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Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

forbes.com

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Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#171

Post by Dylan16807 »

ein0p wrote: post #52
ejstronge wrote: post #42

Earlier quoted context omitted.

> Those aren’t fancy cuts or prime grade beef. Just regular steak... I don’t know how the low income families deal with a 30% increase in their grocery bills I don't think low income families are buying steak - and price increases in luxury goods can understandably grow faster than in staples like non-steak beef.

But _all_ cuts of beef went up by a lot as far as I can tell. So did chicken, fish, and all other sources of protein. It’s not just protein though, everything across the board is on average 25-30% more expensive now than it was 3-4 years ago. A cart of foodstuffs that used to cost $100 give or take is now $130-140. This isn’t some Whole Foods kind of situation, this is a run of the mill Kroger normal people shop at

If you're comparing against 3-4 years ago, CPI says inflation was 18-21%.

So if it's actually 25-30%, that's a significant level of error but not an enormous one.

CPI says that, of those four years, almost all the inflation was in the middle two. So when it says 3.5% since last year, that's not a crazy number, it's more that it's hard to determine/remember which part of the inflation happened in exactly which month. Comparing today to 3-4 years ago is a better option for both accurate numbers and accurate memories.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#172

Post by whateveracct »

lispisok wrote: post #105
whateveracct wrote: post #71

Earlier quoted context omitted.

Also it's not hard to find cheap food at the grocery store. Whole free-range, locally grown chicken for 99c/lb is commonplace in my neck of the woods. It's the convenience/brand power stuff that is really spiked. Fast food falls into that.

Honestly, calling BS on this. The cheapest large package mass produced factory farmed chicken at my local big retailer grocery store is $2/lb. The nicer stuff is more like $5/lb.

Maybe it's because I'm in WA - a huge agricultural state. I get Draper Valley Farms whole chickens for 99c/lb on the regular. It's $2.89/lb (already a good price) when not on sale, but the sale has been happening a couple times a month like clockwork now.

The Draper Valley Farms stuff is generally cheaper than the Kroger-branded stuff, no matter the cut. Like right now, boneless thighs are 50c cheaper per lb (no sales). It's $6/lb vs $6.50/lb. Bone-in is $3.79/lb! The Kroger brand doesn't even offer that variety for some reason.

A few lbs of that + some orzo (cheap) + some staple produce (shallot, cherry tomatoes, garlic) can make you 6 very filling and delicious meals. When you compare it to fast food, the difference is staggering - definitely a divergence compared to the diff years ago. It's the convenience stuff that is truly spiking. Groceries are definitely a lower % of my income than half a decade ago.

The barrier to most people is they can't process a whole chicken.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#173

Post by whateveracct »

adriand wrote: post #124
lispisok wrote: post #105

Earlier quoted context omitted.

Honestly, calling BS on this. The cheapest large package mass produced factory farmed chicken at my local big retailer grocery store is $2/lb. The nicer stuff is more like $5/lb.

If people want cheaper food, they should eat less meat or no meat at all. It blows my mind how cheap it is to eat a vegetarian diet. Dried black beans are $1/pound. That is a lot of food for very little money! Rice is super cheap. Potatoes are super cheap. If you rely on staple vegetarian food for the bulk of your calories and then “decorate” with fresh fruits and vegetables, you can eat very well for not a lot of mo…

Heh the $1/lb isn't a lie - you can get whole chicken for as cheap as your dried beans! Just gotta pay attention to sales.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#175

Post by fragmede »

woodruffw wrote: post #110
fragmede wrote: post #80

Earlier quoted context omitted.

What did a college education cost in 1960? I would gladly trade WFH to be the one person supporting a family of 6. (Me, partner, two kids, two grandparents.) The Internet's great and all (although sometimes it seems like it was a mistake), but we're so far from 1 very average person being able to support a middle class life style for 6 people. Median income in 1960 was $5,600, which is equivalent to $60,000 today, bu…

> Which isn't a lot in the FAANG world, but the point is that a very average not-very-smart person was able to provide for that many people back then They weren't. The average household income in the 1960s (i.e., from a single breadwinner) was supporting a household of 3-4 people not 6[1][2]. The claim that you could support a family of 6 on a single breadwinner's income in 1960 and achieve anything close to 2024's q…

I mean, lower it to 4, the EPI calculator still gives $100k. Are there that many jobs paying that for someone who's pretty average in Cincinnati?

