Yes. I get that these metrics aren't always measuring the world from the view of a real person. But my income over the last few years has been tied to the official interest rate while my spending habits have stayed the same. Yet I've gone from socking away a bit every month to starting to cut back a bit as I was winding up negative every month. At least for this single person's anecdata, the official inflation rate is much lower than my real life inflation rate.
I thought the same a bit too. My conjecture is that people working in tech usually live a high-growth area, and tend to experience much higher inflation due to local growth. This also explains why younger people tend to be hitted more
Heating oil prices increasing 26% in August and September, up 74% YoY... it's going to be a horrible winter for a lot of families, mine included. Heating bills are going to be over $1k / month for a lot of the northeast. You can't budget for a 75% increase in a major expense.
A good opportunity for everyone to start thinking about improving their (current/future) home insulation - if they can afford it, that is.
For example in the EU, while good insulation has always been a given in the Nordics for obvious reasons (although modern buildings are even better!), it's only relatively recently that these topics have started to be taken more seriously in the south. Energy costs were generally affordable, and there wasn't as much focus on the environmental side of things (i.e. using energy more efficiently to reduce pollution or switching to cleaner energy sources).
Just trying to shed a positive light on all of this, even if things are gonna suck for a while.
If salaries also took the elevator, then it's a recipe for hyperinflation.
Slow wage growth is a natural check on runaway inflation.
Yes, it's cruel on an individual level, but on a macro level, we are better off.
The ideal way inflation should come down is increased capacity and/or lower government spending
I know the macroeconomics argument, but it leaves the same distaste in my brain that "trickle down economics" leave.
All I see lately is that for example macro numbers adjusted by inflation seem to tell a story of increased purchase power, but reality seems a bit.. different? dunno.
>The CPIs are based on prices of food, clothing, shelter, fuels, transportation, doctors' and dentists' services, drugs,
and other goods and services that people buy for day-to-day living.
Convenient how it doesn't also include housing cost increases, as if that's not part of day-to-day living, like we're all snails carrying our house on our back we got for free since birth, when housing costs are possibly the highest burden on most young workers now.
The people who complain about CPI do so because CPI IIRC bases "shelter" off of rental costs.
Home prices themselves aren't really used, because they're based off of interest rates, land values, and many other attributes that don't really apply to CPI. Rental costs for all of their faults, are a better measurement of month-to-month or year-to-year inflation.
So you're right. They don't really include "house" prices. But they absolutely include "housing" prices.
> The people who complain about CPI do so because CPI IIRC bases "shelter" off of rental costs.
My experience with people complaining about CPI is usually simply that the numbers don't match their feeling.
Looking at the description [1] is really interesting:
> The shelter component of the CPI includes two major items: rent of primary residence and owners' equivalent rent (OER). Rent of primary residence, or simply rent, refers to the cost of renting a place on the market. [...] OER refers to the amount of rent that a homeowner would be paid if they were renting out their own home in the market. [...] is calculated by splitting the non-recurring cost of buying a home real estate into rental payments
I got a bit tired reading [2] for more details, as it isn't even my countries CPI...
> The expenditure weight in the CPI market basket for OER is based on the following question that the CE Survey asks of consumers who own their primary residence: “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?”
Left me a bit unsatisfied, but I'll keep it at that. The followup question would be how much rent prices deviate from housing prices. I am sure that has a lot of data though.
> Convenient how it doesn't also include housing cost increases …
It does, but only urban renting. It doesn’t measure increases in housing costs for suburbs directly. In particular it does not track increases in home values or mortgage payments for new buyers based on current rates.
POTUS has been reported as saying that hes waiting for midterms to end before taking action. I see at least two more years with no rate cuts; the possibility of fuel rationing also appears to be possible in light of all the refining/logistics facilities being wantonly destroyed. Its going to be a very rough time.
> The index for food was unchanged in September, as the index for
food away from home increased 0.2 percent and the index for food at home fell 0.1 percent.
Restaurant prices are absolutely out of control. My local Chickfila is no longer wrapping cars around the parking lot. They might still be putting up good numbers via expansion but there is no way the per-store economics are trending well.
I remember when it was arguably cheaper (especially once you factor in your time) to go buy off the Taco Bell value menu. You could get a bag of burritos filled to the top for like $12. This will hardly purchase a single menu item today.
It feels like we are in some kind of fast food death spiral right now.
I eat at Taco Bell way too much, in Manhattan, and this is hogwash. I'm looking at the menu on my phone right now.
A cheesy bean and rice burrito (404 calories) is $1.49.
Not only are there no single items anywhere close to $12, there are seven combos (that include a drink) for under $12, and the most expensive ones are $13-14 (excluding group combos).
My typical order costs $8.48 with tax and includes two crunchy tacos, a beefy 5-layer burrito, cinnamon twists, and a medium drink.
Where are they shopping that prices have only risen 3.7% YoY? That does not match neither my grocery bill inflation nor product shrinkflation.
Yes. I get that these metrics aren't always measuring the world from the view of a real person. But my income over the last few years has been tied to the official interest rate while my spending habits have stayed the same. Yet I've gone from socking away a bit every month to starting to cut back a bit as I was winding up negative every month. At least for this single person's anecdata, the official inflation rate is much lower than my real life inflation rate.
They are shopping at a place with hedonic adjustment.
Have they? Or is that just your vague sense of things?
