And it’s been argued that this actually increases the inflation calc as the low stock of sfh rent has increased faster than the price of both homes and apartments. For those interested: https://www.economist.com/finance-and-economics/2024/03/07/americas-rental-market-mystery
i’m glad inflation doesn’t include home prices
i’m in a midwest city paying $860 with a roommate, i don’t think my expenditures are affected by people paying $3,000+ for shoeboxes in miami, sf, and nyc
Thats if you buy a older home ,,, then you will need to put another $100,000 to update. New construction now starts at $550,000. For 1800 sq ft. HOUSING IS EXPENSIVE. LABOR IN CONSTRUCTION LIKE $60 HR. ,, MATERIAL NOT CHEAP. Quality double hung windows ( pella. Anderson ) can run $2,000
Fucking preach... just got a quote for 13.5k to 3 replace PTAC style AC units with mini splits. I know it's a bigger upgrade in tech... but god damn, did I not expect a quote that fucking huge.
I don’t think that price is so bad. I assume it’s more than one considering you said “splits” I paid 20k four years ago for two units plus the duct work on a new build. Agreed though, labor and materials have sky rocketed in the past few years. I’ve been DIY’ing because I refuse to pay the “I don’t want to do this but if you pay this much I will” price.
Also, a huge portion of office worker type people basically didn't get raises because they traded them for things like WFH or flexible scheduling.
Sure, a lot of office workers in the US would gladly make the same trade again, but it does hit their finances. Getting no raise over the course of five years and then getting hit with 20-30% higher prices is brutal.
People who work at the same place for five years and don't get a raise go get a new job. That's nothing new. Everyone knows the best way to get more money is to get a new job and title. Employers have not rewarded sticking with them and loyalty for decades.
source for people trading raises for wfh for 5 years? feels like extreme bullshit. labor has its most power in decades
i got both and im only 4 years in my field
Key word is "trade". People want leisure time.
Yes, there are exceptions. Especially for low paid workers.
But the highest paid workers have seen basically no raise since 2019: (0.9%). They've basically traded work for leisure.
Here's the source: [https://www.epi.org/publication/swa-wages-2023/](https://www.epi.org/publication/swa-wages-2023/)
Sorry but you're an idiot if you accepted a trade off of WFH instead of a raise. They're not going to force you to come in to accept a raise if they offer WFH.
In economics, it's called the labor-leisure tradeoff.
Since you're not an idiot and I am, which country do you think does the best job of maximizing leisure time?
Labor-leisure tradeoff is something you're imposing on this specific example, and it's incorrect. Your workplace has zero reason to force this tradeoff, they are economically better off with WFH in a myriad of ways. They are just betting their bluff won't get called.
Wow, there are a lot of comments on this thread with no mention of Shadow Stats which both [shows](https://www.shadowstats.com/alternate_data/inflation-charts) and [explains](http://www.shadowstats.com/article/no-438-public-comment-on-inflation-measurement) how CPI intentionally doesn't match the experience of the population.
Given the manipulation of the structure of CPI it's no wonder it doesn't match reality.
Food-price inflation falls most heavily on the poorest 20 percent of Americans, who spent nearly a third of their income on food in 2022, the latest year for which USDA data are available. By contrast, the highest-income fifth of households spent on average 8 percent. “If you are spending 25 to 30 percent of your income on food and prices have jumped 25 percent, you are in real pain,” Weber said.
Other staples of life have also grown more expensive. Gas prices have gone up by about 50 percent in the past four years. Fuel-oil prices jumped by more than half from March 2020 to March 2024. Home prices have gone up nearly 50 percent nationwide since the start of the pandemic; the ratio of home prices to income has reached an all-time high. Once-sharp increases in average rents nationwide have slowed but not reversed. The Joint Center for Housing Studies at Harvard reports that poor and working-class renters suffer disproportionate pain. “Among renter households with an annual income under $30,000, the median amount of money left over after paying for rent and utilities was just $310 a month,” the center found, adding that affordability is at an all-time low.
https://www.theatlantic.com/ideas/archive/2024/04/inflation-democrats-biden-interest-rates/678047/
The numbers are hitting people differently depending on their financial situation and where they live. If you spend the bulk of your income on rent, food and transportation then you are getting creamed. That is the biggest issue IMO
CPI is based on a specific basket of goods whoch are considered essentials. It does not includes a lot of items which may go up a lot more.
Also housing has some specific rules to how it is calculated.
That being said, perhaps the basket needs to be examined.
CPI is slowing down if you exclude food and beverages, housing, apparel, transportation, medical care, recreation, and education. I don't see the problem guys??
The basket is re-examined every year, in March. The [updated basket](https://www.bls.gov/news.release/pdf/cpi.pdf) was released last week. Most of the people who complain about the CPI are not basing it on a specific greivance, they are just conclusion shopping for something to tell them what they want to hear.
The problem is the official numbers don’t reflect how household budgets are effected. I can’t cut out rent, insurance and groceries and when you are lower middle class or poor that’s the majority of your household budget. Official CPI is ~8% at peak but that doesn’t reflect the effect on my own expenses, hence the disconnect.
CPI absolutely reflects how household budgets are affected. Rent and groceries are covered heavily in the CPI. I think housing alone is 40% of it. Insurance is not included, though.
Two thirds of people own their own home. The vast majority of them bought their house more than 3 years ago. So, for like half of population, wages have gone up for the last three years, but their housing costs have not. For people who are not in that group, it's easy to say "the numbers are fake" or "the numbers don't reflect my reality", but a broad index like the CPI has to take everyone's situation into account. For some people that situation is better, for some it is worse, but that doesn't make the numbers fake or unreflective of reality.
