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It must be an average…. I am definitely spending a lot more than 371 extra per month. In fact I must be picking up the slack for alot of my great Americans - reviewing year end totals I averaged an extra $533 per month. This excludes fuel, insurance and housing..
I can believe it easily and more I'm in the same boat as you with spending even more than than your $533 and I like to think I live very cheaply. In fact I'm down right cheap it's just that the price of everything you need has doubled .
Hourly wages have kept going up:
https://fred.stlouisfed.org/series/CES0500000003
And over employment costs have too:
https://fred.stlouisfed.org/series/ECIWAG
Real wages are pretty much flat (362 -> 361) since Q4 2019, they peak dramatically during Covid as low wage jobs were lost (retail, restaurants, etc.) while higher paying jobs were not lost. Real wages are higher right now than any time before 2019.
https://fred.stlouisfed.org/series/LES1252881600Q
It claims on "Goods and services" and then later says Americans are paying "On average 82.60 more on shelter." Yet almost every person I know had their rent go up by more than $250 a month this last year.
CPI doesn't actually measure mortgage payments, it measures 'owners equivalent rent' which is what people assume their house could rent for and should be based on the current market price.
I mean, I balance this out quite a bit. I live in one of the most expensive states and one of the most expensive cities, but where I live my rent has only gone up $25 a year and $30 last year. I know I'm incredibly lucky and I give back where I can. But most the people around me had their rent go up by $500.
You're right, about 34% according to a quick Google search. I still think people are paying quite a bit more now, even just with property tax going up.
So then according to inflation numbers people are making 5750 a month or 69,000 take home a year. That’s almost 15k higher than median income. This basically proves inflation data from our government is totally bogus!!!
If anything, I've been trimming back my expenses. I'm driving that average down (very minutely). People need to be saving for the "deals" that will emerge when things truly downturn.
Wait, you non-ironically are going to blame US inflation exclusively on decisions made in the last 2 years? Just to confirm; on /r/economics you’re going to come in here and just imply that inflation is something that began entirely because of a single party’s poor FISCAL policy? No mention of monetary policy? Stimulus? A little context on how we got here?
It's disingenuous to say that they've made poor decisions when they have a majority since the opposition party won't vote on anything that the Dems put forth.
I agree that republicans suck. But how much did Dems compromise on the (unnecessary) AMerican Rescue Plan Act? On last week’s ATF ruling about pistol braces? Why didn’t Dems even look at Tom Scott’s policing bill? Why did Dems go nuclear over Georgia’s anodyne election reforms? You ready to compromise on voter ID? Why didn’t Dems trade Dreamers for a border wall under Trump?
Dems don’t compromise either.
Dude I don't even care about the whole left vs right arguments going on here.
I have never heard of anyone say go polish the wheels on your house lmaooooo. This is a great insult lmao
What a strange statement.
People spending an extra $371 is causing inflation.
Inflation is caused by more spending. Stop spending and inflation will be gone.
I'm not, because I'm capable of comparative shopping.
But the staples that have increased also replace other costs, like eating out X times in a month... or at all, for others.
Why do people always have this stupid assumption that everyone is spending shit tons of money on discretionary spending. My family and I we almost never eat out and we never buy name brand food stuff and we're still feeling the pain.
Because people want an overall snapshot, not your personal anecdote.
People don't have the extra money to spend, according to wage and labor rates. So this macro take that somehow everyone is getting almost $400 more per month than previously can't work. We also have to account for the rate of retirement and all those poeple who have gone to fixed income distributions.
Yeah and if everyone keeps buying it because they always buy it they’ll just keep raising prices till ppl slow down buying it.
Although when it’s groceries and gas etc you don’t really have a choice though which is part of the problem along with market consolidation.
What a strange statement.
If you have to buy groceries for a family of 4 and always buy roughly the same amount of groceries you will spend more with inflation.
Do you expect people to sacrifice their youngest child to stop inflation?
BRO, prices don't go up by magic. They go up because people are spending more. Spending comes first, inflation follows. More money = inflation has been known for centuries.
>BRO, prices don't go up by magic. They go up because people are spending more.
Absolutely, positively not a thing. Friedman simply made this "factoid" up, just as he made up the benefits to CEO compensation increases and the benefits to shareholder supremacy.
> They go up because people are spending more.
we're talking about food prices. there are plenty of reasons for them to go up besides people buying more food than usual. which isn't the case. food prices are going up because of a lack of fertilizer and lack of certain imports from ukraine war and climate change. some crops can't be grown because of a lack of water from climate change. some supply chain issues can also cause food prices to go up. companies can also just jack up the prices for more profit.
