[HN Gopher] Consumer prices increase 2.6 percent
___________________________________________________________________
Consumer prices increase 2.6 percent
Author : duck
Score : 96 points
Date : 2021-05-11 20:28 UTC (2 hours ago)
(HTM) web link (www.bls.gov)
(TXT) w3m dump (www.bls.gov)
| KETpXDDzR wrote:
| Perfectly related: The guide to inflation
| https://news.ycombinator.com/item?id=27099536
|
| We don't see any big CPI increase caused by quantitative easing.
| Wealthy people don't increase their food quality/need. I assume
| there's some effect of stimulus checks since most of them went to
| the 90% poorest Americans. Without, we'd might even see
| deflation.
|
| What I took from that article is that inflation, as so many
| things in economics, is however you define it.
|
| I wonder what the outcome of the growing split between poor and
| rich will be.
| thepasswordis wrote:
| In other news, the chocolate ration has been increased to 25
| grams! Great success!
|
| /s
|
| Anybody living in the world can tell you that consumer prices are
| up a lot, lot more than 2.6%. Look even at this very thread. Food
| prices are way up, lumber prices are way up, restaurant prices
| are way up, clothing costs are up. Lots of goods literally just
| seem unbuyable at this point. Even in my city (nowhere near the
| southeast) people are now lining up to buy gas, which is also at
| the highest price it has been in almost 8 years.
|
| Bullshit CPI is up 2.6%. Don't give me that propaganda number.
|
| God damnit stuff like that is so insulting. People, real actual
| human being are suffering right now. It's practically evil to put
| out obviously gaslighting bullshit statistics like this as if
| they're crazy to notice that literally everything in their life
| has gotten more expensive.
|
| "When a measure becomes a target, it ceases to be a good
| measure."
|
| Indeed.
| gruez wrote:
| >Anybody living in the world can tell you that consumer prices
| are up a lot, lot more than 2.6%. Look even at this very
| thread. Food prices are way up, lumber prices are way up,
| restaurant prices are way up, clothing costs are up.
|
| who knew that if you cherrypick from a list of items rather
| than using a broad basket, you can get arbitrarily higher/lower
| averages?
| [deleted]
| missedthecue wrote:
| What's less expensive right now than it was a year ago?
| chiefalchemist wrote:
| Yes and no. If these (e.g., food) are the things most people
| consume most of the time that's not cherry picking.
| Furthermore, consumer perception does matter. It does have
| impact - even if it's misperception.
|
| Gas is up. That's naturally going to increase cost of nearly
| everything that depends on that mode of transportation.
| Certainly, that's directly or indirectly just about
| everything.
| gruez wrote:
| All of that sounds like the availability heuristic in play.
| You buy groceries and fill up your car every week, but
| those two only make up 15.157% and 2.875% of the CPI
| respectively. If those went up 100% and everything stayed
| the same, you might conclude that inflation is 80-100%,
| even though the CPI would only be up 18%.
| Sparkle-san wrote:
| Oil is still under $70 a barrel though. It's gone up since
| being at some historical very low prices but compared to
| the times it's been north of $100, especially if you factor
| for 2021 dollars.
| cameldrv wrote:
| These are consumer prices though. Consumers don't buy
| barrels of crude oil. Meanwhile in the Bay Area, gas is
| $4.20/gal.
| throw0101a wrote:
| > _Food prices are way up, lumber prices are way up, restaurant
| prices are way up, clothing costs are up._
|
| As was predicted:
|
| > _So what's going to happen in the months ahead? We'll
| probably see a number of transitory price increases, not just
| because the economy is booming, but also because the lingering
| effects of the pandemic have produced some unusual disruptions
| -- for example, a global shortage of shipping containers._
|
| > _The question will be whether these price increases are a
| 2010-2011-type blip or something more dangerous. Smart
| observers will look past the headlines to measures of
| underlying inflation -- not just the Fed's standard "core"
| measure but things like the Atlanta Fed's sticky price index as
| well. Anecdotal evidence, otherwise known as "talking to
| people," will also be important: Are businesses actually
| starting to set prices and wages based on the expectation of
| high future inflation?_
|
| > _If they aren't -- and my bet is that they won't be -- then
| the lesson of 2010-2011 will remain: Don't panic._
|
| > _Now as then there are people eager to denounce government
| attempts to help the economy. And it's certainly possible that
| the American Rescue Plan will turn out, in retrospect, to have
| been too much of a good thing. But don't let the usual suspects
| seize on a few months' inflation data as evidence of looming
| disaster._
|
| * https://www.nytimes.com/2021/03/22/opinion/us-inflation-
| stim...
