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Consumer prices increase 2.6 percent

bls.gov

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Re: Consumer prices increase 2.6 percent

#51

Post by namdnay »

zaptheimpaler wrote: post #35
blsapologist42 wrote: post #23

Earlier quoted context omitted.

Cars are included in the CPI. Don't spread FUD. https://www.bls.gov/cpi/factsheets/new-vehicles.htm

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.

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.

Re: Consumer prices increase 2.6 percent

#52

Post by a-posteriori »

frankbreetz wrote: post #22

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.

Is the inflation rate transitory or is the price level fluctuation transitory? Makes a big difference...

Re: Consumer prices increase 2.6 percent

#53

Post by [deleted] »

drewcon wrote: post #17
ardit33 wrote: post #12

Earlier quoted context omitted.

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

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]

Re: Consumer prices increase 2.6 percent

#54

Post by ensignavenger »

zaptheimpaler wrote: post #35
blsapologist42 wrote: post #23

Earlier quoted context omitted.

Cars are included in the CPI. Don't spread FUD. https://www.bls.gov/cpi/factsheets/new-vehicles.htm

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.

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.

Re: Consumer prices increase 2.6 percent

#55

Post by throwawaysea »

Der_Einzige wrote: post #44
JohnJamesRambo wrote: post #29

Earlier quoted context omitted.

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

Construction related stuff is way up right now everywhere due to the housing / renovation boom.

The housing boom is itself an effect of the current fiscal policy. Housing also tends to attract investment when inflation is happening.

Re: Consumer prices increase 2.6 percent

#56

Post by 542458 »

zaptheimpaler wrote: post #35
blsapologist42 wrote: post #23

Earlier quoted context omitted.

Cars are included in the CPI. Don't spread FUD. https://www.bls.gov/cpi/factsheets/new-vehicles.htm

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.

“Car prices are not evaluated in a way I agree with” is a very different argument from “Cars prices aren’t evaluated at all”.

Re: Consumer prices increase 2.6 percent

#57

Post by fanciestManimal »

a-posteriori wrote: post #37
blsapologist42 wrote: post #23

Earlier quoted context omitted.

Cars are included in the CPI. Don't spread FUD. https://www.bls.gov/cpi/factsheets/new-vehicles.htm

Why is questioning the CPI methodology FUD?

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.

Re: Consumer prices increase 2.6 percent

#58

Post by snarf21 »

nostromo wrote: post #7

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 pay…

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.

Re: Consumer prices increase 2.6 percent

#59

Post by ahahahahah »

zaptheimpaler wrote: post #35
blsapologist42 wrote: post #23

Earlier quoted context omitted.

Cars are included in the CPI. Don't spread FUD. https://www.bls.gov/cpi/factsheets/new-vehicles.htm

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.

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.

Re: Consumer prices increase 2.6 percent

#60

Post by koboll »

nostromo wrote: post #42
chickenpotpie wrote: post #10

Earlier quoted context omitted.

I'm going to believe the massive study over your single data point

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.

What a surprise that this comment thread is full of software developers in HCOL areas anecdotally seeing prices rise faster than the national average!
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