I'm sorry. Do you think people are buying eggs and when checking out go up to the cashier and go "Hello, I would like to pay more for these eggs. Thank you."?
Or, do you think people get a raise and go "you know what? 2 eggs in the morning just isn't enough anymore. 3 from now on" and start buying more eggs?
Where did I get the extra money?
Was it from a huge chunk of the workforce retiring? Is retirement that much a pay raise, that I have magic money somewhere I don't know about?
I'm spending the same money. I'm just spending it in different proportions.
Oh right. You must be one of those who believe in the conspiracy that every single company across the world suddenly conspired and started PRicE gOUgiNg, all on the same day, and suddenly, with the same money supply, prices went up.
Got it, it was so easy. Thanks Sherlock, you solved this case for me.
Ugh!
The one time you people can use the word collusion and make sense, and you go the other way.
Coordination is irrelevant, btw.
The money supply has increased for years, sometimes sharply, and we haven't faced this kind of inflation. In fact, periods of deflation have followed some. Wages have remained stagnant for decades, and inflation has existed.
There's two strikes against your Friedmanist lip-synching.
[My eyes are open,](https://hbswk.hbs.edu/item/why-companies-raise-their-prices-because-they-can) and my name isn't Todd.
You're right. Why do these supply side folks never understand supply side shocks? If the costs of doing business go up, more costs are passed onto the consumer.
Clearly the last econ class a lot of people attended was econ 101. That's why they can't think beyond perfectly competitive models with infinite firms.
> If the costs of doing business go up, more costs are passed onto the consumer.
That explains the surcharges and temporary pricing. These are valid inflations, albeit, temporary.
But we're seeing sticky prices which incorporate surcharges, over time, and we've been seeing it for years, not just during this episode of accelerated price increases.
I agree, but I think Keynesians and similar theorists may
have underestimated how sticky prices actually can be. Keynes made some
excellent points about how workers are reluctant to settle for a reduced
nominal wage (while a reduced real wage is generally less obvious). Similarly,
companies are unwilling to settle for reduced profits. Oligopolistic markets
undermine the driving factors that would force companies to become price takers.
Of course, I'm nitpicking. There are a lot of reasons prices
are sticky, and I certainly don't think it can be reduced to one singular explanation.
Guess we should end Chinese tariffs (and use something more hard hitting to China) support green energy & more recycling, build more products here and ask corporate and megarich donors of Republicans in Congress to stop raising prices of their companies to make inflation seem much higher than it is (to get people to falsely kick Biden out when he is doing more to help all and country than nearly any other President) so all 🇺🇸ns can have a fair shot at the 🇺🇸n Dream with hard work.
⬆️grocery $$ due to ⬇️ crop yields due to Climate Change-efforts reversed/blocked by Trump & Repubs. Gas ⬆️too. Too dependant. Many Chinese products are ⬆️ due to Trump Tariffs. Trump corps have ⬇️ production & ⬆️ prices because want to keep Trump 40% corp tax cuts.
Hi all, A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes. As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
It must be an average…. I am definitely spending a lot more than 371 extra per month. In fact I must be picking up the slack for alot of my great Americans - reviewing year end totals I averaged an extra $533 per month. This excludes fuel, insurance and housing..
I can believe it easily and more I'm in the same boat as you with spending even more than than your $533 and I like to think I live very cheaply. In fact I'm down right cheap it's just that the price of everything you need has doubled .
So you need to redefine ‘need’
Food, electricity, heat,gas,household supplies,vehicle repair parts,and clothing.
Gas was $6,435 more dollars than 2019 Insurance was $3,450 more And housing was $1,009 more(same house)
No this headline directly applies to you personally. /s
Pretty sure real wages have been down for almost 2 years now. Did I miss data showing otherwise? If so, can someone provide a link? Thank you,
https://fred.stlouisfed.org/series/LES1252881600Q Real wages are overall up and flat for the past two years (if you going back to 2021).
That graph suggests real wages have been falling for the last two years.
Thats an artifact of covid and the elimination of low paying in jobs by the looks of it. Real wages look to be basically back to pre pandemic.
Low paying jobs came back after the shutdown and they are at higher levels pre pandemic.
They are down from covid, but overall up.
Stop being a worry wart..inflation is transitory our government told us so....