|
| * https://archive.is/Vxj5h
|
| I don't how old you are, but we went through the same thing ten
| years ago:
|
| > _Well, booming economies often run into temporary
| bottlenecks, which show up in surging prices for selected
| goods. For example, the price of copper tripled between
| December 2008 and February 2011, even though recovery from the
| 2008 recession was fairly sluggish._
|
| * https://www.nytimes.com/2021/05/06/opinion/us-inflation-
| fede...
|
| * https://archive.is/64iz2
|
| For a history of copper prices see:
|
| * https://fred.stlouisfed.org/series/PCOPPUSDM
|
| If you look up the inflation rate 2008-2011 you'll find it was
| nothing to write home about.
|
| Will it actually be a problem this time around? It certainly
| can, and people are concerned about it. They're paying
| attention to it. But we had 3% inflation in the 1990s and the
| world didn't end.
| [deleted]
| RachelF wrote:
| There's a lot of fiddling done on the numbers.
|
| One thing they do to keep CPI low is using "equivalent items".
|
| So if the iPhone 4 cost $500 ten years ago, and you can now buy
| an "equivalent" cheap Android from WalMart for $50 then they
| measure this as deflation.
| markus_zhang wrote:
| Well, they finally got what they wanted. Inflation, more
| inflation!
| vkou wrote:
| I think what they wanted is for the economy to not implode,
| with millions of people either dead to the virus, or newly
| homeless because they are broke.
| CameronNemo wrote:
| Then they should have built a better safety net. Monetary
| policy just leads to consumer or asset price inflation, and
| the legislature did a very poor job with fiscal stimulus when
| it was most necessary (early in the pandemic). They just
| wrote blank checks to businesses and people. They could have
| done so much more (expanded SNAP benefits or more incentives
| for first time homebuyers, for example). Instead wealth
| inequality is higher than it was before the stimulus.
| danhak wrote:
| Could you please expand on how keeping interest rates
| artificially depressed, causing the prices of homes to
| skyrocket, advances the goal of preventing homelessness?
| AnimalMuppet wrote:
| The price of homes skyrockets. The interest on loans
| craters. The monthly payments stay the same. This is
| because the demand curve on buying houses is sensitive to
| the monthly payment, not the total price. So it all evens
| out...
|
| ... until you need the down payment. _Then_ the higher
| prices /lower interest rates combo locks people out. It
| especially locks out first-time buyers.
| minhazm wrote:
| 2.6% is not particularly high. In Jan 2020 it was 2.5%, and in
| May 2018 to August 2018 it was a range of 2.7% to 2.9%.
| throw0101a wrote:
| And in the 1990s the US was regularly hitting 3%:
|
| * https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
| notyourday wrote:
| Anyone who has been to a supermarket in the last 12 months knows
| that the 2.6 percent increase in consumer prices is observably
| not true. I buy the same basket of the generic products ( chicken
| quarters, produce, beef, eggs, bacon, dairy products ) . Compared
| to this time in 2020 I'm spending at least 20% more. People who
| buy processed food(s) are spending at least 30% more.
| jrsj wrote:
| Somehow everyone seems has this experience, rents have
| continued to climb at a high rate for the last decade, and they
| manage to downplay this in statistics.
| chrischen wrote:
| Or maybe everyone who has been having this experience is
| posting about it, because otherwise there's nothing to post
| about.
| jonnycomputer wrote:
| this.
|
| presentation bias is everywhere.
| anotherman554 wrote:
| In 2011, my rent was $1,420 a month. In 2021 my rent is
| $1,610 a month. According to the published inflation numbers
| my rent has gone down because it should be $1,672 if
| accounting for inflation.
|
| I don't live in California-- maybe things are different
| there-- but I don't buy the conspiracy theories about
| inflation numbers.
| ModernMech wrote:
| In 2009 my rent was $550 in Pittsburgh. I just looked and
| today the same unit is going for $980, a 78% increase.
| According to published inflation numbers that should be a
| 23.5% increase to $679 today. So at least from our two
| examples we can see the effect is not evenly distributed.
| asquabventured wrote:
| The "basket of goods" they use to measure inflation is
| purposefully gamed to under represent purchases everyone
| makes weekly that are "volatile". But good news is that DVD
| players are cheaper than ever so inflation must be low!
| AnotherGoodName wrote:
| Fuel, which isn't purchased as often since the pandemic
| started has maintained its CPI weighting and has gone down
| dramatically however.
|
| Inflation is one of those things where if it's clearly
| stated as being extremely high can risk a lot of followon
| effects as everyone divests themselves of any direct
| monetary assets.
| drewcon wrote:
| Care to cite evidence of this conspiracy?
| drewcon wrote:
| Good thing CPI isn't calculated using anecdotal evidence from
| "anyone who has been to the supermarket".
