US inflation means families are spending $709 more per month than two years ago • Hacker News Board

Re: US inflation means families are spending $709 more per month than two years ago

#41

Post by sarchertech » Sun, Aug 13, 2023, 7:16 PM UTC

bko wrote: post #17

What I don't understand is this 2% price target. Prices could go up 10% one year, and well call it a success if next year we "tame inflation" by only having our prices go up 2%. Why can't we target to get prices back down? For those on a fixed income, this is money we lost forever. We expect (and see) some prices go down every year (mainly electronics) and it works fine. But god forbid the price of milk goes down a b…

Between 2008 and 2018 milk prices went down from $3.80 a gallon to $2.90 [1]. So we're actually barely above 2008 prices in non-inflation adjusted dollars.

To your specific point about targeting negative inflation, that's deflation, which most people believe is bad for the economy. Even if there are types of "good deflation", government policy inentionally targeting deflation would almost definitely be a bad thing.

1. https://www.usinflationcalculator.com/inflation/milk-prices-...

Re: US inflation means families are spending $709 more per month than two years ago

#42

Post by FormerBandmate » Sun, Aug 13, 2023, 7:16 PM UTC

bko wrote: post #17

What I don't understand is this 2% price target. Prices could go up 10% one year, and well call it a success if next year we "tame inflation" by only having our prices go up 2%. Why can't we target to get prices back down? For those on a fixed income, this is money we lost forever. We expect (and see) some prices go down every year (mainly electronics) and it works fine. But god forbid the price of milk goes down a b…

People get hired off the 2% because that’s a baseline level of growth. When the economy is in deflation people will constantly get fired every year, growth basically stops, and you end up with a highly risk averse Japan-type situation.

This is a drastic oversimplification but that’s basically it

Re: US inflation means families are spending $709 more per month than two years ago

#43

Post by bluGill » Sun, Aug 13, 2023, 7:16 PM UTC

gruez wrote: post #26

qbasic_forever wrote: post #16

Earlier quoted context omitted.

There is a _LOT_ of debt being added, household debt is up to something like 17 trillion dollars from like under 10 trillion pre pandemic. IMHO vehicles are huge drivers of debt. There are almost no cars under $30k now, and the average sale price of new cars is pushing up near $50k. This is for bog standard stuff like Hondas and Fords, not luxury cars. Used cars are incredibly expensive too. People are financing cars…

>IMHO vehicles are huge drivers of debt. There are almost no cars under $30k now, and the average sale price of new cars is pushing up near $50k. This is for bog standard stuff like Hondas and Fords, not luxury cars. I went on toyota.com and a base level corolla is only selling for $22,795. This includes a "Delivery, Processing & Handling" charge of $1,095. If for whatever reason you think that driving a compact car…

That is base. How many people buy the base model?

Re: US inflation means families are spending $709 more per month than two years ago

#44

Post by silisili » Sun, Aug 13, 2023, 7:17 PM UTC

xenospn wrote: post #21

silisili wrote: post #10

Earlier quoted context omitted.

Same. I make decent money and used to save thousands per month. Now I'm lucky to stash away high hundreds a month, but any expense like new brakes wipes that out. I wonder how in the world everyone else is getting by. Maybe we're all just smiling and pretending here...

I live alone and just realized I’ve been spending $1300/month this year on groceries. For one person.

Groceries are definitely my biggest pain point today. In 2018, for a family of 3, we used to spend about $120 to $150 per week in groceries.

Justed check July, and we spent over $1400 in groceries. That's from Walmart, not Whole Foods or some such. And we're in a low to medium COL city.

Sure, we could cut back to more staple stuff(more beans, less meats) if needed, I'm just illustrating how much the price of things have increased!

Re: US inflation means families are spending $709 more per month than two years ago

#45

Post by kec » Sun, Aug 13, 2023, 7:17 PM UTC

bko wrote: post #17

What I don't understand is this 2% price target. Prices could go up 10% one year, and well call it a success if next year we "tame inflation" by only having our prices go up 2%. Why can't we target to get prices back down? For those on a fixed income, this is money we lost forever. We expect (and see) some prices go down every year (mainly electronics) and it works fine. But god forbid the price of milk goes down a b…

Deflation means a dollar tomorrow is always worth more than a dollar today meaning a rational person should strive to spend as little money today as possible. This eventually locks the entire economy up into a death spiral.