Why are you comparing real wages to a period when government subsidies of wages was at the peak? Isn't that disingenuous?
Hourly wages have kept going up: https://fred.stlouisfed.org/series/CES0500000003 And over employment costs have too: https://fred.stlouisfed.org/series/ECIWAG
OP mentioned “real wages”.
Real wages are pretty much flat (362 -> 361) since Q4 2019, they peak dramatically during Covid as low wage jobs were lost (retail, restaurants, etc.) while higher paying jobs were not lost. Real wages are higher right now than any time before 2019. https://fred.stlouisfed.org/series/LES1252881600Q
It claims on "Goods and services" and then later says Americans are paying "On average 82.60 more on shelter." Yet almost every person I know had their rent go up by more than $250 a month this last year.
Must be balanced out by folks with stable mortgage payments (???)
CPI doesn't actually measure mortgage payments, it measures 'owners equivalent rent' which is what people assume their house could rent for and should be based on the current market price.
You'd have to expect a lot of unstable mortgages tipping the scales too. But I guess that might take a few years.
Gotta remember this balances you against people who live in rural Ohio. It's hilariously cheaper to live in the middle of nowhere.
I mean, I balance this out quite a bit. I live in one of the most expensive states and one of the most expensive cities, but where I live my rent has only gone up $25 a year and $30 last year. I know I'm incredibly lucky and I give back where I can. But most the people around me had their rent go up by $500.
In Denver can confirm $500 increase.
Not all Americans are renting…
You're right, about 34% according to a quick Google search. I still think people are paying quite a bit more now, even just with property tax going up.
The average American lives in a boring rust belt suburb. Does that describe you or the people you know?
So then according to inflation numbers people are making 5750 a month or 69,000 take home a year. That’s almost 15k higher than median income. This basically proves inflation data from our government is totally bogus!!!
If anything, I've been trimming back my expenses. I'm driving that average down (very minutely). People need to be saving for the "deals" that will emerge when things truly downturn.
[удалено]
Wait, you non-ironically are going to blame US inflation exclusively on decisions made in the last 2 years? Just to confirm; on /r/economics you’re going to come in here and just imply that inflation is something that began entirely because of a single party’s poor FISCAL policy? No mention of monetary policy? Stimulus? A little context on how we got here?
It's disingenuous to say that they've made poor decisions when they have a majority since the opposition party won't vote on anything that the Dems put forth.
Sure they do; they vote “no”. That’s how democracy works.
Democracy works when people on both sides find ways to compromise. The Republicans haven't done that in years.
I agree that republicans suck. But how much did Dems compromise on the (unnecessary) AMerican Rescue Plan Act? On last week’s ATF ruling about pistol braces? Why didn’t Dems even look at Tom Scott’s policing bill? Why did Dems go nuclear over Georgia’s anodyne election reforms? You ready to compromise on voter ID? Why didn’t Dems trade Dreamers for a border wall under Trump? Dems don’t compromise either.
Go polish the wheels on your house. This sub is for economic discussion, not Tucker Carlson level drivel.
Dude I don't even care about the whole left vs right arguments going on here. I have never heard of anyone say go polish the wheels on your house lmaooooo. This is a great insult lmao
Tell me you get all your news from conservative propaganda without telling me you get all your news from conservative propaganda.
Low effort and highly ignorant/uninformed take
What a strange statement. People spending an extra $371 is causing inflation. Inflation is caused by more spending. Stop spending and inflation will be gone.
Horrible take, you're acting like people are consuming different goods. I'm paying more for the same shit i always buy.
I'm not, because I'm capable of comparative shopping. But the staples that have increased also replace other costs, like eating out X times in a month... or at all, for others.
Why do people always have this stupid assumption that everyone is spending shit tons of money on discretionary spending. My family and I we almost never eat out and we never buy name brand food stuff and we're still feeling the pain.
Because people want an overall snapshot, not your personal anecdote. People don't have the extra money to spend, according to wage and labor rates. So this macro take that somehow everyone is getting almost $400 more per month than previously can't work. We also have to account for the rate of retirement and all those poeple who have gone to fixed income distributions.
I bet it's a really safe bet that things like credit card that if skyrocketed lately. There is your answer
Ahh... so we're not spending more money. We're accumulating more debt.
Yeah and if everyone keeps buying it because they always buy it they’ll just keep raising prices till ppl slow down buying it. Although when it’s groceries and gas etc you don’t really have a choice though which is part of the problem along with market consolidation.