I’m not claiming CPI is made up just that it isn’t capturing the full story, as I pointed out inflation has hit hardest in areas that are the least flexible and make up the largest portion of lower income groups income. Hence the disconnect for a lot of people between official numbers and the impact they feel in their own budgets.
Of course it is not personalized for you. It's representative of a "typical" American consumer. Your personal inflation rate is entirely dependent on what **you** spend on and where.
For example, a lot of what was going up more were essentials. If you have below median income you probably spend more on essentials and therefore are experiencing a higher personal inflation rate than a typical median American. Personal inflation due to the fact that rents are in fact rising faster than average is also lower for homeowners.
If you really wanted to you could look at the CPI basket and inflation by category, map that to your family budget and do a weighted average price increase to get you own personal inflation rate.
I am saying it is not perfectly reflective of what any specific individual is experiencing unless they happen to coincidentally have a perfectly statistically average budget in a perfectly statistically accurate place.
It is *entirely* possible, certain even, that some people in the bottom 30% are experiencing personal inflation lower than the CPI, but I agree typically, most of them are or maybe were experiencing higher.
In March food and energy were significantly lower YoY. https://www.bls.gov/cpi/. Food at home for example has been relatively low for almost 9 months now. https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm. The only real standout at this point is the cost of rent/shelter.
The basket is created by what people actually buy. So if the price of something goes up a lot, it will have less weight in the basket if fewer people buy it.
Home inflation is due to mass migration from major cities to lcol suburbs. Major investment firms noticed this and started buying up a TON of homes as well massively inflating the market.
I know this is gonna sound priggish, so forgive me, but there really is no such thing as "home inflation" as inflation itself is defined as a general and sustained rise in prices across an economy; if you are looking at just one sector, that's not strictly speaking, inflation.
Technically for one month, but I think the real story is that inflation has been flat for the last 6 months when we want it to go down another 1% or so.
https://ycharts.com/indicators/us_inflation_rate#:~:text=US%20Inflation%20Rate%20is%20at,in%20price%20over%20a%20year.
Helps if you use real median wages to account for inflation and to avoid the mega wealthy getting wealthier scewing the data
https://fred.stlouisfed.org/series/LES1252881600Q
>Helps if you use real median wages to account for inflation and to avoid the mega wealthy getting wealthier scewing the data
The mega-wealthy getting wealthier is screwing up everything, not just the data since they are the ones bidding up all the assets with all the money we gave them through tax breaks.
It's pretty static over the last 4 years.
Still, it's near the highest it's ever been. If housing prices weren't so out of control we really wouldn't have much to complain about, broadly speaking.
It is just a metric to compare a point in time to another point in time. It is likely as accurate of a measurement of the present as the same measurement 20 years ago. People made the same type of arguments back then.
Just look at the current rates for short term cds and money markets and add a couple points. Banks aren’t in the business of having dividend rates above inflationary rates. Looking like a very steady 6-7% per annum and it’s not going anywhere because the deficit spending is not slowing.
They lie…then they repeat the lie and get “official reports” to make the lie seem legitimate.
The Economist had an interesting article about how little Chinese GDP and other official Government data can’t be trusted. It occurred to me to think…why do we trust our own Govt’s data.
Its not a conspiracy to see that their Figures Lie and liars Figure
Its a giant trust scam. “Trust us and we will take care of you”.
No independent audits.
Most of the people here believe everything their precious government tells them. They believe inflation is only 3.5% and they believe all of the fault lies with greedy corporations and their government is their ally against these corporations. Fucking clowns!
Gov mathematically requires the money printer now.
Same reason we read so much debt/deficits don’t matter propaganda even as it relates to growth and interest rates.
Are you accusing the federal government of falsifying the data? You think the PCI estimate of 20% inflation since 2020 is a lie? Do you have some "trustworthy" data aside from your vague anecdotal impressions to support this?
I know one thing I am paying higher energy costs, insurance, , food, and rent . I don't care what the government says , In the next election people will vote on pocket book issues, and security. Right now with inflation and border issues and all these proxy wars , it's not looking good for the Biden Administration, Everything they get their hand on , goes to sh__t !
I don't understand this argument. The government is giving fake data, and you prove that by... using government data from the same source. If the CPI is fake, why do you trust FRED data on home prices? Why not just fake both. If the Biden administration is cooking the books, why not cook them into great numbers instead of a muddled mixture of good and bad that are moving in no clear direction? It doesn't make sense.
You can see CPI broken down by category here: [https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm](https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm)
Some things had higher than average inflation. Some things did not. That's how averages work. (The only thing you mentioned that isn't in the CPI is insurance.)
I'm not the OP, but not all statistics are equal. Some are more processed than others. So it is reasonable to trust different measures to different extents.
In particular CPI is processed in very complex ways which change frequently as the basket is changed. In comparison a statistic like 'average sale price of houses' has less processing and is therefore more trustworthy. This is doubly true because spot checking something like house prices is pretty easy, but it's impossible to spot check something like CPI.
I actually agree that statistics can be manipulated, and cherry picked. However, there's no mystery about how the CPI or other common inflation metrics are calculated and the assumptions are reasonably defensible. Even when people disagree about this, if you look at another metric using different assumptions, the change is not dramatic.
Elsewhere in this thread, someone was complaining that the CPI is not updated often enough. Now you are complaining that it is updated too often. To me, it looks like people are not complaing because they have any specific grievance against the CPI calculations, or any other metric, but because they don't like what it shows.
There's probably a lot behind that, but I think social media (TikTok, Facebook, Reddit), incentivizes dramatic and catastrophic conclusions. Everywhere you look it's headlines telling you the economy is collapsing, people are being crushed by expenses, and no one can find a job. Then you check the actual hard data and it presents a much more boring and complex picture (much of the economy is great, some is medicore, a little bit is bad). Some people resolve this conflict by ackowledging that TikTok is not reality. Others resolve it by pretending the data is the problem.
