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The "free press" is reporting BLS data. And BLS produces a CPI number based on a formula to act as an indicator, not an absolute measure. People tend to react t

by tootie 3y ago

The "free press" is reporting BLS data. And BLS produces a CPI number based on a formula to act as an indicator, not an absolute measure. People tend to react to things they buy frequently which also happen to be the most volatile (food and fuel) and react less to things they actually spend most of their money on (shelter and transportation). CPI is a broad indicator and will never match the lived experiences of 350M individuals. Inflation can vary widely across a lot of dimensions including geography. Absolutely all of this data is available from the BLS. They only put CPI in headlines because it is meant to convey broad national trends in a bite-sized data point.

wakawaka28 3y ago
>People tend to react to things they buy frequently which also happen to be the most volatile (food and fuel) and react less to things they actually spend most of their money on (shelter and transportation). Are you suggesting housing prices haven't gone up similar to food prices? Because they have. House prices in many places went up 50% in the last few years and never went back down. People aren't imagining this inflation. It isn't 3%, that's for damn sure. It's at least 10% right now, and probably hit as high as 20% during the pandemic.
- tootie 3y ago
  I am not implying that. But house prices by their nature move more slowly. Even if new listing are more expensive, anyone in a long-term lease or an owner isn't subject to new prices. Or anyone who has exited the housing marker (ie moving in with parents) is not paying high prices.
  - wakawaka28 3y ago
    >But house prices by their nature move more slowly. They can and have moved very fast in the past few years. >Even if new listing are more expensive, anyone in a long-term lease or an owner isn't subject to new prices. Or anyone who has exited the housing marker (ie moving in with parents) is not paying high prices. That is a very short-term situation. Everyone who doesn't own a house needs to pay rent. And homeowners will eventually be faced with higher taxes as a result of inflated values, and they might not be able to cope. People who are forced to move in with parents aren't managing some epic life hack, they are trying to scrape by in the face of high prices. It seems like you're trying to make the argument "There is no inflation and even if there is, it doesn't matter." And I'm not buying it.
    - tootie 3y ago
      I am not making that argument at all. I'm explaining why the numbers are the numbers. And why the numbers don't capture how people perceive things. I should clarify that I mean the "prices people pay for housing move slowly" even if they prices of available housing move quickly for the reasons I mentioned above. And I don't think exiting the housing market is a life hack, I'm just saying it's happening. It's the kind of thing that would explicitly not be reflected in inflation indicators because no price is being paid but would be felt as a negative effect of inflation by people experiencing it.
      - wakawaka28 3y ago
        >I should clarify that I mean the "prices people pay for housing move slowly" even if they prices of available housing move quickly for the reasons I mentioned above. It's not right to count fixed prices in inflation figures. If you are locked into a lease or mortgage, you're not a market participant and any perceived non-increase in prices is tangential to the behavior of the money supply. But the government can't let a good excuse go to waste, which I explain below. >It's the kind of thing that would explicitly not be reflected in inflation indicators because no price is being paid but would be felt as a negative effect of inflation by people experiencing it. Actually, there is a very goofy methodology used to estimate housing costs in the official CPI called "owner's equivalent rent". Basically owners of housing are surveyed and asked how much their properties would rent for, which they obviously would tend to underestimate because they are actively out of the rental market in general. This is another reason CPI is a bad measure of inflation. There are many adjustments with plausible excuses, which cumulatively add up to a significant understatement of inflation numbers.

by tootie 3y ago

wakawaka28 3y ago

>People tend to react to things they buy frequently which also happen to be the most volatile (food and fuel) and react less to things they actually spend most of their money on (shelter and transportation). Are you suggesting housing prices haven't gone up similar to food prices? Because they have. House prices in many places went up 50% in the last few years and never went back down. People aren't imagining this inflation. It isn't 3%, that's for damn sure. It's at least 10% right now, and probably hit as high as 20% during the pandemic.

tootie 3y ago
I am not implying that. But house prices by their nature move more slowly. Even if new listing are more expensive, anyone in a long-term lease or an owner isn't subject to new prices. Or anyone who has exited the housing marker (ie moving in with parents) is not paying high prices.
- wakawaka28 3y ago
  >But house prices by their nature move more slowly. They can and have moved very fast in the past few years. >Even if new listing are more expensive, anyone in a long-term lease or an owner isn't subject to new prices. Or anyone who has exited the housing marker (ie moving in with parents) is not paying high prices. That is a very short-term situation. Everyone who doesn't own a house needs to pay rent. And homeowners will eventually be faced with higher taxes as a result of inflated values, and they might not be able to cope. People who are forced to move in with parents aren't managing some epic life hack, they are trying to scrape by in the face of high prices. It seems like you're trying to make the argument "There is no inflation and even if there is, it doesn't matter." And I'm not buying it.
  - tootie 3y ago
    I am not making that argument at all. I'm explaining why the numbers are the numbers. And why the numbers don't capture how people perceive things. I should clarify that I mean the "prices people pay for housing move slowly" even if they prices of available housing move quickly for the reasons I mentioned above. And I don't think exiting the housing market is a life hack, I'm just saying it's happening. It's the kind of thing that would explicitly not be reflected in inflation indicators because no price is being paid but would be felt as a negative effect of inflation by people experiencing it.
    - wakawaka28 3y ago
      >I should clarify that I mean the "prices people pay for housing move slowly" even if they prices of available housing move quickly for the reasons I mentioned above. It's not right to count fixed prices in inflation figures. If you are locked into a lease or mortgage, you're not a market participant and any perceived non-increase in prices is tangential to the behavior of the money supply. But the government can't let a good excuse go to waste, which I explain below. >It's the kind of thing that would explicitly not be reflected in inflation indicators because no price is being paid but would be felt as a negative effect of inflation by people experiencing it. Actually, there is a very goofy methodology used to estimate housing costs in the official CPI called "owner's equivalent rent". Basically owners of housing are surveyed and asked how much their properties would rent for, which they obviously would tend to underestimate because they are actively out of the rental market in general. This is another reason CPI is a bad measure of inflation. There are many adjustments with plausible excuses, which cumulatively add up to a significant understatement of inflation numbers.