Re: US inflation means families are spending $709 more per month than two years ago

#46

Post by tmountain » Sun, Aug 13, 2023, 7:17 PM UTC

bko wrote: post #17

What I don't understand is this 2% price target. Prices could go up 10% one year, and well call it a success if next year we "tame inflation" by only having our prices go up 2%. Why can't we target to get prices back down? For those on a fixed income, this is money we lost forever. We expect (and see) some prices go down every year (mainly electronics) and it works fine. But god forbid the price of milk goes down a b…

Governments are afraid of deflation (prices going down) because consumers can go into a holding pattern (stopping spending while waiting for prices to continue to decrease) which can cause the economy to stall out.

Re: US inflation means families are spending $709 more per month than two years ago

#47

Post by xgbi » Sun, Aug 13, 2023, 7:18 PM UTC

xenospn wrote: post #21

silisili wrote: post #10

Earlier quoted context omitted.

Same. I make decent money and used to save thousands per month. Now I'm lucky to stash away high hundreds a month, but any expense like new brakes wipes that out. I wonder how in the world everyone else is getting by. Maybe we're all just smiling and pretending here...

I live alone and just realized I’ve been spending $1300/month this year on groceries. For one person.

I don’t understand how you can spend so much. Even with inflation we (family of 4, cooling all meals at home) are at less than 800€/$ per month.

And we eat meat nearly all meals.

Re: US inflation means families are spending $709 more per month than two years ago

#48

Post by syntaxing » Sun, Aug 13, 2023, 7:18 PM UTC

candiddevmike wrote: post #4

As a parent with kids, I really don't know how folks are getting by with the prices of everything. I know folks who keep eating out, buying new vehicles, and even building new houses and I'm left scratching my head wondering how they afford all of this. I'm not saving nearly as much as I was years ago and I think my "lifestyle" has decreased post COVID (few vacations, eating out is a treat, gifts are for birthdays/ho…

SAME! I barely saved this year so far and I haven’t been splurging on anything. The car I bought before the inflation burst is now 25% more now. I make good money relatively but I still feel like we’re drowning. Every grocery run is over $200 even if don’t get meat, just the fruits alone are eye watering nowadays.

Re: US inflation means families are spending $709 more per month than two years ago

#49

Post by KindAndFriendly » Sun, Aug 13, 2023, 7:18 PM UTC

gruez wrote: post #26

qbasic_forever wrote: post #16

Earlier quoted context omitted.

There is a _LOT_ of debt being added, household debt is up to something like 17 trillion dollars from like under 10 trillion pre pandemic. IMHO vehicles are huge drivers of debt. There are almost no cars under $30k now, and the average sale price of new cars is pushing up near $50k. This is for bog standard stuff like Hondas and Fords, not luxury cars. Used cars are incredibly expensive too. People are financing cars…

>IMHO vehicles are huge drivers of debt. There are almost no cars under $30k now, and the average sale price of new cars is pushing up near $50k. This is for bog standard stuff like Hondas and Fords, not luxury cars. I went on toyota.com and a base level corolla is only selling for $22,795. This includes a "Delivery, Processing & Handling" charge of $1,095. If for whatever reason you think that driving a compact car…

Currently trying to buy a Corolla Hybrid (base). The best out-the-door quote I got so far is $28.5k, the MSRP is $23k. So yes, you are looking at almost $30k for the most basic car.

Re: US inflation means families are spending $709 more per month than two years ago

#50

Post by FormerBandmate » Sun, Aug 13, 2023, 7:18 PM UTC

gruez wrote: post #26

qbasic_forever wrote: post #16

Earlier quoted context omitted.

There is a _LOT_ of debt being added, household debt is up to something like 17 trillion dollars from like under 10 trillion pre pandemic. IMHO vehicles are huge drivers of debt. There are almost no cars under $30k now, and the average sale price of new cars is pushing up near $50k. This is for bog standard stuff like Hondas and Fords, not luxury cars. Used cars are incredibly expensive too. People are financing cars…

>IMHO vehicles are huge drivers of debt. There are almost no cars under $30k now, and the average sale price of new cars is pushing up near $50k. This is for bog standard stuff like Hondas and Fords, not luxury cars. I went on toyota.com and a base level corolla is only selling for $22,795. This includes a "Delivery, Processing & Handling" charge of $1,095. If for whatever reason you think that driving a compact car…

When’s the last time you bought a car? Going to the website literally only works for Teslas