva00 4y ago
  SCB (Statistiska centralbyrån) very likely does the same, like I mentioned in my comment I need to dig deeper and find the details because the numbers don't make sense for my friends and mine reality so there's something in the modelling that doesn't match the lives I have anecdotal experience with.
- once_inc 4y ago
  Being open about the methodology doesn't mean nobody is actively trying to game it. Replacing A-status products with B-status products, or removing controversial items from the basket and added different products that have favorable inflation effects is actively being done by most countries. Also; this basket doesn't look at things like shrinkflation, such as the size of a snickers bar, or the number of pyramids in a Toblerone bar.
  - Y-bar 4y ago
    They appear to actually consider shrinkflation: > Tittar man på den totala kostnaden för livsmedel bidrar krympflationen som mest med en årlig prisförändring på tre tiondelars procent. > Looking at the total cost for groceries shrinkflation adds three tenths of a percentage to the yearly cost change. https://scb.se/hitta-statistik/redaktionellt/krympflationen-ger-dig-mindre-innehall-for-pengarna/ https://scb.se/hitta-statistik/redaktionellt/krympflationen-... And: > Det är cirka två procent av livsmedlen som ändrar förpackningsstorlek under ett år. Implicita prisförändringar, eller krympflation som vissa kallar det, förklarar cirka 10 procent av de prisuppgångar som sker för förpackade livsmedel. > It is about two percent of groceries that change packaging size every year. Implicit price changes, or shrinkflation as some call it, explains about ten percent of the price increase which happen on packaged groceries. https://scb.se/contentassets/419935bc1ce44b43ae97ee1d5dc6f349/nr0001_2020k02_ti_a28ti2005.pdf https://scb.se/contentassets/419935bc1ce44b43ae97ee1d5dc6f34...
- em500 4y ago
  > In some calculations food and fuel are excluded because of volatility (controversial, for obviously reasons). From the BLS FAQ[1]: Has the BLS removed food or energy prices in its official measure of inflation? No. The BLS publishes thousands of CPI indexes each month, including the headline All Items CPI for All Urban Consumers (CPI-U) and the CPI-U for All Items Less Food and Energy. The latter series, widely referred to as the "core" CPI, is closely watched by many economic analysts and policymakers under the belief that food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy. However, all consumer goods and services, including food and energy, are represented in the headline CPI. Most importantly, none of the prominent legislated uses of the CPI excludes food and energy. Social security and federal retirement benefits are updated each year for inflation by the All Items CPI for Urban Wage Earners The FAQ clarifies a bunch of other CPI misconceptions overheard regularly in internet forums. [1] https://www.bls.gov/cpi/factsheets/common-misconceptions-about-cpi.htm#Question_1 https://www.bls.gov/cpi/factsheets/common-misconceptions-abo...
aeyes 4y ago
Because the inflation indicator is calculated with a typical spending basket, it has several components which are slower to adjust prices. In CPI for example housing is 25% and then you have things like education, healthcare and insurance. Also inflation numbers are usually reported comparing the difference in the last 12 months, you are probably thinking about the pre-pandemic prices so you'll have to add them up.
- martinald 4y ago
  CPI doesn't generally include housing costs, that's usually a seperate measure (CPIH or RPI in the UK).
onlyrealcuzzo 4y ago
If housing is truly only up 2%, it probably makes up 25%+ of the basket. If Food is only up 8% - it's not too hard to imagine how you could get a 7% number... Electricity and fuel don't make up a huge portion of the average consumer's total basket of spending.
- piva00 4y ago
  Groceries are pretty expensive in Sweden, just came back from the shop and spent the equivalent of 20€ and got: 500g of coffee, 12 eggs, 2L of oat milk and bread.
  - turbinerneiter 4y ago
    And how much of your total spending is that? My monthly income goes to (very roughly estimated): * 35% rent * 10% groceries * 10% other stuff (energy, internet, subscriptions) * 10% mobility * 35% savings My rent didn't go up. Not sure if savings are part of inflation (how do you measure inflation for ETFs?). So only 30% of my income is affected by inflation, which is less than half of my spending. Your personal inflation rate will mostly depend on if you live in a new or an old building (e.g. my heating costs are tiny because the building is new) and if you have a car (I only have a motorcycle and I take the bike to work). If you live in an old house and have to drive a fuel-inefficient car to work every day, you are screwed. I think the current inflation is mostly about energy prices and only very little about money supply.
gagaga32221 4y ago
Their "models" don't make any sense at all. All BS.
lapsis_beeftech 4y ago
CPI is worthless as an inflation measure for several reasons but the most obvious one is that it is too simplistic; it tries to model spending of some average consumer but actual consumers vary a lot in both their habits and ability to adapt. For a sense of inflation recently in Sweden, look instead at PPI [1]. Consumers can expect 100% of the cost increase producers see now to get passed on to them eventually. [1] https://www.scb.se/hitta-statistik/statistik-efter-amne/priser-och-konsumtion/prisindex-i-producent-och-importled/prisindex-i-producent-och-importled-ppi/ https://www.scb.se/hitta-statistik/statistik-efter-amne/pris...
yobbo 4y ago
Housing, energy (KPI-XE), and interest rates (KPIF) are excluded from the models. Swedish households are extremely sensitive to interest rates, so there are big incentives to make the numbers smaller.