|
| Learn more about the calculation here:
| https://www.bls.gov/news.release/archives/cpi_04132021.htm
| ardit33 wrote:
| CPI is rigged, as it doesn't account for many items that
| people spend money on
|
| If you think it is a fair indication, I have a bridge to sell
| to you
| drewcon wrote:
| CPI isn't "rigged". CPI measures exactly what it measures
| and measures it transparently.
|
| Whether you think it and it's constituent parts are good
| metric for measuring inflation is a different conversation.
| But that doesn't make it "rigged".
| [deleted]
| henriquez wrote:
| CPI is rigged in the sense that it is one attribute that
| status quo-apologists trot out to say "nothing to see
| here" when the real cost of goods is observably higher
| for all but the ultra-wealthy. "It's not hyperinflation,
| it's just that everything you conceivably want to buy is
| coincidentally much more expensive, because [reasons]."
| drewcon wrote:
| "The real cost of goods is observably higher"?
|
| I don't get how anecdotal evidence trumps repeatedly
| buying and measuring the cost of a vast cross section of
| products everyday people consume?
|
| Help me understand the conspiracy here? Who is doing the
| rigging and how?
| henriquez wrote:
| The Fed and U.S. government are rigging our economic
| system to backdoor tax the middle class while gaslighting
| all of us into thinking that this is normal.
|
| You don't print $10T and handwave away millennia of basic
| economic principles.
|
| Help me understand how CPI is _not_ a joke with respect
| to how it's used to say "this is normal."
|
| Everything I'm interested in spending money on, new hires
| for my company, real estate, cars, computer hardware,
| food, lumber, gas. All of this is coincidentally more
| expensive sometimes by a factor of more than 2x from two
| years ago? Nope, not buying it.
| drewcon wrote:
| But no one is "selling" you anything here. CPI is just
| data with a very public methodology. Some things go up,
| others go down. The Fed uses it as one input in decision
| making to manage inflation over long time horizons.
|
| You can look at what is measured in CPI and how it's
| measured. You can have a conversation about whether
| that's the most precise way to measure inflation etc. but
| just waving your hands about your "lived experience" and
| making allusions to a conspiratorial "they" doesn't pass
| for analysis.
|
| Show your work. What is the motive here for the "Fed and
| U.S. government are rigging our economic system to
| backdoor tax the middle class while gaslighting all of us
| into thinking that this is normal"? How do they do it?
| What's in it for them? I'm genuinely curious how you get
| there from looking at CPI.
| willcipriano wrote:
| But iPads are faster!
|
| https://www.reuters.com/article/us-usa-fed-dudley-ipad-
| idUST...
| Bancakes wrote:
| It's a fallacy to hand wave anecdotal evidence.
| midasuni wrote:
| Anecdotally I'm spending less than I was last year in every
| category.
| ardit33 wrote:
| Since I cook meat often, I kept track of the Trader Joe's meats
| from early 2020, to know
|
| Flank steak went from $8.99/lb to $12/lb NY Strip, from $10.99
| to $14.99 Fillet Mignon from $18.99 to $24.99
|
| Chick has gone up the same.
|
| For many food items, inflation is 10% - 15% or more
| splithalf wrote:
| Consider fake meat. A veggie burger used to cost a buck or
| so. Compare that to today's beyond beef which is almost
| beyond beef in price. Hedonic adjustments in everything.
| Erik816 wrote:
| The difference is that flank steak is still flank steak,
| while the veggie substitutes may have improved in quality
| over time.
| executive wrote:
| Just post the in-store prices and there will be an end to the
| horror.
| xendipity wrote:
| Read a bit more and you'll find
|
| > Prices for food at home increased 3.3 percent over the past
| 12 months. All six major grocery store food group prices
| advanced over the period, with increases ranging from 1.6
| percent (dairy and related products) to 5.4 percent (meats,
| poultry, fish, and eggs). Prices for food away from home rose
| 3.7 percent, as the 6.5-percent advance in prices for limited
| services meals was the largest 12-month increase since data
| were first collected in 1997.
|
| Doesn't quite fill your 20% claim, but 5.5% for meats and 6.5
| for limited services meals (places where you primarily order at
| the counter/drive-through/online) is quite the bump!
| missedthecue wrote:
| I think he is asserting that the CPI is manipulated to the
| downside. Posting CPI numbers is like quoting Bible verses to
| an atheist.
| chickenpotpie wrote:
| I'm going to believe the massive study over your single data
| point
| nostromo wrote:
| Both can be correct, and likely are.
|
| HN doesn't live in "America" - we live in a bunch of
| different cities with different economies.
|
| This is actually a key problem with the Fed's tools --
| they're national in scale. Inflation can be low in Acron, OH,
| but very high in San Francisco.
| koboll wrote:
| What a surprise that this comment thread is full of
| software developers in HCOL areas anecdotally seeing prices
| rise faster than the national average!