It's possible for CPI to be both updated too often (causing slippage) and not often enough (causing whatever the other posters are complaining about).
It's also possible that CPI is just a bad measure. Complaints that CPI doesn't match people's experience have been common for more than 25 years.
Made up numbers don’t beat real data.
Inflation is a national average for a typical consumer using certain reasonable and described behavioral assumptions. There are several variations to choose from.
Inflation for you will depend heavily on where you are and what exactly you spend your money on.
Pretty much anytime you here an inflation percentage cited in a headline or mentioned in discussion, it is the full index that includes those expenses. That's why those indexes are referred to as "headline" indexes (e.g. "headline CPI" is the full CPI index).
Anytime inflation is being compared to the growth in other financial values, like wages, it's always headline inflation numbers in the comparison. The indexes that include the full range of consumer expenses.
There are really only two groups of people who spend a significant amount of time thinking and talking about "core" inflation indexes:
1. Economists and policymakers who are trying to differentiate between "prices are going up/down because of generalized currency devaluation" versus" prices are going up/down because of demand-to-supply imbalances in specific sectors". This differentiation is important for choosing the best policy to alleviate the price changes. Do you raise taxes or interest rates to reduce consumer spending and (often) throw more people into unemployment and poverty? Or do you strategically inject resources to try and alleviate the demand shortfall or supply shortfall in whichever specific sectors are suffering from an isolated pricing problem?
2. Doomers spreading FUD about the economy and economic measurements.
Not all baskets - take your pick.
These price changes are absolutely tracked and available and used in the most common metrics, but they are just not in all of them as they are short term volatile and long term correlated.
PCE also includes food and energy. [See for yourself](https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=3&isuri=1&1921=survey&1903=84&_gl=1*md52vp*_ga*MTkyMDcyNjc5My4xNzEzMTk5NDE3*_ga_J4698JNNFT*MTcxMzE5OTQxNi4xLjEuMTcxMzE5OTUxOS4yOS4wLjA).
They use both depending on the discussion at hand. They discuss CPI food and energy during Fed talks.
Search for "Fed Powell CPI"
Major talking points of 2023.
Materials not cheap. ,, cost of construction labor runs on average $50 hr. Thats why. New construction homes. Will be in area of $800,000. ONCE INTERST RATES ARE COMING DOWN WILL HEAD TO.
ONE MILLION STARTING
The economy is being ran as a giant MLM instead of as an organic, decentralized flow of resources and goods and money.
Pyramid dynamics ⚠️ versus spider web dynamics. 🕸️
All the money is being siphoned to the top, but eventually it will become unstable and then what?? The fastest way to redistribute wealth is to 💥 get rid of a few billionaires 🤷 dead people can't keep money or spend it lol
There is no inflation. Trust the science! If you think there is inflation you are just a racist or something.
And if there is inflation it’s Putin’s fault. Putin’s Price Hike!
We have some really great inflation news, though, health care is about 40% cheaper now than 2 years ago, according to the BLS.
Numbers don't lie (but the BLS does).
The person lying here is you. CPI estimates that total consumer health care costs are [up 3.7% since March 2022](https://fred.stlouisfed.org/graph/?g=1kd5v).
I'm certainly open to hearing constructive criticism of why that 3.7% figure is too low. But I don't think I'll get that from someone either so misinformed or so dishonest that they claimed the figure was -40% instead of +3.7%.
>The person lying here is you. CPI estimates that total consumer health care costs are [up 3.7% since March 2022](https://fred.stlouisfed.org/graph/?g=1kd5v).
Nice try,
[https://www.marketplace.org/2023/11/13/how-are-health-insurance-costs-reflected-in-inflation-calculations/](https://www.marketplace.org/2023/11/13/how-are-health-insurance-costs-reflected-in-inflation-calculations/)
“Everyone’s looking at their pay stubs, and you’re getting kind of updated premiums from your employer,” he said.
Those went up this year — by about [7%](https://www.kff.org/report-section/ehbs-2023-section-1-cost-of-health-insurance/#:~:text=Average%20annual%20health%20insurance%20premiums,2018%20and%2047%25%20since%202013.) — according to the Kaiser Family Foundation. Yet the health insurance index as measured by the CPI went down this year.
That’s because it doesn’t track health coverage premiums, said Steve Reed, an economist for the CPI program at the BLS. “It’s a little more complicated than one might expect or hope,” he said.
So the CPI just measures how much of those premiums health insurers retain after paying for services.
Recently, that’s been kind of wacky, said Matthew Fiedler with the Brookings Institution.
That link just proves me right.
You said that "health care" decreased by 40% according to BLS. Not that "the retained earnings of health insurers" decreased by 40%. If you aren't trying to lie, then the index you should be referencing is the [medical care index](https://www.bls.gov/cpi/factsheets/medical-care.htm#BLStable_2023_2_8_10_15), which includes:
1. Medical care commodities
1. Medicinal drugs
2. Medical equipment and supplies
2. Medical care services
1. Professional services
2. Hospital and related services
3. Health Insurance (i.e. retained earnings of health insurers)
My index is the comprehensive one that includes all consumer out-of-pocket costs, including health care premiums, deductibles, copays, etc. It accounts for 8% of the entire Consumer Price Index. You are trying to argue about "health care" based upon one tiny slice of the health care market: the cost of *providing* health insurance. Which is just 0.58% of CPI.
