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Inflation in December was even lower than first reported, the government says
- no_wizard 3y agoReally this strange period of economic activity is one for the history books. All I know is my wallet is thinner than ever and the reporting on inflation always feels out of touch. Prices aren’t dropping and wages aren’t rising to keep pace. That is the reality on the ground. These reports aren’t meaningful at all, and I don’t think the government is taking enough meaningful action to address issues of inequality that these things cause. EDIT: I know inevitably someone will ask "so what should be done?" and thats a valid question. I'm not a trained economist, but I know a few people who are (perk of working in fintech!) and their general consensus seems to be that holding rates steady is smart but the political pressure to lower them will inevitably mean they are likely to get lowered earlier than they likely should be. They also seem to agree that there are components of our current economic system that simply can't be addressed through monetary policy alone and are driving some forms of price inflation but are hard for the government to quantify, such as excess fees becoming common place across many economic activities, for example. Beyond that, its alot of theories and opinions, which I don't think would add more value to this particular post. EDIT 2: I'm not conflating how inflation works. I know it means things go up less not prices come down (thats a different word - deflation - after all), what I'm saying is observational. I am observing this: prices aren't coming down and wages aren't keeping up. That doesn't mean I think nor posit that lowering inflation === lower prices. I think lower inflation as its being presented to via the US media (driven by press releases from the white house and other government agencies) is misleading. Not to mention, there's entire classes of things that their own indicators don't track. For example, calculated inflation excludes housing costs.
- bryanlarsen 3y agoWage growth has been higher than inflation since February. Most of us haven't seen it, but union members and job-hoppers have.
- linkjuice4all 3y agoThis makes sense but job hopping seems to be much harder now considering the competition for laid-off workers. There’s a Bloomberg article on the homepage now about how more people are retiring due to stock gains - so how is unemployment low (and going lower with more people dropping out of the workforce) while LinkedIn is filled with (formally?) white collar people on the verge of homelessness?
- MattGaiser 3y ago> while LinkedIn is filled with (formally?) white collar people on the verge of homelessness? You can fill a LinkedIn feed with about 500 people. Instagram would give you the impression that we are all travelling in business class to new destinations every week.
- cruffle_duffle 3y ago> Instagram would give you the impression that we are all travelling in business class to new destinations every week. And LinkedIn would have you believe we are all incredibly successful executives teeming with wise words.
- bryanlarsen 3y ago3.6% unemployment means job hopping is easy for those at the bottom. They're the ones that usually have problems job hopping, and they're the ones doing so now. Since they're so numerous, they're the ones that are affecting the average wage statistic. I see "help wanted" signs on pretty much every store & restaurant I visit. OTOH, skilled labour varies by sector. Tech is in a bubble-deflation stage, so while we've had a good 15 years of easy job hopping, it's not so easy now.
- Ferret7446 3y ago> Most of us haven't seen it Well, that sounds rather useless then, doesn't it
- throwaway5959 3y agoLower inflation doesn’t mean prices fall, it means they go up slower.
- nytesky 3y agoThis is what everyone forgets. What’s worse is “inflation” showing maybe that wage growth catching up to prices maybe what is slowing. It takes some finesse to see what is really happening
- no_wizard 3y agoI'm saying prices aren't dropping and wages aren't keeping pace not as saying inflation isn't coming down but as a statement of observation. IE, the reality on the ground is prices are in fact, not falling (or falling enough) and wages aren't keeping pace with that fact, as an observation that these reports on inflation feel entirely meaningless to the challenges US citizens face economically right now.
- arcticbull 3y ago> I'm saying prices aren't dropping and wages aren't keeping pace not as saying inflation isn't coming down but as a statement of observation. IE, the reality on the ground is prices are in fact, not falling (or falling enough) and wages aren't keeping pace with that fact. But they are though. The median wage is now higher than Q4 2019 in both real and nominal terms. Real: https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q Nominal: https://fred.stlouisfed.org/series/LES1252881500Q https://fred.stlouisfed.org/series/LES1252881500Q Maybe this particular group isn't feeling it because there's been a lot of layoffs, and we're still swinging back from the 2021-2 over-hiring specifically in tech. But the for the median American this simply isn't true. The purchasing power of the median American wage has been on a broad up-trend since Q4 1997.