There's lots of data out there, for example: https://prices.marketreportblog.com
I thought the same a bit too. My conjecture is that people working in tech usually live a high-growth area, and tend to experience much higher inflation due to local growth. This also explains why younger people tend to be hitted more
I don't live in a high-growth area and I'm pretty sure I'm seeing way more than 3.7% inflation at the grocery store.
> CPI for All Urban Consumers (CPI-U)
And CPI is "Consumer Price Index", aka inflation measurement.
For anyone unfamiliar with the title. (Like me)
Heating oil prices increasing 26% in August and September, up 74% YoY... it's going to be a horrible winter for a lot of families, mine included. Heating bills are going to be over $1k / month for a lot of the northeast. You can't budget for a 75% increase in a major expense.
A good opportunity for everyone to start thinking about improving their (current/future) home insulation - if they can afford it, that is.
For example in the EU, while good insulation has always been a given in the Nordics for obvious reasons (although modern buildings are even better!), it's only relatively recently that these topics have started to be taken more seriously in the south. Energy costs were generally affordable, and there wasn't as much focus on the environmental side of things (i.e. using energy more efficiently to reduce pollution or switching to cleaner energy sources).
Just trying to shed a positive light on all of this, even if things are gonna suck for a while.
Climate activists rejoicing!
If only prices didn't take the elevator while salaries took the stairs.
If salaries also took the elevator, then it's a recipe for hyperinflation. Slow wage growth is a natural check on runaway inflation. Yes, it's cruel on an individual level, but on a macro level, we are better off.
The ideal way inflation should come down is increased capacity and/or lower government spending
I know the macroeconomics argument, but it leaves the same distaste in my brain that "trickle down economics" leave.
All I see lately is that for example macro numbers adjusted by inflation seem to tell a story of increased purchase power, but reality seems a bit.. different? dunno.
>The CPIs are based on prices of food, clothing, shelter, fuels, transportation, doctors' and dentists' services, drugs, and other goods and services that people buy for day-to-day living.
Convenient how it doesn't also include housing cost increases, as if that's not part of day-to-day living, like we're all snails carrying our house on our back we got for free since birth, when housing costs are possibly the highest burden on most young workers now.
Edit: I am wrong
> clothing, *shelter*, fuels,
(Emphasis mine)
> Convenient how it never tracks housing cost increases
I think that is included in shelter. I might be wrong.
Oh, my bad, I assumed that was just utilities and bills.
The people who complain about CPI do so because CPI IIRC bases "shelter" off of rental costs.
Home prices themselves aren't really used, because they're based off of interest rates, land values, and many other attributes that don't really apply to CPI. Rental costs for all of their faults, are a better measurement of month-to-month or year-to-year inflation.
So you're right. They don't really include "house" prices. But they absolutely include "housing" prices.
> The people who complain about CPI do so because CPI IIRC bases "shelter" off of rental costs.
My experience with people complaining about CPI is usually simply that the numbers don't match their feeling.
Looking at the description [1] is really interesting:
> The shelter component of the CPI includes two major items: rent of primary residence and owners' equivalent rent (OER). Rent of primary residence, or simply rent, refers to the cost of renting a place on the market. [...] OER refers to the amount of rent that a homeowner would be paid if they were renting out their own home in the market. [...] is calculated by splitting the non-recurring cost of buying a home real estate into rental payments
I got a bit tired reading [2] for more details, as it isn't even my countries CPI...
> The expenditure weight in the CPI market basket for OER is based on the following question that the CE Survey asks of consumers who own their primary residence: “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?”
Left me a bit unsatisfied, but I'll keep it at that. The followup question would be how much rent prices deviate from housing prices. I am sure that has a lot of data though.
[1] https://en.macromicro.me/charts/24/cpi-house
[2] https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
In my experience, people who complain about CPI mostly do so because they don't understand it, and it doesn't match their vague sense of reality.
This site is just reddit now.
> Convenient how it doesn't also include housing cost increases …
It does, but only urban renting. It doesn’t measure increases in housing costs for suburbs directly. In particular it does not track increases in home values or mortgage payments for new buyers based on current rates.
Highly likely there will be no rate cuts for the rest of this year. Higher for longer and the fed is going to either hold or increase interest rates.
POTUS has been reported as saying that hes waiting for midterms to end before taking action. I see at least two more years with no rate cuts; the possibility of fuel rationing also appears to be possible in light of all the refining/logistics facilities being wantonly destroyed. Its going to be a very rough time.
We are here in large part because of POTUS so what would actions after midterms have to be? Stop being himself?
Stop trying to manipulate the economy before the midterms and just let the problem play out.
No pain, no gain.
> The index for food was unchanged in September, as the index for food away from home increased 0.2 percent and the index for food at home fell 0.1 percent.
Restaurant prices are absolutely out of control. My local Chickfila is no longer wrapping cars around the parking lot. They might still be putting up good numbers via expansion but there is no way the per-store economics are trending well.
I remember when it was arguably cheaper (especially once you factor in your time) to go buy off the Taco Bell value menu. You could get a bag of burritos filled to the top for like $12. This will hardly purchase a single menu item today.
It feels like we are in some kind of fast food death spiral right now.
I eat at Taco Bell way too much, in Manhattan, and this is hogwash. I'm looking at the menu on my phone right now.
A cheesy bean and rice burrito (404 calories) is $1.49.
Not only are there no single items anywhere close to $12, there are seven combos (that include a drink) for under $12, and the most expensive ones are $13-14 (excluding group combos).
My typical order costs $8.48 with tax and includes two crunchy tacos, a beefy 5-layer burrito, cinnamon twists, and a medium drink.