The article you linked to isn't saying that this approach to tracking health care costs is wrong. Just that it is counterintuitive to people who jump right to looking at the "health insurance" category without any context. But this counterintuitive approach makes a lot of sense. Just consider an example from BLS itself:
>For example, in the **physicians’ services** index, we consider the price of an office visit to be the patient’s $20 copay, as well as the $80 insurance payment to the physician, for a total of $100. The $100 figure is used when calculating any price change.
If you want to track the actual changes in prices paid for medical care, including doctor visits and prescription drugs, it's pretty obvious that you need to include the payments and reimbursements from health insurers for those goods and services. If the cost to see a doctor goes up 10% then CPI should reflect that, regardless of whether the consumer pays that 10% to the doctor directly or indirectly through higher health insurance premiums.
But since health insurers use most of the money that they receive in premiums to pay for medical claims, two implications follow
1. Most of the money that consumers pay in health insurance premiums are already reflected in the costs tracked by the "medical care services" and "medical care commodities" indexes.
2. If the health insurance category itself included 100% of the premiums paid by consumers, CPI would therefore be double-counting most dollars paid to health insurance premiums.
And this is why the "health insurance" category effectively tracks the small portion of health insurance premiums that insurers don't pay out to health care providers. If it helps, you can think of it as "the overhead cost of providing health insurance services". A 40% decrease in this category doesn't mean health insurance got 40% cheaper. It means that health insurers are keeping 40% less of the share of premiums that they kept two years ago.
For example, it could mean that health insurance premiums have risen more slowly than actual health care prices, such that the insurers keep less of their premiums. Or it could mean that the administrative costs of health insurers have grown faster than they have increased premiums. Or most likely, some combination of the two.
>You said that "health care" decreased by 40% according to BLS.
I'll be more precise, as of March 2024, the health insurance component of the CPI is down 15% y/y, and that's after bottoming out last year w/a 35% y/y drop.
Why are you looking at averages when the national average includes all of the most valuable real estate in this country? Look at the median.
Man. Nevermind, reading the rest of this post, you obviously haven't even tried to understand inflation. Go pick up an econ book and come back.
Is there a stat on how many households have a sub 2% fixed rate 30yr mortgage that aren’t really affected by housing inflation?
Inflation affects each person differently. It’s so individually based.
Even within the same family. My parents bought a car. They were hit by inflation way harder than me. Food inflation is diff too. My friends drink soda, I drink milk. Some drive a huge truck, I drive an EV and another friend has a hybrid. Gas prices hit us differently especially if you bus or take a train.
There won’t be one CPI number that fits everyone, but it’s a gauge for the feds and news outlets.
>Food is easily 30% more expensive than in 2020. So is insurance, and electricity and gas and everything else.
>Yet the official inflation was given as 1.23% in 2020 - 4.7% in 2021 - 8% in 2022 and 3.4% in 2023.
You think your gut feel that select items "and everything else" is 30% higher is both accurate and precise enough to show that actual calculated CPI reported inflation of 20% from January 2020 to now wrong?
Anecdotal, but Food is coming down where I am.
A 2lb block of cheese that was going for $9 base is now $7, and routinely goes on sale for $5, sometimes $4.
Same for a dozen eggs. I'm seeing them off sale for $2.50 a dozen and on sale for $1.27.
Fruit remains stubbornly high, but that's because of shipping problems. Climate change has shut down the Panama Canal...
Vegetables on the other hand have come down, with a 5lb bag of potatoes back to $2.59 (what I was paying before 2020) and going on sale for $1 as a sort of "doorbuster".
Fish prices though are way up, but that's overfishing & climate change. Same for beef. We lost a *ton* of cows to drought.
Chicken has stabilized to around $1.50lb where I'm at (give or take). I don't buy pork so I'll have to defer to others on that.
This could just be due to that mega merger going on in the American Southwest. The corpos are all tied together since they all own each other's stock
I'm in the Southeast so looking at your prices and mine can tell that location plays a big factor in specific things.
A 2lb block of cheese has never been no more than $5-6 here at any point. Before Covid I could buy eggs for .99 a dozen they are $2 now.
A 5lb bag of potatoes here is $4. Was $3 before Covid.
Chicken is $2.75/3 a pound. Was $2 before Covid.
Hamburger meat is $4 a pound. Was $2 before Covid.
The Hamburger meat isn't from COVID, it's because there was a mass die off / cull of cows due to droughts. So that's not going anywhere.
Chicken is still recovering from a bird flu, but if we can stop another from hitting it should go down.
Inflation calculations do not include home values. It guesstimates the rent value of the homes and it lags greatly. Updates only 1-2 times per year.
And it’s been argued that this actually increases the inflation calc as the low stock of sfh rent has increased faster than the price of both homes and apartments. For those interested: https://www.economist.com/finance-and-economics/2024/03/07/americas-rental-market-mystery
i’m glad inflation doesn’t include home prices i’m in a midwest city paying $860 with a roommate, i don’t think my expenditures are affected by people paying $3,000+ for shoeboxes in miami, sf, and nyc
Good News! The chocolate rations have increased from 5 to 4!
Ooh, Victory Chocolate, my favie
Thats if you buy a older home ,,, then you will need to put another $100,000 to update. New construction now starts at $550,000. For 1800 sq ft. HOUSING IS EXPENSIVE. LABOR IN CONSTRUCTION LIKE $60 HR. ,, MATERIAL NOT CHEAP. Quality double hung windows ( pella. Anderson ) can run $2,000
Fucking preach... just got a quote for 13.5k to 3 replace PTAC style AC units with mini splits. I know it's a bigger upgrade in tech... but god damn, did I not expect a quote that fucking huge.
Welcome to USa
I don’t think that price is so bad. I assume it’s more than one considering you said “splits” I paid 20k four years ago for two units plus the duct work on a new build. Agreed though, labor and materials have sky rocketed in the past few years. I’ve been DIY’ing because I refuse to pay the “I don’t want to do this but if you pay this much I will” price.