| notyourday wrote:
| Most of the population lives in the urban high cost of
| living areas.
| vkou wrote:
| On the other hand, anyone who's been trying to rent an
| apartment in a metro area for the last 12 months also knows
| that rent has dropped ~15-20%.
|
| I can't speak for you, but I pay a lot more for rent, than I do
| for groceries.
| notyourday wrote:
| That only happened if you managed to sign the lease during
| the dip. The rents started to appreciably drop last summer,
| this means that over the past 12 months only people whose
| leases expired between summer and now were able to lock in
| the savings. I, for example, was not that lucky. So I'm just
| not going to have a massive rent increase.
| minhazm wrote:
| That's a period of like 10+ months. Peak rental season is
| usually in the summer too. Most people who were on 12 month
| leases would have had an opportunity to sign a new lease in
| this time. Even if they didn't, it's not like rents have
| recovered, you can still get far cheaper rent in many areas
| and will likely continue to be able to do for the next few
| months at least.
| Mountain_Skies wrote:
| Where I live in the exurbs, rents are climbing and inventory
| is extremely low. But I wonder if that's going to change once
| the eviction moratoriums expire. People who can't pay a
| year's worth of deferred rent are going to have to move in
| with someone else as having a recent eviction makes it nearly
| impossible to rent again. That's going to mean less demand
| for a growing supply of rentals.
| koalaman wrote:
| Not in Montreal. Rents and house prices are up up to 50%
| since COVID started.
| fumar wrote:
| No idea why this is downvoted. Our groceries and staple
| household items have increased at least 10% over the last year.
| NationalPark wrote:
| Here's some interesting info on how they collect data:
| https://www.bls.gov/opub/hom/cpi/design.htm
| loosescrews wrote:
| While we are dealing in anecdotes, I buy mostly processed foods
| and I can only think of a single food item I regularly purchase
| that has seen a price increase, and that was small and due to a
| change in the grocery store's suppliers. In fact, I have been
| seeing more sales recently on items I would purchase anyway
| which I think has dropped my food costs a bit.
| cableshaft wrote:
| Processed/packaged food/goods has another trick where they
| give you less but it seems like the same amount, and charge
| you the same, so you don't notice it as much. I bet you a lot
| of those things you're buying you're actually getting less
| than you were 1-2 years ago. They reduce the number of toilet
| roll sheets by 30-40, or the ounces in the package go down
| 3-4 oz, or they give you 1 less hot dog.
|
| Here's a site that tracks the downsizing (I've also seen it
| called 'Shrinkflation'), and there are a lot of examples on
| the site. I'm sure you'll find something (probably multiple
| somethings) you buy on there that got downsized in the last
| year or two.
|
| https://www.mouseprint.org/category/downsiz/
|
| The top one on there shows they reduced Dorito's bags from 9
| 3/4 oz to 9 1/4 oz....sneaky sneaky!
| ellipsisfrog wrote:
| You are being downvoted but this is also my experience. My
| grocery bill is up more than 15% like for like (I shop
| exclusively online so it's easy to track) and more than that in
| total because of volume increases. My utility rates are up
| >10%. Housing costs are way up where I live. I would guess my
| overall baseline cost of living is up at least 10% when you
| remove the impact from lower commuting and eating out costs.
| dewlinedew2 wrote:
| Watch out for downsizing of the containers too
| nostromo wrote:
| Some non-CPI items like cars (new and used) and basic commodities
| like lumber have grown a lot more than 2.6%.
|
| Correction: CPI does include new and used car prices, after a lot
| of adjustments, at 3.7% and 2.5%, respectively. It's important to
| note though that the median cost of cars sold has grown much
| faster than the CPI car numbers. This is because the BLS tries to
| account for car quality, so even though you're paying much more
| for a car, they can say car prices "per value" are flat.
| snarf21 wrote:
| The government has perverse incentives to keep it low and close
| to the same. The way the CPI is calculated has changed dozes of
| times in the last 30 years. Like you said, if you at food,
| healthcare, education, etc., they are up _way_ more than 3%
| year over year.
| u320 wrote:
| > Like you said, if you at food, healthcare, education, etc.,
| they are up way more than 3% year over year.
|
| That's how averages work
| katmannthree wrote:
| The greater point is that the cost of essentials has
| skyrocketed but the effect is hidden in official inflation
| metrics because they include a large number of nonessential
| items such as utility-adjusted television prices.
| bcrosby95 wrote:
| Yeah, I can buy cheap 55 inch tvs for days. But my
| family's health insurance is still $36k/year (and
| regularly going up). I guess that can buy me about 75 55
| inch tvs though, maybe I should spend it on that instead.
| [deleted]
| rwcarlsen wrote:
| Yeah 2x4's are literally 4x what they were just over a year
| ago. And I couldn't find an architect to help me with my house
| this spring at any price.