- littlestymaar 3y ago> IE, the reality on the ground is prices are in fact, not falling (or falling enough) But your expectations are misplaced, prices won't fall in any case. If the success you expect from a monetary policy is to see price failing, you'll remain disappointed forever. It's almost as if you complained that despite consecutive announcements in battery efficiency your laptop battery still isn't infinite. Wage are catching up, with overall CPI, but some goods have grown so high in prices it's going to be long before the purchasing power for then reach it's previous level.
- tivert 3y agoExactly. This will be hyped for political reasons, but it's too-little, too-late. I'm making less in real terms than a few years ago, and some regular things are starting to feel unaffordable.
- mulderc 3y agoSounds like you need a union.
- tivert 3y ago> Sounds like you need a union. Yes. Unfortunately, the tech industry has too many people who have been seduced by libertarian talking points and fail to realize they're not actually capitalists.
- mulderc 3y agoThroughout my career I have made the decision to take union jobs for less pay and it has paid off many time over by now. My retirement funding is solid, health insurance about as good as it gets for the US, student loans all paid off, working conditions are reasonable. Sure I get paid significantly less and don’t have a Tesla, but overall I’m pretty happy with my quality of life and have a hard time seeing how it could be much better. Thank you Union jobs!
- cruffle_duffle 3y agoI'm really not sure why the tech industry needs a union. Adding a giant layer of bureaucracy in between people would wreck the whole industry. Plus we get paid a shit-ton of money with perks not seen anywhere in any other industry. I'm really not sure where this push for unionising tech is coming from, but it feels really misguided.
- fragmede 3y agobecause open office floor plans suck and there aren't enough conference rooms to go around, and whining about it to each other isn't going to change that.
- mulderc 3y agoStrange, I’m very much on the other end. Inflation reporting feels extremely exaggerated to me. My wallet is doing just fine. I have also experienced disinflation recently where my morning coffee has gone down in price and I can now get it literally at my morning bus stop.
- bsimpson 3y agoYour coffee shop lowered prices?!
- mulderc 3y agoNew shop opened up that has oddly cheap prices for cold brew. My 12oz nitro cold brew is now $1.09. I am told this is just the normal price and they have no plans to change it.
- eric-hu 3y agoJust a nit, but disinflation is when inflation slows, but is still higher than before. Deflation is when prices go down.
- deleted 3y ago[deleted]
- beej71 3y agoI was about to make exactly this post. We have a WinCo grocery store in town that never got the inflation memo and prices there seem as cheap as always, unlike the Safeway which has, for some reason, exploded in cost. (Things that make you go hmmm.) Meanwhile I'm working 3/4 time (25% retired! Woo!) earning less than ever in an overpriced tourist town. And yet the bank accounts are doing just fine. Sure, gas is pricier, but not as pricey as it was at the peak, and not enough that I pay attention. But that's just me. My bicycle-commutin' self. One place I think is really hitting people, is real estate and rentals. I'm unaffected because I'm well into paying off this house that I got cheap after the bust at a tiny interest rate; the rental value of my home is about double the mortgage payment. We can't build houses quickly enough in this town--and we are doing it, with lots of new houses and apartment blocks going up everywhere. I think they get snatched up by families and investors immediately, something that would probably still keep happening even if we were building inventory 10x faster. (Why wouldn't you, an investor, buy everything we built?) And if you have a big rental or mortgage payment and (God help you) decide to shop at Safeway, you are certainly feeling it. Inflation could fall to 0% and people would still be feeling the pain of their housing prices. [Edit: thinko]
- ketchupdebugger 3y agowages not rising contributes to lower inflation. If prices fall, thats deflation, arguably worse than inflation. When prices fall, people stop buying in anticipation of prices falling further. When people dont buy, economy basically stops.