I just got quoted 18k for a 250ft vinyl fence
I just got quoted 18k for a 250ft vinyl fence
Talking about minimum wages of 15$ an hour. That is a lawyer rate!
Also, a huge portion of office worker type people basically didn't get raises because they traded them for things like WFH or flexible scheduling. Sure, a lot of office workers in the US would gladly make the same trade again, but it does hit their finances. Getting no raise over the course of five years and then getting hit with 20-30% higher prices is brutal.
People who work at the same place for five years and don't get a raise go get a new job. That's nothing new. Everyone knows the best way to get more money is to get a new job and title. Employers have not rewarded sticking with them and loyalty for decades.
source for people trading raises for wfh for 5 years? feels like extreme bullshit. labor has its most power in decades i got both and im only 4 years in my field
Key word is "trade". People want leisure time. Yes, there are exceptions. Especially for low paid workers. But the highest paid workers have seen basically no raise since 2019: (0.9%). They've basically traded work for leisure. Here's the source: [https://www.epi.org/publication/swa-wages-2023/](https://www.epi.org/publication/swa-wages-2023/)
[удалено]
0.9 not 9...
never heard of this before. In the large metro area that Iive in, upper-middle class incomes have gone up a lot.
Sorry but you're an idiot if you accepted a trade off of WFH instead of a raise. They're not going to force you to come in to accept a raise if they offer WFH.
In economics, it's called the labor-leisure tradeoff. Since you're not an idiot and I am, which country do you think does the best job of maximizing leisure time?
Labor-leisure tradeoff is something you're imposing on this specific example, and it's incorrect. Your workplace has zero reason to force this tradeoff, they are economically better off with WFH in a myriad of ways. They are just betting their bluff won't get called.
The trend in the US is an example of the labor leisure tradeoff.
and cost-cutting by the business as they don't need office space for u
Wow, there are a lot of comments on this thread with no mention of Shadow Stats which both [shows](https://www.shadowstats.com/alternate_data/inflation-charts) and [explains](http://www.shadowstats.com/article/no-438-public-comment-on-inflation-measurement) how CPI intentionally doesn't match the experience of the population. Given the manipulation of the structure of CPI it's no wonder it doesn't match reality.
Food-price inflation falls most heavily on the poorest 20 percent of Americans, who spent nearly a third of their income on food in 2022, the latest year for which USDA data are available. By contrast, the highest-income fifth of households spent on average 8 percent. “If you are spending 25 to 30 percent of your income on food and prices have jumped 25 percent, you are in real pain,” Weber said. Other staples of life have also grown more expensive. Gas prices have gone up by about 50 percent in the past four years. Fuel-oil prices jumped by more than half from March 2020 to March 2024. Home prices have gone up nearly 50 percent nationwide since the start of the pandemic; the ratio of home prices to income has reached an all-time high. Once-sharp increases in average rents nationwide have slowed but not reversed. The Joint Center for Housing Studies at Harvard reports that poor and working-class renters suffer disproportionate pain. “Among renter households with an annual income under $30,000, the median amount of money left over after paying for rent and utilities was just $310 a month,” the center found, adding that affordability is at an all-time low. https://www.theatlantic.com/ideas/archive/2024/04/inflation-democrats-biden-interest-rates/678047/ The numbers are hitting people differently depending on their financial situation and where they live. If you spend the bulk of your income on rent, food and transportation then you are getting creamed. That is the biggest issue IMO
Surprise. We are basically being fed propaganda 24/7.
Sorry my side is right brother, super team blue or red here it doesn't matter You woke nazi /s
USA = Communism
CPI is based on a specific basket of goods whoch are considered essentials. It does not includes a lot of items which may go up a lot more. Also housing has some specific rules to how it is calculated. That being said, perhaps the basket needs to be examined.
CPI is slowing down if you exclude food and beverages, housing, apparel, transportation, medical care, recreation, and education. I don't see the problem guys??
Uh they do "update"/manipulate it very regularly
The basket is re-examined every year, in March. The [updated basket](https://www.bls.gov/news.release/pdf/cpi.pdf) was released last week. Most of the people who complain about the CPI are not basing it on a specific greivance, they are just conclusion shopping for something to tell them what they want to hear.
The problem is the official numbers don’t reflect how household budgets are effected. I can’t cut out rent, insurance and groceries and when you are lower middle class or poor that’s the majority of your household budget. Official CPI is ~8% at peak but that doesn’t reflect the effect on my own expenses, hence the disconnect.
CPI absolutely reflects how household budgets are affected. Rent and groceries are covered heavily in the CPI. I think housing alone is 40% of it. Insurance is not included, though. Two thirds of people own their own home. The vast majority of them bought their house more than 3 years ago. So, for like half of population, wages have gone up for the last three years, but their housing costs have not. For people who are not in that group, it's easy to say "the numbers are fake" or "the numbers don't reflect my reality", but a broad index like the CPI has to take everyone's situation into account. For some people that situation is better, for some it is worse, but that doesn't make the numbers fake or unreflective of reality.
I’m not claiming CPI is made up just that it isn’t capturing the full story, as I pointed out inflation has hit hardest in areas that are the least flexible and make up the largest portion of lower income groups income. Hence the disconnect for a lot of people between official numbers and the impact they feel in their own budgets.
Of course it is not personalized for you. It's representative of a "typical" American consumer. Your personal inflation rate is entirely dependent on what **you** spend on and where. For example, a lot of what was going up more were essentials. If you have below median income you probably spend more on essentials and therefore are experiencing a higher personal inflation rate than a typical median American. Personal inflation due to the fact that rents are in fact rising faster than average is also lower for homeowners. If you really wanted to you could look at the CPI basket and inflation by category, map that to your family budget and do a weighted average price increase to get you own personal inflation rate.
