Earlier quoted context omitted.
I don’t think anyone was saying it was misleading, rather they were pointing at a nuance of the data.
> It seems misleading (from the comment I directly replied to)
[deleted]
US annual inflation declines to 7.7% in October vs. 7.9% expected
421–430 of 566 posts
Re: US annual inflation declines to 7.7% in October vs. 7.9% expected
#422Earlier quoted context omitted.
Worse than 2008, got it.
I am not sure that we can predict how bad a recession will be based on inflation.
Some claim you can:
"The historical evidence indicates that when inflation is as high as it is today, and the unemployment rate is as low as it is today, the probability of a recession over the next one and two years is extraordinarily high"
source: https://www.hks.harvard.edu/sites/default/files/centers/mrcb...
Re: US annual inflation declines to 7.7% in October vs. 7.9% expected
#423Earlier quoted context omitted.
Sigh. The YoY is useful for businessmen and economists. People aren't checking their statements for milk prices from Nov 2021 right now. They just know "man it jumped up". The point is that the everyday person cares about jumps and trends, and hearing "20% YoY increase" for 12 months is misleading to someone not thinking about it in economists' terms. The fact a bunch of people here are debating what it means and how…
And yet that's the same kind of distinction that you need to understand to be able to make decisions about household debt. If we're honestly at the point where this is considered too confusing for the masses, I think I've stopped thinking democracy is a good idea.
If there's a true step change that happens once (and nothing else), inflation looks like:
0% 0% 0% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% 0% 0% 0%
If there's a .8% price increase per month, every month, it looks like:
+10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10%
The upside of reporting this way:
* Seasonal effects are (mostly) removed
The downside:
* You have to have a lot of context about surrounding numbers to try and distinguish between these scenarios.
* The drop from +10% to 0% is not related proximally at all to the real change.
* Even if you are careful in interpretation, information and context are removed.
It's not very user friendly or useful as a single number to get an idea about what's happening with prices now.
> If we're honestly at the point where this is considered too confusing for the masses, I think I've stopped thinking democracy is a good idea.
I have a lot of knowledge about economics and mathematics, and it's frequently confusing for me and difficult to tease out what's really happening with prices from a couple of macroeconomic aggregates. If that makes you give up on democracy, uh, so be it.
Re: US annual inflation declines to 7.7% in October vs. 7.9% expected
#424Re: US annual inflation declines to 7.7% in October vs. 7.9% expected
#425Reminds me of Nixon's "the rate of increase of inflation is going down" comment and the associated quip that it was "the first time a sitting president used the third derivative to advance his case for reelection."
Which is interesting because Nixon pressured official to make "cheap money" :
https://www.investopedia.com/articles/economics/09/1970s-gre...
Re: US annual inflation declines to 7.7% in October vs. 7.9% expected
#426Earlier quoted context omitted.
And you’d be a sucker for not taking tax credits the government has legally granted you. It’s the governments fault for making terrible loans and forcing taxpayers to absorb the risk. Don’t be mad at people for receiving…be mad the government is offering!
My partner and I make $420k gross. it's ridiculous the government is offering us another $20k because we graduated school in the last 2 years. still going to take it, of course, but simply bad policy.
Making $420k with student loans is a pretty clear edge case, and we often find that trying to means-test these sorts of things winds up making things worse, not better.
Re: US annual inflation declines to 7.7% in October vs. 7.9% expected
#427Earlier quoted context omitted.
Nope. You are continually overlaying data with different X axis and trying to draw conclusions and sound authoritative and it’s just sloppy and irresponsible. The instantaneous slope would be negative if the last month happened to observe a slight decrease, true. But the slope of the line between last year and this year would be positive. Both statements can be true: 1. prices just fell slightly since last month 2. p…
Same x axis - time. CPI is a time series, you get a point every month. Everyone is trying to draw conclusions, it's the point of this thread. >> The instantaneous slope would be negative if the last month happened to observe a slight decrease, true This is sloppy. It's fine, it's a forum, we aren't writing academic papers. Nobody is trying to figure the slope of the straight line between the two points, that's what i…
Sigh. Obviously we’re talking time here. The scale on the X axis, the interval that appears on the graph between two points, is different if every unit is a month vs a year. Months and years are different units of time.
IDK… nobody is really trying to figure out how to interpret the data. People were just commenting that “declines to X%” actually still means that it’s gone up YoY and not that it’s declining YoY and here you are yelling that actually it is declining because recently it went down. Which is false, YoY.
Re: US annual inflation declines to 7.7% in October vs. 7.9% expected
#428It bears repeating because this is a common mistake in inflation discussions: a decrease in inflation metrics means price increases are slowing down, it doesn’t mean that prices are going down （that would require a negative CPI print). Also, this number is year over year, so the decrease just means the price increases between Oct 21 and Oct 22 are not as steep as between Sept 21 to Sept 22, which is not hard to achie…
And to add to your explanation, because inflation jumped so quickly and then slowed we'll eventually hit a YoY number that plummets. If milk is $4/gallon today and still $4/gallon 12 mos. from now, that's 0% YoY inflation. This will inevitably lead to people saying the numbers are fake because milk used to be $2/gallon.
@matwood it is a disaster for working people regardless as wages are not keeping pace with the effects of inflation.
Re: US annual inflation declines to 7.7% in October vs. 7.9% expected
#429Earlier quoted context omitted.
Inflation linked government bonds from developed countries and your local currency or USD/EUR denomination, depending on your country you may get some tax advantages if you buy local ones. But you should probably have done this long ago, now it may be a bit late.
While that is better than nothing, for example US citizens are limited to only $10K USD in I-bond purchases per year per Taxpayer ID Number (TIN). Some people run their I-bond purchases through LLC's they control as well, but I don't know how the IRS would treat a fleet of LLC's set up purely just to get a TIN to use for buying I-bonds. Oil and copper tends to follow inflation, but they're highly volatile so you can'…
There's no need for byzantine approaches to buying Series I savings bonds when you can get 1.5% real yields on TIPS.
Re: US annual inflation declines to 7.7% in October vs. 7.9% expected
#430Earlier quoted context omitted.
I've never once grabbed a coke because of seeing a commercial. And I barely drink it because I have enough sugar in my life and don't want my kids chugging soda all day long like I did as a kid. So I do see your point, I just don't get how that influences people. But again, I recognize it must to enough of a degree- I just don't feel like I'm one of them so it's hard to personally understand. Maybe I am, but I think…
The only reason you’ve ever drank a coke is because of these ads. Do you think you’re immune to ads? Or that ads don’t work at all? I think it’s reasonable that you’ve never seen an ad and consciously bought a coke, but that’s rarely the point of coke. We’re not aware of all our subconscious motivations. I’d like to be, but it’s usually pretty hard for me to understand why I do things at a deep level.
> The only reason you’ve ever drank a coke is because of these ads.
This isn’t true in all cases. When I first drank a coke I was very young and wasn’t even aware of advertising. The first coke I drank was because my parents took me to McDonalds and that’s all they sell. Then I found I preferred it over Pepsi. Advertising had very little to do with my first coke, it was more contracts with fast food companies.