| monksy wrote:
| About those prices:
| https://www.youtube.com/watch?v=Ei14ks5ggGo
|
| That explains what's going on.
| nostromo wrote:
| Lumber is so expensive now, I fear it's going to worsen the
| housing shortage and increase the cost of existing homes.
|
| I know a small developer trying to build townhouses and he's
| unable to source the lumber needed at any price.
| lumost wrote:
| why is Lumber expensive? the only rationale I could think
| of is that housing construction has spiked due to low
| interest rates.
| aeternum wrote:
| The issue is just a bottleneck at the sawmills, likely due
| to labor shortage or covid restrictions.
|
| There's still an oversupply of trees, and (unfortunately)
| tree farmers have not seen any increase in price for the
| raw lumber.
|
| Similar things happened with the meat processing plants and
| food/vegetable packaging.
| blsapologist42 wrote:
| Cars are included in the CPI. Don't spread FUD.
|
| https://www.bls.gov/cpi/factsheets/new-vehicles.htm
| [deleted]
| zaptheimpaler wrote:
| https://www.epsilontheory.com/im-trying-to-understand-
| hedoni...
|
| "A Honda Accord cost $12,000 in 1990 and it costs $25,000
| now.
|
| A Mustang was $9,000 and now it's $27,000.
|
| The BLS has new car prices close to unchanged over the past
| 30 years."
|
| Whatever you think of the validity of "hedonic adjustments",
| this is certainly not what I would expect when BLS reports
| car prices as unchanged during that period.
| namdnay wrote:
| I'd be wary of comparing models across such a long time
| period, car makers have a habit of gradually drifting up
| each model (because it's hard to release a smaller/simpler
| model than the preceding one)
|
| To take a European example, a 1990s VW golf is smaller and
| slower than a 2020 polo.
| ensignavenger wrote:
| The Honda Accord of 1990 is a different class of vehicle
| than the Honda Accord of 2021. In 2021, there are other
| entry level vehicles that can be purchased for much less
| than an Accord.
| [deleted]
| MontyCarloHall wrote:
| Indeed. A 2021 Accord is far superior to a 1990 Rolls
| Royce or other ultraluxury car in terms of amenities,
| engine power, quietness, build quality, etc.
|
| That's not even mentioning the leaps and bounds in
| efficiency and safety. I'd argue cars have gotten
| effectively cheaper over the years, as they've
| dramatically improved in every respect. If you could
| still buy a 1990 Accord manufactured today, it would
| probably sell for a couple thousand dollars.
|
| Edit: as for the Mustang example in the grandparent post,
| that $27,000 Mustang of today outperforms entry-level
| Ferraris of 1990. A fully-spec'd $80,000 Mustang of today
| would outperform every Ferrari from 1990, including the
| F40, which sold for $400,000 in 1990 dollars (~$800k in
| today's dollars).
|
| So if anything, the CPI doesn't implement hedonic
| adjustments _enough_ for cars.
| ragnese wrote:
| Tangentially, wouldn't it be nice if we _could_ buy a
| 1990-quality car for the inflation-adjusted price?
| Poor(ish) people would have a decent shot at actually
| affording reliable transportation and climbing up the
| ladder.
| MontyCarloHall wrote:
| With the exception of a few brands (e.g. Honda, Toyota),
| I'm not sure the dismal mechanical quality of many
| 1990-quality cars would save people money versus buying a
| 10 year old used car for the same money.
|
| Remember, 1990 is still the era of the 5 digit odometer.
| Cars have gotten hugely more reliable over the years. A
| 2010 car hitting 200k miles is routine and expected; a
| 1990 car hitting 200k miles would be exceptional.
|
| Also, no 1990 car would pass modern safety standards. Few
| would pass emission standards. A big reason for the
| increase in engine performance (and thus complexity/cost)
| is due to the weight of all the safety equipment that's
| required today.
| ensignavenger wrote:
| That wasn't exactly what I meant, but it is true.
| _dps wrote:
| I think a very large number of people (myself included)
| would rather drive a 1990 Rolls Royce than a 2021 Accord,
| all else equal. I drove a 1990 BMW well into 2010 and I
| would very certainly take that car (in new condition)
| over a 2021 Accord today.
| 542458 wrote:
| "Car prices are not evaluated in a way I agree with" is a
| very different argument from "Cars prices aren't evaluated
| at all".
| ahahahahah wrote:
| Whatever you think of the validity of "hedonic adjustments"
| doesn't really matter as far as cars are concerned because
| the BLS doesn't apply hedonic adjustments to car prices.
| MontyCarloHall wrote:
| Yes they do: https://www.bls.gov/cpi/quality-
| adjustment/new-vehicles.pdf
| gruez wrote:
| that says quality adjustments, not hedonic adjustments.