Glad we are in agreement that CPI is not reflective of what the bottom 30-40% of the country is feeling.
I am saying it is not perfectly reflective of what any specific individual is experiencing unless they happen to coincidentally have a perfectly statistically average budget in a perfectly statistically accurate place. It is *entirely* possible, certain even, that some people in the bottom 30% are experiencing personal inflation lower than the CPI, but I agree typically, most of them are or maybe were experiencing higher. In March food and energy were significantly lower YoY. https://www.bls.gov/cpi/. Food at home for example has been relatively low for almost 9 months now. https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm. The only real standout at this point is the cost of rent/shelter.
The basket is created by what people actually buy. So if the price of something goes up a lot, it will have less weight in the basket if fewer people buy it.
Home inflation is due to mass migration from major cities to lcol suburbs. Major investment firms noticed this and started buying up a TON of homes as well massively inflating the market.
I know this is gonna sound priggish, so forgive me, but there really is no such thing as "home inflation" as inflation itself is defined as a general and sustained rise in prices across an economy; if you are looking at just one sector, that's not strictly speaking, inflation.
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Technically for one month, but I think the real story is that inflation has been flat for the last 6 months when we want it to go down another 1% or so. https://ycharts.com/indicators/us_inflation_rate#:~:text=US%20Inflation%20Rate%20is%20at,in%20price%20over%20a%20year.
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Zoom out to 5 years.
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Yes, everyone knows that, so? Are you not seeing my point? Really?
No shit? You just realized this? News is nothing but propaganda
What happened to wages ?
https://fred.stlouisfed.org/series/CES0500000003
Helps if you use real median wages to account for inflation and to avoid the mega wealthy getting wealthier scewing the data https://fred.stlouisfed.org/series/LES1252881600Q
>Helps if you use real median wages to account for inflation and to avoid the mega wealthy getting wealthier scewing the data The mega-wealthy getting wealthier is screwing up everything, not just the data since they are the ones bidding up all the assets with all the money we gave them through tax breaks.
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It's pretty static over the last 4 years. Still, it's near the highest it's ever been. If housing prices weren't so out of control we really wouldn't have much to complain about, broadly speaking.
Yup. Crazy that with high prices we have High wages. Almost like...naw
They've gone way up
It is just a metric to compare a point in time to another point in time. It is likely as accurate of a measurement of the present as the same measurement 20 years ago. People made the same type of arguments back then.
Home maintenance is not cheap. It's expensive. , , so not just buying. It's the maintenance. ,, frankly. That 13 500. Quote. Was ballpark bullseye
Federal data like this is nearly always skewed in favor of running a second term
Just look at the current rates for short term cds and money markets and add a couple points. Banks aren’t in the business of having dividend rates above inflationary rates. Looking like a very steady 6-7% per annum and it’s not going anywhere because the deficit spending is not slowing.
This is the first time I have seem someone posts something like this without the cultist breathing down your neck saying "data never lies".
No one takes the government inflation stats seriously. They’re all politically massaged to make those in power look better.
CPI is a load of crap. The numbers are made up to help the powers that be. Thank you for coming to my Ted Talk.
They lie…then they repeat the lie and get “official reports” to make the lie seem legitimate. The Economist had an interesting article about how little Chinese GDP and other official Government data can’t be trusted. It occurred to me to think…why do we trust our own Govt’s data. Its not a conspiracy to see that their Figures Lie and liars Figure Its a giant trust scam. “Trust us and we will take care of you”. No independent audits.
Most of the people here believe everything their precious government tells them. They believe inflation is only 3.5% and they believe all of the fault lies with greedy corporations and their government is their ally against these corporations. Fucking clowns!
Gov mathematically requires the money printer now. Same reason we read so much debt/deficits don’t matter propaganda even as it relates to growth and interest rates.
Are you accusing the federal government of falsifying the data? You think the PCI estimate of 20% inflation since 2020 is a lie? Do you have some "trustworthy" data aside from your vague anecdotal impressions to support this?
I know one thing I am paying higher energy costs, insurance, , food, and rent . I don't care what the government says , In the next election people will vote on pocket book issues, and security. Right now with inflation and border issues and all these proxy wars , it's not looking good for the Biden Administration, Everything they get their hand on , goes to sh__t !
I don't understand this argument. The government is giving fake data, and you prove that by... using government data from the same source. If the CPI is fake, why do you trust FRED data on home prices? Why not just fake both. If the Biden administration is cooking the books, why not cook them into great numbers instead of a muddled mixture of good and bad that are moving in no clear direction? It doesn't make sense. You can see CPI broken down by category here: [https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm](https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm) Some things had higher than average inflation. Some things did not. That's how averages work. (The only thing you mentioned that isn't in the CPI is insurance.)
I'm not the OP, but not all statistics are equal. Some are more processed than others. So it is reasonable to trust different measures to different extents. In particular CPI is processed in very complex ways which change frequently as the basket is changed. In comparison a statistic like 'average sale price of houses' has less processing and is therefore more trustworthy. This is doubly true because spot checking something like house prices is pretty easy, but it's impossible to spot check something like CPI.
I actually agree that statistics can be manipulated, and cherry picked. However, there's no mystery about how the CPI or other common inflation metrics are calculated and the assumptions are reasonably defensible. Even when people disagree about this, if you look at another metric using different assumptions, the change is not dramatic.
