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Consumer prices increase 2.6 percent

bls.gov

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Re: Consumer prices increase 2.6 percent

#101

Post by [deleted] »

ensignavenger wrote: post #54
zaptheimpaler wrote: post #35

Earlier quoted context omitted.

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.

[deleted]

Re: Consumer prices increase 2.6 percent

#102

Post by AnimalMuppet »

ajmurmann wrote: post #90
novalis78 wrote: post #30

It does make for a somber website visit, when one frequents the Chapwood Index and starts contemplating about all of it including the consequences for the poorest of the poor, who are trapped: https://www.reddit.com/r/PersonalFinanceCanada/comments/kr1k... (the original site seems to be down at the moment)

Doesn't inflation affect wealthy people more, since any cash they have would go down in value? If it's true inflation income should go up with it.

Income goes up after it. Inflation hits, and then later your income goes up. That hurts. The closer you are to the edge, the more it hurts.

Re: Consumer prices increase 2.6 percent

#103

Post by gruez »

MontyCarloHall wrote: post #94
ahahahahah wrote: post #59

Earlier quoted context omitted.

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.

Yes they do: https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf

that says quality adjustments, not hedonic adjustments.

Re: Consumer prices increase 2.6 percent

#104

Post by ffdhghggg »

ajmurmann wrote: post #90
novalis78 wrote: post #30

It does make for a somber website visit, when one frequents the Chapwood Index and starts contemplating about all of it including the consequences for the poorest of the poor, who are trapped: https://www.reddit.com/r/PersonalFinanceCanada/comments/kr1k... (the original site seems to be down at the moment)

Doesn't inflation affect wealthy people more, since any cash they have would go down in value? If it's true inflation income should go up with it.

Wealthy people do not own much cash. Wealthy people own assets. The poor also do not have much cash, they consume goods to live.

Inflation increases the value of assets relative to consumption. Inflation increases the gap between the wealthy and the poor.

Deflation reduces the value of assets and makes consumption more affordable. Deflation reduces the gap between the wealthy and the poor.

Re: Consumer prices increase 2.6 percent

#105

Post by chiefalchemist »

gruez wrote: post #96
thepasswordis wrote: post #92

In other news, the chocolate ration has been increased to 25 grams! Great success! /s Anybody living in the world can tell you that consumer prices are up a lot, lot more than 2.6%. Look even at this very thread. Food prices are way up, lumber prices are way up, restaurant prices are way up, clothing costs are up. Lots of goods literally just seem unbuyable at this point. Even in my city (nowhere near the southeast)…

>Anybody living in the world can tell you that consumer prices are up a lot, lot more than 2.6%. Look even at this very thread. Food prices are way up, lumber prices are way up, restaurant prices are way up, clothing costs are up. who knew that if you cherrypick from a list of items rather than using a broad basket, you can get arbitrarily higher/lower averages?

Yes and no. If these (e.g., food) are the things most people consume most of the time that's not cherry picking. Furthermore, consumer perception does matter. It does have impact - even if it's misperception.

Gas is up. That's naturally going to increase cost of nearly everything that depends on that mode of transportation. Certainly, that's directly or indirectly just about everything.

Re: Consumer prices increase 2.6 percent

#106

Post by throw0101a »

JohnJamesRambo wrote: post #48
nkozyra wrote: post #43

Earlier quoted context omitted.

The Anecdotal Price Index is historically less accurate than CPI.

Or has the CPI been fudging the numbers for a very long time? https://www.forbes.com/sites/perianneboring/2014/02/03/if-yo... with-the-cpi/ And this article is 7 years old, I can't imagine Perianne's reaction to the current M2 money supply of 20 trillion, almost double the 10 trillion when she wrote it in 2014. https://fred.stlouisfed.org/series/M2SL Seems like yet another example of Goodhart's Law. "When a measure b…

> https://fred.stlouisfed.org/series/M2SL

And velocity (V) has dropped off a cliff:

* https://fred.stlouisfed.org/series/M2V

* https://en.wikipedia.org/wiki/Money_supply#Link_with_inflati...

Re: Consumer prices increase 2.6 percent

#107

Post by ragnese »

MontyCarloHall wrote: post #70
ensignavenger wrote: post #54

Earlier quoted context omitted.

