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The USA Inflation Rate by Truflation Is 4.21%

truflation.com

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Re: The USA Inflation Rate by Truflation Is 4.21%

#41

Post by PragmaticPulp »

Sad90sNerd wrote: post #11

There is no way that matches reality, where does the person publishing such a chart even live? Do they buy eggs or pay rent? Here is a real alternative - John William's shadow stats. He simply measures inflation as the government used to in the 80s and 70s, and surprise surprise its more like 10% or 14% - no phony "Owner's equivalent rent". http://www.shadowstats.com/alternate_data/inflation-charts

> John William's shadow stats. He simply measures inflation as the government used to in the 80s and 70s, and surprise surprise its more like 10% or 14%

I don’t understand how anyone who knows about basic compound growth can take this seriously.

10% annual inflation from 1970 would mean prices have increased by 150X since 1970.

That would mean houses would have cost a couple thousand dollars and a dozen eggs would have been about four cents.

And that’s only using the lower 10% estimate, not the higher 14% estimate. It’s obviously not even close to reality.

It’s a quack website that can’t even hold up to the most basic scrutiny.

Re: The USA Inflation Rate by Truflation Is 4.21%

#42

Post by fullshark »

PragmaticPulp wrote: post #32
paxys wrote: post #17

What exactly is "Truflation", and why should I give them any more credence than the hundreds/thousands of other independent economic analyses out there?

> Truflation is the first true US inflation index based on the independent data sources and metrics created by developers and crypto investors for developers and the crypto community. I gave up before I could find details about their sources. Too many Blockchain Buzzwords to invest much time into reading more.

I tried to find the actual sources and failed, all I could see was:

> we are sourcing from as many daily price providers as we can while others updates once a week or once a month.

No information about who the price providers are, and the coverage these higher frequency data streams provide v. what they use traditional BLS inflation sources for.

Re: The USA Inflation Rate by Truflation Is 4.21%

#43

Post by lend000 »

baxtr wrote: post #25

This makes sense. It has been one years since the war started which was the leading cause of inflation. Now with the first year passed, we compare today’s prices to after war prices a year ago, which were already high. I’m expecting the rate go down further the next months. EDIT: of course I’m not suggesting inflation started on the day bullets started flying. Things were heating up before with Russia slowing down ex…

> the war started which was the leading cause of inflation.

Inflation was 7.5% and trending upwards a month before the invasion, so your supposition is incorrect [0].

[0] https://www.bls.gov/regions/mid-atlantic/data/consumerpricei...

Re: The USA Inflation Rate by Truflation Is 4.21%

#44

Post by jfengel »

ghayes wrote: post #15
arcticbull wrote: post #7

Earlier quoted context omitted.

There's a lot of different ways to measure inflation. This is based on their own methodology and white paper ( https://truflation.com/methodology/ ) which I have yet to review. It's almost certainly not "something to gain" but instead just different weights, different sources, different approach.

Theoretically isn’t the 2% target based on the BLS numbers for inflation? Thus, if we wanted to compare, the “Truflation target” might be more like 1% then? It’s weird to change the method but keep the arbitrary target.

The 2% target is rather arbitrary, and is independent of the measurement method. Both the target and all of the metrics are trying to capture the intuitive, handwavey notion of "a healthy economy".

So they don't put too much stress on that 2% number. If the number were at 1.9% or 2.1%, they'd assume it's all in the margin of error. If it gets below 1% or above 4% for a while, they apply some tools in the direction of 2%, but not trying to overshoot.

Re: The USA Inflation Rate by Truflation Is 4.21%

#45

Post by theRealMe »

baxtr wrote: post #25

This makes sense. It has been one years since the war started which was the leading cause of inflation. Now with the first year passed, we compare today’s prices to after war prices a year ago, which were already high. I’m expecting the rate go down further the next months. EDIT: of course I’m not suggesting inflation started on the day bullets started flying. Things were heating up before with Russia slowing down ex…

Inflation was here before the war started. Inflation hit 5.0% in May of 2021. It was already 7.9% in Feb of 2022 when the war started.

Re: The USA Inflation Rate by Truflation Is 4.21%

#47

Post by nradov »

Sad90sNerd wrote: post #23
tenebrisalietum wrote: post #14

Earlier quoted context omitted.

Things other than inflation can cause prices of specific XYZ to rise. Wasn't there some bird flu thing that constrained the egg supply? Rent and housing costs were going up before the pandemic. Add this to the existing inflation and it's bad, esp. for housing costs.

Ok, if you were the government and I asked you to measure rent increases - what would you do? Would you look at the cost of renting on average in a city and compare them to last years? Seems like the most obvious way... Well, that is not how the government does it now. It currently uses a metric called "owner's equivalent rent". Where instead they call up people who own there houses and ask them how much they would r…

The BLS uses both actual rents and owner's equivalent rents as components of the overall Consumer Price Index inflation calculation.

https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...

Re: The USA Inflation Rate by Truflation Is 4.21%

#48

Post by dragonwriter »

Sad90sNerd wrote: post #23
tenebrisalietum wrote: post #14

Earlier quoted context omitted.

Things other than inflation can cause prices of specific XYZ to rise. Wasn't there some bird flu thing that constrained the egg supply? Rent and housing costs were going up before the pandemic. Add this to the existing inflation and it's bad, esp. for housing costs.

Ok, if you were the government and I asked you to measure rent increases - what would you do? Would you look at the cost of renting on average in a city and compare them to last years? Seems like the most obvious way... Well, that is not how the government does it now. It currently uses a metric called "owner's equivalent rent". Where instead they call up people who own there houses and ask them how much they would r…

> Ok, if you were the government and I asked you to measure rent increases - what would you do? Would you look at the cost of renting on average in a city and compare them to last years? Seems like the most obvious way... Well, that is not how the government does it now.

Except, in fact, it actually is how they do the rent portion of CPI. (Well, its not city rent averages, they do same-unit rent changes and average those.)

> It currently uses a metric called "owner's equivalent rent".

No, OER is used for...OER. Rent is used for rent. They are two separate subcomponents of the housing component of CPI.

More complete description:

https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...

Re: The USA Inflation Rate by Truflation Is 4.21%

#49

Post by gruez »

ak_111 wrote: post #40
onlyrealcuzzo wrote: post #38

Earlier quoted context omitted.

> I am wondering what is the current stat of the art to capture such hidden inflation The Fed's measure of inflation is supposed to include this.

how do they track/quantify decline in service quality as in the two scenarios I mentioned (restaurant cleaning less?)

example: https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf

Also, it's not active for all categories. In the restaurant example from the parent post, it wouldn't be counted because that category has no quality adjustment applied.

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

Re: The USA Inflation Rate by Truflation Is 4.21%

#50

Post by jfengel »

0xDEF wrote: post #4

The US government claims it's 6.0%. What does the US government gain by reporting a higher inflation rate?

The government's goal is to use the same metric repeatedly. It doesn't matter whether it's higher or lower than some other metric. They only care about how it is compared to last month and last year, so they can make decisions about next month and next year.

They know that 6% is too high, so they'll keep trying to push inflation down. They'd do roughly the same if it were 4%; the margins of error are too large to distinguish.

If the number were 1% that would raise eyebrows, and you'd wonder if one metric or the other was a failure. Same if the number were 15%.

But no economist is worrying too much about somebody else going "... but it's really 4%". Especially if they don't have a track record for that number.

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