| MontyCarloHall wrote:
| Aren't "quality adjustments" by definition "hedonic
| adjustments"? How are these not hedonic adjustments? From
| the linked PDF:
|
| "BLS adjusts for structural and engineering quality
| changes such as:
|
| * Changes that affect the safety of occupants of the
| vehicle as mandated by legislated federal or state
| standards, and for purposes of IPP export items,
| applicable foreign market standards. Changes in safety
| features not required by legislated standards will be
| evaluated on a case-by-case basis.
|
| * Changes in mechanical or electrical features that
| affect the overall operation or efficiency of the
| vehicle, or the ability of a component to perform its
| function, such as changes affecting steering, braking,
| stability, engine horsepower, traction control,
| transmission, battery life, and fuel systems and/or
| electrical systems.
|
| * Changes in design or materials that affect the length
| of service, durability, need for repairs, or strength or
| performance of the item, such as stronger bumpers, HID
| headlamps, flexible body panels, platinum-tipped spark
| plugs, or warranty changes.
|
| * Changes that affect comfort or convenience, if
| supported by evidence of a functional or software
| improvement, such as redesigned seat belts, remote door
| locks, theft deterrent systems, navigation and
| communication systems, satellite radio hardware, drive
| assist systems, backup cameras, sensors or changes in
| storage capacity."
| mcguire wrote:
| " _Quality adjustments are based on costs provided by
| manufacturers in categories such as reliability,
| durability, safety, fuel economy, maneuverability, speed,
| acceleration /deceleration, carrying capacity, and comfort
| or convenience. Adjustments are also made when equipment is
| added or deleted from the tracked model. Adjustments are
| not made for changes in gasoline content due to mandated
| air quality requirements. Additional information is
| available in the Guidelines for Quality Adjustment of New
| Vehicles Prices document._"
| (https://www.bls.gov/cpi/factsheets/new-vehicles.htm)
|
| The Guidelines for Quality Adjustment of New Vehicle Prices
| are at https://www.bls.gov/cpi/quality-adjustment/new-
| vehicles.pdf.
|
| New Vehicle CPI has increased 22% since 1990
| (https://data.bls.gov/pdq/SurveyOutputServlet).
| nly wrote:
| Cars, like homes, live in a debt market. I can't speak for
| the US but here in the UK more than 90% of new, private car
| registrations are supported by purchases made on
| finance[0].
|
| High car and house prices are what you get when you have
| unprecedented close-to-zero interest rates for this long.
|
| Prices = f(interest rates, affordability)
|
| [0] https://www.fla.org.uk/media/facts-and-figures/
| stretchwithme wrote:
| If by FUD you mean doubt in the validity of government
| statistics, you are correct.
|
| But deceptive things should be doubted.
| a-posteriori wrote:
| Why is questioning the CPI methodology FUD?
| fanciestManimal wrote:
| The claim was incorrect. They are included. That's
| fundamentally different than claiming some kind of issue
| with how this information is calculated for cars.
| prichino wrote:
| The inflation has been tampered with quite a bit over the
| years. It's how you explain how the avg American is much poorer
| than his parents. I.e. in real terms, as in being able to buy:
| quality food, quality car, quality house (what? renting? no,
| not the same)
|
| I like this website as it uses the older methodology which has
| been twice updated it seems:
| http://www.shadowstats.com/alternate_data/inflation-charts
| sbelskie wrote:
| If those numbers were right coffee would be $25 a cup. I can
| understand thinking CPI understates things, but the math for
| average inflation of 6-10% for decades just doesn't add up.
| gruez wrote:
| Not to mention that 6-10% inflation combined with 2-3% GDP
| growth would mean the economy is contracting by 3-5%.
| gruez wrote:
| >quality car
|
| Ironic considering that the reason cars have gotten more
| expensive was because their quality increased.
|
| >quality house
|
| They've gotten bigger over the decades, better equipped, and
| the monthly payments have actually gone down
|
| https://awealthofcommonsense.com/2021/03/what-if-housing-
| pri...
| mythrwy wrote:
| There are alternative (non governmental) calculations that put
| the increase much higher (if the 1990 calculation method was
| still used).
|
| http://www.shadowstats.com/alternate_data
| 542458 wrote:
| Then why does GDP-deflator calculated inflation give
| essentially the same numbers as CPI inflation (and therefore
| different numbers than these folks)?
| throwawaysea wrote:
| Note that Warren Buffet recently noted that his companies are
| seeing consistent increases in prices throughout the supply chain
| and will in turn need to raise prices:
| https://www.cnbc.com/2021/05/03/warren-buffett-says-berkshir...