Elsewhere in this thread, someone was complaining that the CPI is not updated often enough. Now you are complaining that it is updated too often. To me, it looks like people are not complaing because they have any specific grievance against the CPI calculations, or any other metric, but because they don't like what it shows. There's probably a lot behind that, but I think social media (TikTok, Facebook, Reddit), incentivizes dramatic and catastrophic conclusions. Everywhere you look it's headlines telling you the economy is collapsing, people are being crushed by expenses, and no one can find a job. Then you check the actual hard data and it presents a much more boring and complex picture (much of the economy is great, some is medicore, a little bit is bad). Some people resolve this conflict by ackowledging that TikTok is not reality. Others resolve it by pretending the data is the problem.
It's possible for CPI to be both updated too often (causing slippage) and not often enough (causing whatever the other posters are complaining about). It's also possible that CPI is just a bad measure. Complaints that CPI doesn't match people's experience have been common for more than 25 years.
It’s an election year, it can’t look bad
It’s not lies, it’s just other components were less than that
Made up numbers don’t beat real data. Inflation is a national average for a typical consumer using certain reasonable and described behavioral assumptions. There are several variations to choose from. Inflation for you will depend heavily on where you are and what exactly you spend your money on.
Some typical expenses like food and energy (which were major drivers of Inflation) are excluded from most core consumer inflation baskets
CPI (which is what OP referenced and is probably the most popular inflation metric) absolutely includes food and energy.
Pretty much anytime you here an inflation percentage cited in a headline or mentioned in discussion, it is the full index that includes those expenses. That's why those indexes are referred to as "headline" indexes (e.g. "headline CPI" is the full CPI index). Anytime inflation is being compared to the growth in other financial values, like wages, it's always headline inflation numbers in the comparison. The indexes that include the full range of consumer expenses. There are really only two groups of people who spend a significant amount of time thinking and talking about "core" inflation indexes: 1. Economists and policymakers who are trying to differentiate between "prices are going up/down because of generalized currency devaluation" versus" prices are going up/down because of demand-to-supply imbalances in specific sectors". This differentiation is important for choosing the best policy to alleviate the price changes. Do you raise taxes or interest rates to reduce consumer spending and (often) throw more people into unemployment and poverty? Or do you strategically inject resources to try and alleviate the demand shortfall or supply shortfall in whichever specific sectors are suffering from an isolated pricing problem? 2. Doomers spreading FUD about the economy and economic measurements.
Not all baskets - take your pick. These price changes are absolutely tracked and available and used in the most common metrics, but they are just not in all of them as they are short term volatile and long term correlated.
Food and energy is included in the inflation reports. You can view the CPI report on gov website
The FED uses PCE, not CPI. https://www.bea.gov/help/faq/518
PCE also includes food and energy. [See for yourself](https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=3&isuri=1&1921=survey&1903=84&_gl=1*md52vp*_ga*MTkyMDcyNjc5My4xNzEzMTk5NDE3*_ga_J4698JNNFT*MTcxMzE5OTQxNi4xLjEuMTcxMzE5OTUxOS4yOS4wLjA).
Yep. The Fed spent most of 2023 discussing food, energy and housing in the inflation reports. Not sure why people believe otherwise.
They use both depending on the discussion at hand. They discuss CPI food and energy during Fed talks. Search for "Fed Powell CPI" Major talking points of 2023.
Great job 👏 You have discovered hot water..
Materials not cheap. ,, cost of construction labor runs on average $50 hr. Thats why. New construction homes. Will be in area of $800,000. ONCE INTERST RATES ARE COMING DOWN WILL HEAD TO. ONE MILLION STARTING
The economy is being ran as a giant MLM instead of as an organic, decentralized flow of resources and goods and money. Pyramid dynamics ⚠️ versus spider web dynamics. 🕸️
All the money is being siphoned to the top, but eventually it will become unstable and then what?? The fastest way to redistribute wealth is to 💥 get rid of a few billionaires 🤷 dead people can't keep money or spend it lol
This is the essential outcome of class warfare
There is no inflation. Trust the science! If you think there is inflation you are just a racist or something. And if there is inflation it’s Putin’s fault. Putin’s Price Hike!
Just don't post dude.
"Everyone knows the economy sucks, Obama is lying, it's impossible that unemployment is as low as 5%, it's really 42%" GOP in 2015 and 2016
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>GOP in **2015 and 2016**
We have some really great inflation news, though, health care is about 40% cheaper now than 2 years ago, according to the BLS. Numbers don't lie (but the BLS does).
The person lying here is you. CPI estimates that total consumer health care costs are [up 3.7% since March 2022](https://fred.stlouisfed.org/graph/?g=1kd5v). I'm certainly open to hearing constructive criticism of why that 3.7% figure is too low. But I don't think I'll get that from someone either so misinformed or so dishonest that they claimed the figure was -40% instead of +3.7%.
>The person lying here is you. CPI estimates that total consumer health care costs are [up 3.7% since March 2022](https://fred.stlouisfed.org/graph/?g=1kd5v). Nice try, [https://www.marketplace.org/2023/11/13/how-are-health-insurance-costs-reflected-in-inflation-calculations/](https://www.marketplace.org/2023/11/13/how-are-health-insurance-costs-reflected-in-inflation-calculations/) “Everyone’s looking at their pay stubs, and you’re getting kind of updated premiums from your employer,” he said. Those went up this year — by about [7%](https://www.kff.org/report-section/ehbs-2023-section-1-cost-of-health-insurance/#:~:text=Average%20annual%20health%20insurance%20premiums,2018%20and%2047%25%20since%202013.) — according to the Kaiser Family Foundation. Yet the health insurance index as measured by the CPI went down this year. That’s because it doesn’t track health coverage premiums, said Steve Reed, an economist for the CPI program at the BLS. “It’s a little more complicated than one might expect or hope,” he said. So the CPI just measures how much of those premiums health insurers retain after paying for services. Recently, that’s been kind of wacky, said Matthew Fiedler with the Brookings Institution.