by piva00 4y ago

jokethrowaway 4y ago

It's called "politician's lies"

Normille 4y ago

The graph looks really odd to me too. Even allowing for an uneven distribution of inflation rates, The 'Eurozone average' is way down near the bottom, suggesting most countries have above average inflation --which seems a bit like the old oxymoron "80% of motorists consider themselves to be above average drivers"

pavlov 4y ago
The eurozone includes many small countries which also tend to have higher inflation than the big countries. If average inflation is calculated over the whole population, it’s going to be heavily weighted towards the handful of big countries, and so it indeed makes sense that the majority of countries would have higher than average inflation.
em500 4y ago
It's weighted by size of the Eurozone countries household expenditure (which is close to GDP), so basically the only ones that matter are Germany, France, Italy and Spain.

itsoktocry 4y ago

>How the fuck do we end up with a normalised rate of inflation of 6-7%? I don't know about Sweden, but the BLS publishes their data and methodology for the CPI calculation. You can quibble about details, that's fair, but it's transparent. It's based on a basket of goods and proportional spending on those goods in the basket. In some calculations food and fuel are excluded because of volatility (controversial, for obviously reasons). Like all averages, it's not going to accurate on any individual level.

piva00 4y ago
SCB (Statistiska centralbyrån) very likely does the same, like I mentioned in my comment I need to dig deeper and find the details because the numbers don't make sense for my friends and mine reality so there's something in the modelling that doesn't match the lives I have anecdotal experience with.
once_inc 4y ago
Being open about the methodology doesn't mean nobody is actively trying to game it. Replacing A-status products with B-status products, or removing controversial items from the basket and added different products that have favorable inflation effects is actively being done by most countries. Also; this basket doesn't look at things like shrinkflation, such as the size of a snickers bar, or the number of pyramids in a Toblerone bar.
- Y-bar 4y ago
  They appear to actually consider shrinkflation: > Tittar man på den totala kostnaden för livsmedel bidrar krympflationen som mest med en årlig prisförändring på tre tiondelars procent. > Looking at the total cost for groceries shrinkflation adds three tenths of a percentage to the yearly cost change. https://scb.se/hitta-statistik/redaktionellt/krympflationen-ger-dig-mindre-innehall-for-pengarna/ https://scb.se/hitta-statistik/redaktionellt/krympflationen-... And: > Det är cirka två procent av livsmedlen som ändrar förpackningsstorlek under ett år. Implicita prisförändringar, eller krympflation som vissa kallar det, förklarar cirka 10 procent av de prisuppgångar som sker för förpackade livsmedel. > It is about two percent of groceries that change packaging size every year. Implicit price changes, or shrinkflation as some call it, explains about ten percent of the price increase which happen on packaged groceries. https://scb.se/contentassets/419935bc1ce44b43ae97ee1d5dc6f349/nr0001_2020k02_ti_a28ti2005.pdf https://scb.se/contentassets/419935bc1ce44b43ae97ee1d5dc6f34...
em500 4y ago