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#176

Post by chipgap98 »

tonymet wrote: post #97
ProfessorLayton wrote: post #38

Earlier quoted context omitted.

There are 153 million more people in the U.S. today than in 1963. The reason these neighborhoods are exclusive to the wealthy is that housing there is scarce despite growing demand due to job growth. Housing in places like the Bay Area is such a big portion of monthly expenses that stuff like Arby's 4 for $10 or whatever isn't whats hurting people the most. Lots of these issues just come down to housing and restricti…

95% of zips in 1963 were safe and livable. Now everyone is competing to live in 15% of zipcodes You address the supply side of the "housing crisis", what about demand?

Where are your stats on 95% of zips being safe and livable? How are you defining those?

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#177

Post by vineyardmike »

randomdata wrote: post #41
tonymet wrote: post #16

I recommend people use many different indicators to get a mental model of inflation, and you will notice that CPI does not represent inflation well. The memes of Arby’s 5 for $5 becoming 4 for $10 are more informative than the CPI numbers. Don’t let the shock at the grocery store wear off – it’s real and painful despite what the news tells you. True inflation would measure the amount of prosperity achieved per hour w…

> In other words you had 1 man working 50 hours a week afford a house... With inflation, we want to know about the change in value of the dollar only . We don't want to factor in the change in value of houses, food, etc. There is a place for understanding that too, but inflation is not it. Something like a cost of living index is more suitable to that kind of information. On that note, houses are unquestionably more…

> houses are unquestionably more valuable today…

They also have better insulation and construction, they’re all wired for electricity and plumbing, they all have advanced HVAC. Fancier kitchens with more plumbing, appliances and nicer materials. People have access to more furniture and fixtures and appliances to fill more home - no one needed laundry rooms before a washer/drier was invented. Few had garages. Don’t let survivorship bias fool you - the 1950s homes that working class families had were not that nice.

The homes today cost more because more goes into them. We could all live in stuck huts we made ourself like in 1750 and everyone could afford two houses in 2024. Instead, housing has gone up because the utility of that housing has gone up.

Oh and of course we’re not making nearly as many per-capita as we used to. So the scarcity is going up.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#178

Post by voisin »

bugbuddy wrote: post #157
4death4 wrote: post #142

Earlier quoted context omitted.

The average household also includes empty nesters and people who have moved out yet haven't started a family yet. The average number of children per family in the 60s was 2.3, which means quite a few families had 3 or 4 children.

According to our experience of the last 7 years, we should expect interest rate cuts, tax cuts, and more fiscal expansion either at the same time or in some sequence. Each of them will help solve our problem. There is no fiscal conservative left in America.

> There is no fiscal conservative left in America.

Truer words have never been spoken. Fiscal conservatism died with Reagan.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#179

Post by ctrw »

hintymad wrote: post #174

Honest question: Paul Graham said that inflation was over if we exclude food, rent, gas, and used cars. Was this his intellectually honest thinking about economy or him being partisan?

The economy is doing great if we ignore the people.

Re: Summers: Inflation Reached 18% in 2022 Using the Government's Previous Formula

#180

Post by rafaelero »

jeffbee wrote: post #34
slibhb wrote: post #4

It's interesting that consumer sentiment apparently tracks the older formula more closely. Presumably we have data that could allow us to include "the price of money" in inflation metrics, perhaps weighed based on how much the average American borrows.

Headline consumer sentiment is polluted by junk like this article. People report their personal household situation is fine and they expect it to continue being at least this good or better in 1 and 5 years. But they've heard so much shadowstats horseshit on the radio that they are compelled to stake out a negative view on the economy as a whole. In the latest UMich consumer survey majority of respondents expect thei…

Nothing you said has anything to do with the article and its proposal to incorporate interest rates into inflation. Maybe it's your type of post that should be considered polution.
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