|
| Others are taking the risks of inflation much further. Stanley
| Druckenmiller noted that the current spending policy and fiscal
| policy of the US is threatening the Dollar's status as the
| world's reserve currency:
| https://www.cnbc.com/2021/05/11/stanley-druckenmiller-says-t...
| throw0101a wrote:
| > _Note that Warren Buffet recently noted that his companies
| are seeing consistent increases in prices throughout the supply
| chain and will in turn need to raise prices:_
|
| This is a known phenomenon:
|
| > _Imagine an economy in which everyone expects inflation to be
| high for the foreseeable future (Americans of a certain age
| don't have to imagine this; for a while, we lived in that
| economy). In such an economy, a company setting its prices for
| the next year will do so taking into account the likelihood
| that everyone else's prices -- the prices charged by
| competitors, the costs of raw materials, the wages offered by
| rival employers -- will be going up over time._
|
| > _Reflecting this expectation, companies will mark prices up
| relative to what they would have been if they didn't expect
| future inflation -- and by so doing, will feed the very
| inflation they fear. In other words, once expectations of
| sustained inflation are embedded in the economy, inflation
| becomes self-perpetuating -- and bringing it down can be
| extremely difficult. That's what makes stagflation -- inflation
| despite high unemployment -- possible._
|
| > _The point, however, is that short-term fluctuations in
| volatile prices tell us little about whether stagflation is
| becoming a risk. That's why Fed policy generally ignores the
| headline inflation rate and instead focuses on a measure that
| excludes food and energy prices._
|
| > _So what's going to happen in the months ahead? We'll
| probably see a number of transitory price increases, not just
| because the economy is booming, but also because the lingering
| effects of the pandemic have produced some unusual disruptions
| -- for example, a global shortage of shipping containers._
|
| * https://www.nytimes.com/2021/03/22/opinion/us-inflation-
| stim...
|
| * https://archive.is/Vxj5h
|
| It can become dangerous (see 1970s), but economists have a
| decent understanding of it nowadays, and so can be factored
| into decision making.
| hourislate wrote:
| They are doing everything they can to inflate. They have
| basically spent over 20 trillion in the last 2 decades fighting
| deflation and have little to show for it. The reckoning is coming
| and there is nothing they can do to stop it. Over half of
| employable Americans will be without work, corporations will
| require less and less people. Every industry and every corner of
| the economy will feel it. We are probably no more than a decade
| or two away from chaos if the Government doesn't take steps now
| to address the issue that Technology is eating the world.
| whatever1 wrote:
| Is it really inflation or higher prices due to higher than normal
| demand? When the demand goes up the market clearing prices
| naturally increase (until more efficient suppliers join the game)
| ajmurmann wrote:
| Higher prices due to demand outpacing supply is one of the
| three types of inflation. The other two being based on cost of
| production increasing and build-in (everyone expects it, so it
| becomes true).
| PEJOE wrote:
| Yes, if prices relax, then we will see the deflation reflected
| in the numbers.
|
| A shift of both demand and supply, resulting in increased
| prices, is one way inflation can happen.
|
| What is important in CPI inflation are the prices consumers
| pay.
|
| How that fits into bigger picture money supply * money velocity
| is a different conversation
| frankbreetz wrote:
| This seems inline with what the fed wanted/expected. They are
| considering this transitionairy inflation, which is temporary, so
| don't expect this to affect borrowing rates or bond buying. At
| least not yet.
| a-posteriori wrote:
| Is the inflation rate transitory or is the price level
| fluctuation transitory? Makes a big difference...
| DylanBohlender wrote:
| The inflation rate is transitory. Price levels won't come
| back down unless we get transitory deflation of equal (or
| greater) magnitude.
| enos_feedler wrote:
| Which will happen because people will stop wanting things
| sonium wrote:
| Looking at the chart 2.6 percent seem quite average, so what's
| the big news?
| JohnJamesRambo wrote:
| Well the prices I see around me are up a lot more than 2.6%.
|
| My latest sticker shock was at Lowe's.-
|
| https://imgur.com/a/9UoXNdk
| nkozyra wrote:
| The Anecdotal Price Index is historically less accurate than
| CPI.
| JohnJamesRambo wrote:
| Or has the CPI been fudging the numbers for a very long
| time?
|
| https://www.forbes.com/sites/perianneboring/2014/02/03/if-
| yo... with-the-cpi/
|
| And this article is 7 years old, I can't imagine Perianne's
| reaction to the current M2 money supply of 20 trillion,
| almost double the 10 trillion when she wrote it in 2014.
|
| https://fred.stlouisfed.org/series/M2SL
|
| Seems like yet another example of Goodhart's Law. "When a
| measure becomes a target, it ceases to be a good measure."
|
| I own many homes, I see their value go up much more than
| 2.6%. Yes anecdotal but it is very obvious to anyone that
| has tried to buy anything recently.