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.

Indeed. A 2021 Accord is far superior to a 1990 Rolls Royce or other ultraluxury car in terms of amenities, engine power, quietness, build quality, etc. That’s not even mentioning the leaps and bounds in efficiency and safety. I’d argue cars have gotten effectively cheaper over the years, as they’ve dramatically improved in every respect. If you could still buy a 1990 Accord manufactured today, it would probably sell…

Tangentially, wouldn't it be nice if we could buy a 1990-quality car for the inflation-adjusted price? Poor(ish) people would have a decent shot at actually affording reliable transportation and climbing up the ladder.

Re: Consumer prices increase 2.6 percent

#108

Post by dewlinedew2 »

ellipsisfrog wrote: post #31
notyourday wrote: post #3

Anyone who has been to a supermarket in the last 12 months knows that the 2.6 percent increase in consumer prices is observably not true. I buy the same basket of the generic products ( chicken quarters, produce, beef, eggs, bacon, dairy products ) . Compared to this time in 2020 I'm spending at least 20% more. People who buy processed food(s) are spending at least 30% more.

You are being downvoted but this is also my experience. My grocery bill is up more than 15% like for like (I shop exclusively online so it's easy to track) and more than that in total because of volume increases. My utility rates are up >10%. Housing costs are way up where I live. I would guess my overall baseline cost of living is up at least 10% when you remove the impact from lower commuting and eating out costs.

Watch out for downsizing of the containers too

Re: Consumer prices increase 2.6 percent

#109

Post by drewcon »

henriquez wrote: post #61
drewcon wrote: post #50

Earlier quoted context omitted.

“The real cost of goods is observably higher”? I don’t get how anecdotal evidence trumps repeatedly buying and measuring the cost of a vast cross section of products everyday people consume? Help me understand the conspiracy here? Who is doing the rigging and how?

The Fed and U.S. government are rigging our economic system to backdoor tax the middle class while gaslighting all of us into thinking that this is normal. You don’t print $10T and handwave away millennia of basic economic principles. Help me understand how CPI is not a joke with respect to how it’s used to say “this is normal.” Everything I’m interested in spending money on, new hires for my company, real estate, ca…

But no one is “selling” you anything here. CPI is just data with a very public methodology. Some things go up, others go down. The Fed uses it as one input in decision making to manage inflation over long time horizons.

You can look at what is measured in CPI and how it’s measured. You can have a conversation about whether that’s the most precise way to measure inflation etc. but just waving your hands about your “lived experience” and making allusions to a conspiratorial “they” doesn’t pass for analysis.

Show your work. What is the motive here for the “Fed and U.S. government are rigging our economic system to backdoor tax the middle class while gaslighting all of us into thinking that this is normal”? How do they do it? What’s in it for them? I’m genuinely curious how you get there from looking at CPI.

Re: Consumer prices increase 2.6 percent

#110

Post by MontyCarloHall »

gruez wrote: post #103
MontyCarloHall wrote: post #94

Earlier quoted context omitted.

Yes they do: https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf

that says quality adjustments, not hedonic adjustments.

Aren’t “quality adjustments” by definition “hedonic adjustments”? How are these not hedonic adjustments? From the linked PDF:

“BLS adjusts for structural and engineering quality changes such as:

• Changes that affect the safety of occupants of the vehicle as mandated by legislated federal or state standards, and for purposes of IPP export items, applicable foreign market standards. Changes in safety features not required by legislated standards will be evaluated on a case-by-case basis.

• Changes in mechanical or electrical features that affect the overall operation or efficiency of the vehicle, or the ability of a component to perform its function, such as changes affecting steering, braking, stability, engine horsepower, traction control, transmission, battery life, and fuel systems and/or electrical systems.

• Changes in design or materials that affect the length of service, durability, need for repairs, or strength or performance of the item, such as stronger bumpers, HID headlamps, flexible body panels, platinum-tipped spark plugs, or warranty changes.

• Changes that affect comfort or convenience, if supported by evidence of a functional or software improvement, such as redesigned seat belts, remote door locks, theft deterrent systems, navigation and communication systems, satellite radio hardware, drive assist systems, backup cameras, sensors or changes in storage capacity.”

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