> In some calculations food and fuel are excluded because of volatility (controversial, for obviously reasons). From the BLS FAQ[1]: Has the BLS removed food or energy prices in its official measure of inflation? No. The BLS publishes thousands of CPI indexes each month, including the headline All Items CPI for All Urban Consumers (CPI-U) and the CPI-U for All Items Less Food and Energy. The latter series, widely referred to as the "core" CPI, is closely watched by many economic analysts and policymakers under the belief that food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy. However, all consumer goods and services, including food and energy, are represented in the headline CPI. Most importantly, none of the prominent legislated uses of the CPI excludes food and energy. Social security and federal retirement benefits are updated each year for inflation by the All Items CPI for Urban Wage Earners The FAQ clarifies a bunch of other CPI misconceptions overheard regularly in internet forums. [1] https://www.bls.gov/cpi/factsheets/common-misconceptions-about-cpi.htm#Question_1 https://www.bls.gov/cpi/factsheets/common-misconceptions-abo...

aeyes 4y ago

Because the inflation indicator is calculated with a typical spending basket, it has several components which are slower to adjust prices. In CPI for example housing is 25% and then you have things like education, healthcare and insurance. Also inflation numbers are usually reported comparing the difference in the last 12 months, you are probably thinking about the pre-pandemic prices so you'll have to add them up.

martinald 4y ago
CPI doesn't generally include housing costs, that's usually a seperate measure (CPIH or RPI in the UK).

onlyrealcuzzo 4y ago

If housing is truly only up 2%, it probably makes up 25%+ of the basket. If Food is only up 8% - it's not too hard to imagine how you could get a 7% number... Electricity and fuel don't make up a huge portion of the average consumer's total basket of spending.

piva00 4y ago
Groceries are pretty expensive in Sweden, just came back from the shop and spent the equivalent of 20€ and got: 500g of coffee, 12 eggs, 2L of oat milk and bread.
- turbinerneiter 4y ago
  And how much of your total spending is that? My monthly income goes to (very roughly estimated): * 35% rent * 10% groceries * 10% other stuff (energy, internet, subscriptions) * 10% mobility * 35% savings My rent didn't go up. Not sure if savings are part of inflation (how do you measure inflation for ETFs?). So only 30% of my income is affected by inflation, which is less than half of my spending. Your personal inflation rate will mostly depend on if you live in a new or an old building (e.g. my heating costs are tiny because the building is new) and if you have a car (I only have a motorcycle and I take the bike to work). If you live in an old house and have to drive a fuel-inefficient car to work every day, you are screwed. I think the current inflation is mostly about energy prices and only very little about money supply.

gagaga32221 4y ago

Their "models" don't make any sense at all. All BS.

lapsis_beeftech 4y ago

CPI is worthless as an inflation measure for several reasons but the most obvious one is that it is too simplistic; it tries to model spending of some average consumer but actual consumers vary a lot in both their habits and ability to adapt. For a sense of inflation recently in Sweden, look instead at PPI [1]. Consumers can expect 100% of the cost increase producers see now to get passed on to them eventually. [1] https://www.scb.se/hitta-statistik/statistik-efter-amne/priser-och-konsumtion/prisindex-i-producent-och-importled/prisindex-i-producent-och-importled-ppi/ https://www.scb.se/hitta-statistik/statistik-efter-amne/pris...

yobbo 4y ago

Housing, energy (KPI-XE), and interest rates (KPIF) are excluded from the models. Swedish households are extremely sensitive to interest rates, so there are big incentives to make the numbers smaller.