| throw0101a wrote:
| > https://fred.stlouisfed.org/series/M2SL
|
| And velocity ( _V_ ) has dropped off a cliff:
|
| * https://fred.stlouisfed.org/series/M2V
|
| * https://en.wikipedia.org/wiki/Money_supply#Link_with_in
| flati...
| prichino wrote:
| Oh lookie, someone has been calculating the numbers using
| the old methodology. We are much poorer than we thought.
|
| http://www.shadowstats.com/alternate_data/inflation-
| charts
| throw0101a wrote:
| > _Oh lookie, someone has been calculating the numbers
| using the old methodology._
|
| They have been doing no such thing. They have not put any
| effort into "calculating" anything. They simply take the
| official BLS and add a constant. They say so themselves:
|
| > _Responding to prior criticisms made by economist James
| Hamilton, John Williams explained in a private phone call
| that Shadowstats does not actually recalculate BLS data,
| rather, the Shadowstats CPI merely adds a constant to the
| officially reported numbers.[25]_
|
| * https://en.wikipedia.org/wiki/Shadowstats.com
|
| The number at that site will always be higher than the
| BLS number because the people who run that site think it
| should be higher. They publish no methodology to recreate
| their number. Whereas if you want to look at what BLS is
| doing you can download code:
|
| *
| https://en.wikipedia.org/wiki/MIT_Billion_Prices_project
|
| Also, the official Shadowstats.com report costs $175
| today (2021-05-11). However:
|
| > _Shadowstats doesn't come cheap: currently, an annual
| subscription costs $175._
|
| > _Six years ago, an annual subscription cost ... $175._
|
| * https://krugman.blogs.nytimes.com/2012/08/25/another-
| alterna...
| [deleted]
| Der_Einzige wrote:
| Construction related stuff is way up right now everywhere due
| to the housing / renovation boom.
| ksdale wrote:
| Just this morning, I read this newsletter about lumber
| prices that seems to provide a very plausible explanation
| -https://constructionphysics.substack.com/p/lumber-price-
| faq
| throwawaysea wrote:
| The housing boom is itself an effect of the current fiscal
| policy. Housing also tends to attract investment when
| inflation is happening.
| throw0101a wrote:
| > https://imgur.com/a/9UoXNdk
|
| While amusing anecdata, your picture of a copper cable price
| is an indication of not much:
|
| > _Well, booming economies often run into temporary
| bottlenecks, which show up in surging prices for selected
| goods. For example, the price of copper tripled between
| December 2008 and February 2011, even though recovery from
| the 2008 recession was fairly sluggish._
|
| * https://www.nytimes.com/2021/05/06/opinion/us-inflation-
| fede...
|
| * https://archive.is/64iz2
|
| For a history of copper prices see:
|
| * https://fred.stlouisfed.org/series/PCOPPUSDM
|
| If you look up the inflation rate 2008-2011 you'll find it
| was nothing to write home about.
| dhritzkiv wrote:
| For anyone else wondering, like I was, this is a photo of
| copper wiring. I'm guessing thick gauge (6AWG) for dealing
| with high amperage. Not sure what the /3 signifies.
| MikeAmelung wrote:
| It's 3 individual 6 gauge conductors in a single outer
| sheath.
| blhack wrote:
| Most commonly referred to as "romex". It's what is in the
| wall of your house (most likely).
| novalis78 wrote:
| It does make for a somber website visit, when one frequents the
| Chapwood Index and starts contemplating about all of it including
| the consequences for the poorest of the poor, who are trapped:
| https://www.reddit.com/r/PersonalFinanceCanada/comments/kr1k...
| (the original site seems to be down at the moment)
| ajmurmann wrote:
| Doesn't inflation affect wealthy people more, since any cash
| they have would go down in value? If it's true inflation income
| should go up with it.
| AnimalMuppet wrote:
| Income goes up _after_ it. Inflation hits, and then _later_
| your income goes up. That hurts. The closer you are to the
| edge, the more it hurts.
| ffdhghggg wrote:
| Wealthy people do not own much cash. Wealthy people own
| assets. The poor also do not have much cash, they consume
| goods to live.
|
| Inflation increases the value of assets relative to
| consumption. Inflation increases the gap between the wealthy
| and the poor.
|
| Deflation reduces the value of assets and makes consumption
| more affordable. Deflation reduces the gap between the
| wealthy and the poor.
| SubiculumCode wrote:
| Looks like inflation is pretty average for historical March, a
| success considering what our economy could have looked like.
| u320 wrote:
| This is the numbers for March. What's the point of posting a
| month old news? Especially as new numbers are posted tomorrow.
| sbelskie wrote:
| Yea this is confusing. I thought it was maybe published
| accidentally a day early but this is just last months stuff.
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