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Consumer prices increase 2.6 percent

bls.gov

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Re: Consumer prices increase 2.6 percent

#131

Post by missedthecue »

xendipity wrote: post #9
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.

Read a bit more and you'll find > Prices for food at home increased 3.3 percent over the past 12 months. All six major grocery store food group prices advanced over the period, with increases ranging from 1.6 percent (dairy and related products) to 5.4 percent (meats, poultry, fish, and eggs). Prices for food away from home rose 3.7 percent, as the 6.5-percent advance in prices for limited services meals was the larg…

I think he is asserting that the CPI is manipulated to the downside. Trying to refute his point with CPI numbers is like quoting Bible verses to an atheist.

Re: Consumer prices increase 2.6 percent

#132

Post by _dps »

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…

I think a very large number of people (myself included) would rather drive a 1990 Rolls Royce than a 2021 Accord, all else equal. I drove a 1990 BMW well into 2010 and I would very certainly take that car (in new condition) over a 2021 Accord today.

Re: Consumer prices increase 2.6 percent

#133

Post by throwaway9870 »

I have never seen anything like this in manufacturing. Steel prices are double if you can find it at all. Plastic molders are operating under force majeure due to TX weather a few months back. Electronic assembly parts are in short supply and some, such as STM32 processors are almost impossible to find (such as variant for brushless controllers). One wire forming vendor we have worked with for over 20yrs cancelled our POs and said they can't even discuss when they might be able to work with us again because they don't have labour or raw materials.

The damage being done in manufacturing right now dwarfs anything from last year.

Re: Consumer prices increase 2.6 percent

#134

Post by missedthecue »

notyourday wrote: post #73
koboll wrote: post #60

Earlier quoted context omitted.

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

Most of the population lives in the urban high cost of living areas.

The top 300 biggest cities in the US are home to only ~20% of the population.

Re: Consumer prices increase 2.6 percent

#135

Post by randomopining »

hourislate wrote: post #126

They are doing everything they can to inflate. They have basically spent over 20 trillion in the last 2 decades fighting deflation and have little to show for it. The reckoning is coming and there is nothing they can do to stop it. Over half of employable Americans will be without work, corporations will require less and less people. Every industry and every corner of the economy will feel it. We are probably no more…

Yeah realistically most people will be worthless lol. Even myself as a mid-level Java engineer.

They needed and need to invest heavily in education. Incentivize in-demand careers. Silly majors like gender studies, you pay your own way.

Re: Consumer prices increase 2.6 percent

#136

Post by vkou »

danhak wrote: post #45
vkou wrote: post #4

Earlier quoted context omitted.

I think what they wanted is for the economy to not implode, with millions of people either dead to the virus, or newly homeless because they are broke.

Could you please expand on how keeping interest rates artificially depressed, causing the prices of homes to skyrocket, advances the goal of preventing homelessness?

You don't become homeless when you can't afford to buy a house. You become homeless when you can't afford rent (or your regular fixed-rate mortgage payment).

Rent is largely divorced [1] from house prices, and is largely driven by the amount of money people have after they get their paycheck, and subtract bills, gas and groceries from it. In a tight market, your landlord will take everything that's left from you. In a loose market, your landlord will only be able to charge you maintenance + his mortgage interest payments.

The best way to create a lot of homeless people really quickly is to have renters stop going to work, causing them to miss rent payments. The various stimulus and unemployment benefits cause some amount of main street inflation (increases in the cost of a basket of goods), but have also kept people in their apartments.

[1] Home prices in many metro areas are skyrocketing at the moment, but rents are falling.

Re: Consumer prices increase 2.6 percent

#137

Post by floxy »

MontyCarloHall wrote: post #110
gruez wrote: post #103

Earlier quoted context omitted.

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 requ…

The U.S. BLS differentiates between "hedonic" and other quality adjustments:

https://www.bls.gov/cpi/quality-adjustment/questions-and-ans...

   3. What items in the CPI are hedonically adjusted?
    
    The CPI uses hedonic quality adjustments in item categories that tend to experience a high degree of quality change either due to seasonal changes, as in apparel items, or because of innovative improvements and technological changes, as in consumer appliances and electronics.
New and used car purchases (TA011 and TA021) use "Cost based adjustments"

https://www.bls.gov/cpi/quality-adjustment/home.htm

Re: Consumer prices increase 2.6 percent

#138

Post by throw0101a »

prichino wrote: post #87
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 inflation has been tampered with quite a bit over the years. It's how you explain how the avg American is much poorer than his parents. I.e. in real terms, as in being able to buy: quality food, quality car, quality house (what? renting? no, not the same) I like this website as it uses the older methodology which has been twice updated it seems: http://www.shadowstats.com/alternate_data/inflation-charts

I replied to your other comment about Shadowstats, but will basically repeat the post:

They simply take the official BLS and add a constant. They say so themselves:

> Responding to prior criticisms made by economist James Hamilton, John Williams explained in a private phone call that Shadowstats does not actually recalculate BLS data, rather, the Shadowstats CPI merely adds a constant to the officially reported numbers.[25]

* https://en.wikipedia.org/wiki/Shadowstats.com

The number at that site will always be higher than the BLS number because the people who run that site simply think it should be higher so they make it higher in an arbitrary fashion. They publish no methodology to recreate their number or say why the x they add was chosen.

If you look at the graph their number and the official BLS number is always different by the exact same amount. And has been for years.

Whereas if you want to examine what BLS is doing you can download code:

* https://en.wikipedia.org/wiki/MIT_Billion_Prices_project

Re: Consumer prices increase 2.6 percent

#139

Post by scruple »

nostromo wrote: post #25
rwcarlsen wrote: post #18

Earlier quoted context omitted.

Yeah 2x4's are literally 4x what they were just over a year ago. And I couldn't find an architect to help me with my house this spring at any price.

Lumber is so expensive now, I fear it's going to worsen the housing shortage and increase the cost of existing homes. I know a small developer trying to build townhouses and he's unable to source the lumber needed at any price.

Some anecdata from a neighbor who works for Lennar... The Lennar Corporation is still buying up property with plans to develop "in the future" but they are not going to be moving forward with most of their development plans for this year and next. She is actually worried about losing her job in the next 6 months because of the way things are moving in that world.

Re: Consumer prices increase 2.6 percent

#140

Post by gruez »

katmannthree wrote: post #95
u320 wrote: post #82

Earlier quoted context omitted.

> Like you said, if you at food, healthcare, education, etc., they are up way more than 3% year over year. That's how averages work

The greater point is that the cost of essentials has skyrocketed but the effect is hidden in official inflation metrics because they include a large number of nonessential items such as utility-adjusted television prices.

A large number perhaps, but the weight assigned to them is low. Food, housing, and transportation makes up 72.77% of the CPI, whereas televisions only make up 0.091% of the CPI.
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