3 ms·
People don't think of inflation quarter to quarter or even FY to FY. They think of it in terms of what they are calibrated to think normal prices are. For most
by thereddaikon 3y ago
People don't think of inflation quarter to quarter or even FY to FY. They think of it in terms of what they are calibrated to think normal prices are. For most people that's going to be pre-pandemic. Since prices have not returned to pre-pandemic levels the economy is bad. Especially so since their wages haven't gone up comparably to match.
This is why the numbers are largely useless at gauging public sentiment. Nobody cares that this quarter the rate of inflation has slowed. They care that chicken breasts cost double what it should. They care that a Ford Mustang GT can cost $50k when they were pretty sure they were $30k. They care that fast food costs as much as a sit down restaraunt should and the sit down costs as much as a nice one should.
Now you can all explain that with numbers and reports but sentiment doesn't care about that. Public opinion is an inherently irrational thing. But it is still incredibly important because elections are decided by it. It doesn't matter if GDP is positive and inflation is good right now if everyone thinks we are in a recession and the prices of everything are too damn high. You will get voted out. I'm not sure why this is a hard concept to grasp.
- somsak2 3y ago> prices have not returned to pre-pandemic levels Are you saying people are expecting CPI deflation? I don't think that's accurate, and it's also definitely not gonna happen.
- thereddaikon 3y agoConsciously? No. Like I said, public sentiment doesn't work that way. People don't want deflation. They want reasonable prices. Its not rational. The only sensible way to achieve that is to get wages increasing so the relative cost of living goes back down.
- geitir 3y agoThe health food bowl I like to get for lunch was $11 and is now $15 A chipotle burrito with carne asada steak and guac is now $17 Amy’s frozen pizza was $6.99 and is now $10 (don’t buy it any more, I’ll be dammed if I spend 10 bucks on frozen pizza)
- vel0city 3y agoI looked up buying a Chipolte Carne Asada Steak and Guac, after tax it was $15. FWIW, I normally get chicken no guac, I think was like $8 or so after tax now its $9.31 after tax. I looked up the price for Amy's Vegan Supreme pizza at my local Kroger, in-stock for $7.99. No sales tax on that item, so just that price.
- geitir 3y agoMust be where you live
- jghn 3y ago> It doesn't matter if GDP is positive and inflation is good right now if everyone thinks we are in a recession and the prices of everything are too damn high. You will get voted out. I'm not sure why this is a hard concept to grasp. Because they're two different concepts. Public sentiment is generally a lagging indicator on the economy. People will think we're still in a high even after the economy has started to falter. And people will still think times are bad even after the economy starts to come back. You are correct that public sentiment is on what people vote. That doesn't mean they are accurately assessing the economy.
- sarchertech 3y agoI’m not talking about public sentiment. I’m responding to someone who was talking about “the numbers they are seeing coming out”. When someone responded what numbers, they listed the things I rebutted. Someone’s belief was causing them to invent numbers coming out to justify that belief.