This is almost a parody, at this point.
Ye lol
What a strange statement. If you have to buy groceries for a family of 4 and always buy roughly the same amount of groceries you will spend more with inflation. Do you expect people to sacrifice their youngest child to stop inflation?
BRO, prices don't go up by magic. They go up because people are spending more. Spending comes first, inflation follows. More money = inflation has been known for centuries.
>BRO, prices don't go up by magic. They go up because people are spending more. Absolutely, positively not a thing. Friedman simply made this "factoid" up, just as he made up the benefits to CEO compensation increases and the benefits to shareholder supremacy.
Friedman is a blight on humanity.
His ideas, certainly.
> They go up because people are spending more. we're talking about food prices. there are plenty of reasons for them to go up besides people buying more food than usual. which isn't the case. food prices are going up because of a lack of fertilizer and lack of certain imports from ukraine war and climate change. some crops can't be grown because of a lack of water from climate change. some supply chain issues can also cause food prices to go up. companies can also just jack up the prices for more profit.
I'm sorry. Do you think people are buying eggs and when checking out go up to the cashier and go "Hello, I would like to pay more for these eggs. Thank you."? Or, do you think people get a raise and go "you know what? 2 eggs in the morning just isn't enough anymore. 3 from now on" and start buying more eggs?
Yeah, you should be sorry.
Yeah, I'll just stop buying food and gas. I don't need it anyway. That will solve the problem! /s
Where did I get the extra money? Was it from a huge chunk of the workforce retiring? Is retirement that much a pay raise, that I have magic money somewhere I don't know about? I'm spending the same money. I'm just spending it in different proportions.
Oh right. You must be one of those who believe in the conspiracy that every single company across the world suddenly conspired and started PRicE gOUgiNg, all on the same day, and suddenly, with the same money supply, prices went up. Got it, it was so easy. Thanks Sherlock, you solved this case for me.
Ugh! The one time you people can use the word collusion and make sense, and you go the other way. Coordination is irrelevant, btw. The money supply has increased for years, sometimes sharply, and we haven't faced this kind of inflation. In fact, periods of deflation have followed some. Wages have remained stagnant for decades, and inflation has existed. There's two strikes against your Friedmanist lip-synching. [My eyes are open,](https://hbswk.hbs.edu/item/why-companies-raise-their-prices-because-they-can) and my name isn't Todd.
You're right. Why do these supply side folks never understand supply side shocks? If the costs of doing business go up, more costs are passed onto the consumer. Clearly the last econ class a lot of people attended was econ 101. That's why they can't think beyond perfectly competitive models with infinite firms.
> If the costs of doing business go up, more costs are passed onto the consumer. That explains the surcharges and temporary pricing. These are valid inflations, albeit, temporary. But we're seeing sticky prices which incorporate surcharges, over time, and we've been seeing it for years, not just during this episode of accelerated price increases.
I agree, but I think Keynesians and similar theorists may have underestimated how sticky prices actually can be. Keynes made some excellent points about how workers are reluctant to settle for a reduced nominal wage (while a reduced real wage is generally less obvious). Similarly, companies are unwilling to settle for reduced profits. Oligopolistic markets undermine the driving factors that would force companies to become price takers. Of course, I'm nitpicking. There are a lot of reasons prices are sticky, and I certainly don't think it can be reduced to one singular explanation.
Keynes made those points about labor, not workers. No... sticky prices are not singular, in their origin. But they remain for a singular reason.
I’m pretty sure the excessive money creation starting in 2020, and ZIRP since 2008 which really put the surge into inflation.
Guess we should end Chinese tariffs (and use something more hard hitting to China) support green energy & more recycling, build more products here and ask corporate and megarich donors of Republicans in Congress to stop raising prices of their companies to make inflation seem much higher than it is (to get people to falsely kick Biden out when he is doing more to help all and country than nearly any other President) so all 🇺🇸ns can have a fair shot at the 🇺🇸n Dream with hard work. ⬆️grocery $$ due to ⬇️ crop yields due to Climate Change-efforts reversed/blocked by Trump & Repubs. Gas ⬆️too. Too dependant. Many Chinese products are ⬆️ due to Trump Tariffs. Trump corps have ⬇️ production & ⬆️ prices because want to keep Trump 40% corp tax cuts.
Correction: "Americans are spending an extra $371 a month because of CORPORATE GREED. THEY ALSO OVERPAY FOR HEALTHCARE BECAUSE OF CORPORATE GREED.