- WalterBright 3y ago> arguably worse than inflation. When prices fall, people stop buying in anticipation of prices falling further. When people dont buy, economy basically stops. The idea that 2% inflation is good for the economy, and deflation is bad smacks of the government selling the idea because increasing government spending via inflation is a way to raise taxes without raising taxes. As for deferring spending because prices will be lower in the future is not economically any different than deferring spending because you want the gains from investing the money. The economy doesn't collapse when people invest for the future, so I'm skeptical of that theory.
- ketchupdebugger 3y agoyou are not going to defer on everyday necessities, but you can defer on big item purchases. If you are in the market for an EV, and the report is that EV's are getting cheaper every year. You may just defer that purchase as long as you can. If you are in the market for a house and the report is that housing prices are increasing by 10% every year, you regret not buying that house yesterday.
- WalterBright 3y agoAnd yet if you invest the money, the EV gets cheaper for you every year.
- kldavis4 3y ago> The idea that 2% inflation is good for the economy, and deflation is bad smacks of the government selling the idea because increasing government spending via inflation is a way to raise taxes without raising taxes. I think the premise is that deflation is much much worse (and not amenable to the available controls that the Fed has available) and it is pretty impossible to reliably target < %2 inflation, so effectively the idea of "2% inflation" is the minimal possible amount of inflation.
- ThisIsMyAltAcct 3y agoReal wages have been growing faster than inflation since the beginning of last year. I think it will take a bit of time for everyone to feel the effects. https://www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/ https://www.statista.com/statistics/1351276/wage-growth-vs-i...
- 303uru 3y agoIt's so funny seeing tech worker anecdotes on here passed as fact. The FACT is that wages are rising for most Americans, you appear to be in an industry that hasn't see it. Regarding prices, I don't think you understand what reductions in inflation means, are you wanting negative inflation? These reports are meaningful for anyone interested in macro economics and not just "no_wisards" personal finances. Here in the real world; healthcare, manufacturing, education, retail, service is all seeing great wage increases and prices have stabilized.
- littlestymaar 3y ago> All I know is my wallet is thinner than ever and the reporting on inflation always feels out of touch. Prices aren’t dropping and wages aren’t rising to keep pace. It's not inflation figures that are out of touch, it's your understanding of them: inflation being low means the prices have (mostly) stopped increasing, not that they've declined back to where it was, this second option is never going happen.
- no_wizard 3y agoAgain, I'm not conflating how inflation works. I made a separate observation about why I feel they're out of touch with how they affect every day US citizens. Prices aren't falling, and wages aren't keeping up. That's an observation of the situation. Its not conflating the differences of inflation and deflation. I'm merely positing that all I know is, despite their efforts to reduce inflation and then trying to trumpet that as a win, we still have these issues, which monetary policy is failing to address meaningfully, but all the reporting has an out of touch tone to these realities. Its nice that prices are rising slower, but that isn't the only meaningful metric of economic indicators. Grinds my gears, I guess
- bsimpson 3y agoI don't understand how this is working. I'm originally from Nevada, but spent the first chapter of my adult life in San Francisco. I've been home for the past few months. Prices here are tantamount to what I grew accustomed to in SF, but I'm sure people here still make small ranch town wages. Coffee is $7. A meal is $20+. They used to be fractions of that, and that doesn't even touch the runup in real estate where crappy houses in nice areas can be $1MM+. A local sandwich shop has a flyer on the wall pleading with customers to understand that their cost of ingredients has grown astronomically in recent years. I legitimately don't understand how this is working for the people who have local incomes.
- supahfly_remix 3y agoout of curiosity, does the part of Nevada where you live receive a lot of tourists? Is it within driving distance of LA or the SF Bay Area?