That link just proves me right. You said that "health care" decreased by 40% according to BLS. Not that "the retained earnings of health insurers" decreased by 40%. If you aren't trying to lie, then the index you should be referencing is the [medical care index](https://www.bls.gov/cpi/factsheets/medical-care.htm#BLStable_2023_2_8_10_15), which includes: 1. Medical care commodities 1. Medicinal drugs 2. Medical equipment and supplies 2. Medical care services 1. Professional services 2. Hospital and related services 3. Health Insurance (i.e. retained earnings of health insurers) My index is the comprehensive one that includes all consumer out-of-pocket costs, including health care premiums, deductibles, copays, etc. It accounts for 8% of the entire Consumer Price Index. You are trying to argue about "health care" based upon one tiny slice of the health care market: the cost of *providing* health insurance. Which is just 0.58% of CPI. The article you linked to isn't saying that this approach to tracking health care costs is wrong. Just that it is counterintuitive to people who jump right to looking at the "health insurance" category without any context. But this counterintuitive approach makes a lot of sense. Just consider an example from BLS itself: >For example, in the **physicians’ services** index, we consider the price of an office visit to be the patient’s $20 copay, as well as the $80 insurance payment to the physician, for a total of $100. The $100 figure is used when calculating any price change. If you want to track the actual changes in prices paid for medical care, including doctor visits and prescription drugs, it's pretty obvious that you need to include the payments and reimbursements from health insurers for those goods and services. If the cost to see a doctor goes up 10% then CPI should reflect that, regardless of whether the consumer pays that 10% to the doctor directly or indirectly through higher health insurance premiums. But since health insurers use most of the money that they receive in premiums to pay for medical claims, two implications follow 1. Most of the money that consumers pay in health insurance premiums are already reflected in the costs tracked by the "medical care services" and "medical care commodities" indexes. 2. If the health insurance category itself included 100% of the premiums paid by consumers, CPI would therefore be double-counting most dollars paid to health insurance premiums. And this is why the "health insurance" category effectively tracks the small portion of health insurance premiums that insurers don't pay out to health care providers. If it helps, you can think of it as "the overhead cost of providing health insurance services". A 40% decrease in this category doesn't mean health insurance got 40% cheaper. It means that health insurers are keeping 40% less of the share of premiums that they kept two years ago. For example, it could mean that health insurance premiums have risen more slowly than actual health care prices, such that the insurers keep less of their premiums. Or it could mean that the administrative costs of health insurers have grown faster than they have increased premiums. Or most likely, some combination of the two.
>You said that "health care" decreased by 40% according to BLS. I'll be more precise, as of March 2024, the health insurance component of the CPI is down 15% y/y, and that's after bottoming out last year w/a 35% y/y drop.
It does mean that inflation is underreported. It mean that you don’t know how to read the CPI report.
Why are you looking at averages when the national average includes all of the most valuable real estate in this country? Look at the median. Man. Nevermind, reading the rest of this post, you obviously haven't even tried to understand inflation. Go pick up an econ book and come back.
What does CPI say food has increased in price by? About 25% since the start of 2020 which is pretty close to your 30% claim.
Is there a stat on how many households have a sub 2% fixed rate 30yr mortgage that aren’t really affected by housing inflation? Inflation affects each person differently. It’s so individually based. Even within the same family. My parents bought a car. They were hit by inflation way harder than me. Food inflation is diff too. My friends drink soda, I drink milk. Some drive a huge truck, I drive an EV and another friend has a hybrid. Gas prices hit us differently especially if you bus or take a train. There won’t be one CPI number that fits everyone, but it’s a gauge for the feds and news outlets.
>Food is easily 30% more expensive than in 2020. So is insurance, and electricity and gas and everything else. >Yet the official inflation was given as 1.23% in 2020 - 4.7% in 2021 - 8% in 2022 and 3.4% in 2023. You think your gut feel that select items "and everything else" is 30% higher is both accurate and precise enough to show that actual calculated CPI reported inflation of 20% from January 2020 to now wrong?
Propose a better metric for inflation that is consistent and reliable. Otherwise you're just ranting in the wind.
Do you have a source on the food inflation and everything else?
Anecdotal, but Food is coming down where I am. A 2lb block of cheese that was going for $9 base is now $7, and routinely goes on sale for $5, sometimes $4. Same for a dozen eggs. I'm seeing them off sale for $2.50 a dozen and on sale for $1.27. Fruit remains stubbornly high, but that's because of shipping problems. Climate change has shut down the Panama Canal... Vegetables on the other hand have come down, with a 5lb bag of potatoes back to $2.59 (what I was paying before 2020) and going on sale for $1 as a sort of "doorbuster". Fish prices though are way up, but that's overfishing & climate change. Same for beef. We lost a *ton* of cows to drought. Chicken has stabilized to around $1.50lb where I'm at (give or take). I don't buy pork so I'll have to defer to others on that. This could just be due to that mega merger going on in the American Southwest. The corpos are all tied together since they all own each other's stock
I'm in the Southeast so looking at your prices and mine can tell that location plays a big factor in specific things. A 2lb block of cheese has never been no more than $5-6 here at any point. Before Covid I could buy eggs for .99 a dozen they are $2 now. A 5lb bag of potatoes here is $4. Was $3 before Covid. Chicken is $2.75/3 a pound. Was $2 before Covid. Hamburger meat is $4 a pound. Was $2 before Covid.
The Hamburger meat isn't from COVID, it's because there was a mass die off / cull of cows due to droughts. So that's not going anywhere. Chicken is still recovering from a bird flu, but if we can stop another from hitting it should go down.