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CPI vs PPI, in case you’re curious like me … CPI tracks retail costs and the cost of living, whereas PPI tracks wholesale costs. As such, PPI acts as an early

by alberth 4mo ago

CPI vs PPI, in case you’re curious like me … CPI tracks retail costs and the cost of living, whereas PPI tracks wholesale costs. As such, PPI acts as an early indicator of future consumer inflation.

JumpCrisscross 4mo ago
More precisely, CPI tracks what you buy. Even if it’s imported. PPI tracks what’s produced here, even if for export. There is a fun Canadian paper on how they started intensely decoupling after 2001, alongside the rise of global multi-step supply chains [1]. [1] https://www.econstor.eu/bitstream/10419/261258/1/swp2022-05.pdf https://www.econstor.eu/bitstream/10419/261258/1/swp2022-05....
- sph 4mo ago
  Even more precisely, CPI tracks what someone has decided the average person would buy, and its basket of products is often tweaked to present more palatable numbers; it makes comparison of prices and inflation across years pretty much impossible. The real inflation value a person experiences is often much greater than the cooked CPI figures.
  - JumpCrisscross 4mo ago
    > its basket of products is often tweaked to present more palatable numbers This is a common conspiracy with scant evidence. The tweaks go in multiple directions and are better explained by the decoupling of PPI and CPI (due to longer and more-international supply chains) than conspiracy. > it makes comparison of prices and inflation across years pretty much impossible You can decompile the underlying statistics. Enterprises hire in-house economists to do this regularly. For consumers, I'd say this is pretty selly, as is relying on nonsense like ShadowStats. Comparing value across long periods of time is almost fundamentally a fool's errand. What's an iPhone worth to someone in 1950? Between zero and a commanding fraction of global GDP.
calvinmorrison 4mo ago
though I am seeing ( work with distributors ) a lot less reluctance to raise prices or adjust. It took a while but many of my customers can now more easily reprice their catalog and customers getting used to it, so maybe its less of a lag as before

by alberth 4mo ago

JumpCrisscross 4mo ago

More precisely, CPI tracks what you buy. Even if it’s imported. PPI tracks what’s produced here, even if for export. There is a fun Canadian paper on how they started intensely decoupling after 2001, alongside the rise of global multi-step supply chains [1]. [1] https://www.econstor.eu/bitstream/10419/261258/1/swp2022-05.pdf https://www.econstor.eu/bitstream/10419/261258/1/swp2022-05....

sph 4mo ago
Even more precisely, CPI tracks what someone has decided the average person would buy, and its basket of products is often tweaked to present more palatable numbers; it makes comparison of prices and inflation across years pretty much impossible. The real inflation value a person experiences is often much greater than the cooked CPI figures.
- JumpCrisscross 4mo ago
  > its basket of products is often tweaked to present more palatable numbers This is a common conspiracy with scant evidence. The tweaks go in multiple directions and are better explained by the decoupling of PPI and CPI (due to longer and more-international supply chains) than conspiracy. > it makes comparison of prices and inflation across years pretty much impossible You can decompile the underlying statistics. Enterprises hire in-house economists to do this regularly. For consumers, I'd say this is pretty selly, as is relying on nonsense like ShadowStats. Comparing value across long periods of time is almost fundamentally a fool's errand. What's an iPhone worth to someone in 1950? Between zero and a commanding fraction of global GDP.

calvinmorrison 4mo ago

though I am seeing ( work with distributors ) a lot less reluctance to raise prices or adjust. It took a while but many of my customers can now more easily reprice their catalog and customers getting used to it, so maybe its less of a lag as before