- bsimpson 3y agoI'm from Carson City. It's between Reno and Tahoe, but on the other side of the mountains. It's not terribly popular for tourism, although Bay Area refugees have bid housing here up every time there's been a tech boom/pandemic/etc.
- supahfly_remix 3y agoMaybe the influx of newcomers and their income is driving inflation near you.
- tyjen 3y agoReal estate is insane. Land I was scouting in anticipation of buying to build a retirement home have become unaffordable. I'm talking increases of 300% in value between 2020 to today. The spike in value came out of nowhere, I honestly cannot explain it.
- tmaly 3y agoThey are gaslighting you. Every administration does it. It does not matter which political party they are. They play with the numbers to make themselves look better.
- npalli 3y agoReally? You feel the price increase from 2021-2023 seems the same as 2023-2024 to you. I see the prices have been elevated in the prior period ('21-'23) but they haven't moved much in the last few quarters. Perhaps everyone assumes prices will go back to 2021, for that we need deflation which is another ball of wax.
- TMWNN 3y ago>Prices aren’t dropping and wages aren’t rising to keep pace. That is the reality on the ground. These reports aren’t meaningful at all, and I don’t think the government is taking enough meaningful action to address issues of inequality that these things cause. "The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it". —Jeff Bezos <https://sports.yahoo.com/amazon-ceo-jeff-bezos-explains-212315127.html https://sports.yahoo.com/amazon-ceo-jeff-bezos-explains-2123...>
- 1vuio0pswjnm7 3y agoGenerally, prices that have gone up will not come down according to any policy-driven plan. If that was the plan presented to the public, then people would slow their spending and wait. And that would not be what the economists want.
- tedmcory77 3y agoThese are lies; they keep changing the basket of goods to not reflect the reality of what's included. FTFA: "Excluding food and energy"
- ketchupdebugger 3y agoaccording to https://www.bls.gov/cpi/ https://www.bls.gov/cpi/ For the past 12 months, energy actually was negative. While food at home rose 1.3%. These wouldn't contribute significantly to the overall numbers
- WalterBright 3y agoMy electric bill says otherwise.
- ketchupdebugger 3y agoa 2% change of your $100 bill is $2. you are not going to notice if your electric bill is $2 less.
- zeroonetwothree 3y agoI’ll definitely trust your sample size of 1 over the thousands they use for the calculation.
- sp332 3y agoI know it's unhelpful, but it's not new. "Core" inflation leaves those out because they change too rapidly to be useful as trend indicators.
- zeroonetwothree 3y agoThe top line CPI that gets reported usually isn’t the core one anyway. Generally core is preferred by the Fed so they can make long term money supply decisions without worrying about short term volatility. No one is saying that core reflects what consumers experience.
- Geisterde 3y ago"Inflation".
- GiorgioG 3y agoI am an independent voter and I've voted for both parties in the past...this sounds like a bunch of election-year pumping to me. Compared to many I have no room to complain, but I used to be able to put quite a of money aside prior to the pandemic, and now we're taking from those savings (and now that the kids are old enough to be left alone, my wife is working too!) I don't believe this happy horseshit for one minute.
- bryanlarsen 3y agoStated a different way, the 5 year inflation is almost 25%. Does that feel like horseshit?
- wakawaka28 3y agoIt feels like horse shit because the real number is like 50%. If/when they cut rates, price inflation will likely be about 15-20% per year.
- bryanlarsen 3y agoJust did a grocery run. The only thing up anywhere close to 50% was Coke, and even that's only up 40%. Bread was up 10%, and that's typical IME.
- wakawaka28 3y agoI think you either have a great grocery store near you or you didn't notice. Flour, sugar, eggs, meat, snacks, just about everything has gone up by 50% or more. Food in most restaurants has gone up too. Go look at https://shadowstats.com https://shadowstats.com if you want to see how the government cooks their inflation numbers.
- deleted 3y ago[deleted]