Consumer prices increase 2.6 percent • Hacker News Board

Re: Consumer prices increase 2.6 percent

#111

Post by gruez » Tue, May 11, 2021, 10:29 PM UTC

chiefalchemist wrote: post #105

gruez wrote: post #96

Earlier quoted context omitted.

>Anybody living in the world can tell you that consumer prices are up a lot, lot more than 2.6%. Look even at this very thread. Food prices are way up, lumber prices are way up, restaurant prices are way up, clothing costs are up. who knew that if you cherrypick from a list of items rather than using a broad basket, you can get arbitrarily higher/lower averages?

Yes and no. If these (e.g., food) are the things most people consume most of the time that's not cherry picking. Furthermore, consumer perception does matter. It does have impact - even if it's misperception. Gas is up. That's naturally going to increase cost of nearly everything that depends on that mode of transportation. Certainly, that's directly or indirectly just about everything.

All of that sounds like the availability heuristic in play. You buy groceries and fill up your car every week, but those two only make up 15.157% and 2.875% of the CPI respectively. If those went up 100% and everything stayed the same, you might conclude that inflation is 80-100%, even though the CPI would only be up 18%.

Re: Consumer prices increase 2.6 percent

#112

Post by AnimalMuppet » Tue, May 11, 2021, 10:30 PM UTC

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?

The price of homes skyrockets. The interest on loans craters. The monthly payments stay the same. This is because the demand curve on buying houses is sensitive to the monthly payment, not the total price. So it all evens out...

... until you need the down payment. Then the higher prices/lower interest rates combo locks people out. It especially locks out first-time buyers.

Re: Consumer prices increase 2.6 percent

#113

Post by [deleted] » Tue, May 11, 2021, 10:30 PM UTC

thepasswordis wrote: post #92

In other news, the chocolate ration has been increased to 25 grams! Great success! /s Anybody living in the world can tell you that consumer prices are up a lot, lot more than 2.6%. Look even at this very thread. Food prices are way up, lumber prices are way up, restaurant prices are way up, clothing costs are up. Lots of goods literally just seem unbuyable at this point. Even in my city (nowhere near the southeast)…

[deleted]

Re: Consumer prices increase 2.6 percent

#114

Post by Sparkle-san » Tue, May 11, 2021, 10:30 PM UTC

chiefalchemist wrote: post #105

gruez wrote: post #96

Earlier quoted context omitted.

>Anybody living in the world can tell you that consumer prices are up a lot, lot more than 2.6%. Look even at this very thread. Food prices are way up, lumber prices are way up, restaurant prices are way up, clothing costs are up. who knew that if you cherrypick from a list of items rather than using a broad basket, you can get arbitrarily higher/lower averages?

Yes and no. If these (e.g., food) are the things most people consume most of the time that's not cherry picking. Furthermore, consumer perception does matter. It does have impact - even if it's misperception. Gas is up. That's naturally going to increase cost of nearly everything that depends on that mode of transportation. Certainly, that's directly or indirectly just about everything.

Oil is still under $70 a barrel though. It's gone up since being at some historical very low prices but compared to the times it's been north of $100, especially if you factor for 2021 dollars.

Re: Consumer prices increase 2.6 percent

#115

Post by throw0101a » Tue, May 11, 2021, 10:32 PM UTC

prichino wrote: post #83

JohnJamesRambo wrote: post #48

Earlier quoted context omitted.

Or has the CPI been fudging the numbers for a very long time? https://www.forbes.com/sites/perianneboring/2014/02/03/if-yo... with-the-cpi/ And this article is 7 years old, I can't imagine Perianne's reaction to the current M2 money supply of 20 trillion, almost double the 10 trillion when she wrote it in 2014. https://fred.stlouisfed.org/series/M2SL Seems like yet another example of Goodhart's Law. "When a measure b…

Oh lookie, someone has been calculating the numbers using the old methodology. We are much poorer than we thought. http://www.shadowstats.com/alternate_data/inflation-charts

> Oh lookie, someone has been calculating the numbers using the old methodology.

They have been doing no such thing. They have not put any effort into "calculating" anything. 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 think it should be higher. They publish no methodology to recreate their number. Whereas if you want to look at what BLS is doing you can download code:

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

Also, the official Shadowstats.com report costs $175 today (2021-05-11). However:

> Shadowstats doesn’t come cheap: currently, an annual subscription costs $175.

> Six years ago, an annual subscription cost … $175.

* https://krugman.blogs.nytimes.com/2012/08/25/another-alterna...

$175. Huh. Where's that inflation?

Re: Consumer prices increase 2.6 percent

#116

Post by MontyCarloHall » Tue, May 11, 2021, 10:33 PM UTC

ragnese wrote: post #107

MontyCarloHall wrote: post #70

Earlier quoted context omitted.

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…

Tangentially, wouldn't it be nice if we could buy a 1990-quality car for the inflation-adjusted price? Poor(ish) people would have a decent shot at actually affording reliable transportation and climbing up the ladder.

With the exception of a few brands (e.g. Honda, Toyota), I’m not sure the dismal mechanical quality of many 1990-quality cars would save people money versus buying a 10 year old used car for the same money.

Remember, 1990 is still the era of the 5 digit odometer. Cars have gotten hugely more reliable over the years. A 2010 car hitting 200k miles is routine and expected; a 1990 car hitting 200k miles would be exceptional.

Also, no 1990 car would pass modern safety standards. Few would pass emission standards. A big reason for the increase in engine performance (and thus complexity/cost) is due to the weight of all the safety equipment that’s required today.

Re: Consumer prices increase 2.6 percent

#117

Post by willcipriano » Tue, May 11, 2021, 10:33 PM UTC

henriquez wrote: post #61

drewcon wrote: post #50

Earlier quoted context omitted.

“The real cost of goods is observably higher”? I don’t get how anecdotal evidence trumps repeatedly buying and measuring the cost of a vast cross section of products everyday people consume? Help me understand the conspiracy here? Who is doing the rigging and how?

The Fed and U.S. government are rigging our economic system to backdoor tax the middle class while gaslighting all of us into thinking that this is normal. You don’t print $10T and handwave away millennia of basic economic principles. Help me understand how CPI is not a joke with respect to how it’s used to say “this is normal.” Everything I’m interested in spending money on, new hires for my company, real estate, ca…

But iPads are faster!

https://www.reuters.com/article/us-usa-fed-dudley-ipad-idUST...

Re: Consumer prices increase 2.6 percent

#118

Post by Erik816 » Tue, May 11, 2021, 10:34 PM UTC

splithalf wrote: post #67

ardit33 wrote: post #8

Earlier quoted context omitted.

Since I cook meat often, I kept track of the Trader Joe's meats from early 2020, to know Flank steak went from $8.99/lb to $12/lb NY Strip, from $10.99 to $14.99 Fillet Mignon from $18.99 to $24.99 Chick has gone up the same. For many food items, inflation is 10% - 15% or more

Consider fake meat. A veggie burger used to cost a buck or so. Compare that to today’s beyond beef which is almost beyond beef in price. Hedonic adjustments in everything.

The difference is that flank steak is still flank steak, while the veggie substitutes may have improved in quality over time.

Re: Consumer prices increase 2.6 percent

#119

Post by RachelF » Tue, May 11, 2021, 10:36 PM UTC

thepasswordis wrote: post #92

In other news, the chocolate ration has been increased to 25 grams! Great success! /s Anybody living in the world can tell you that consumer prices are up a lot, lot more than 2.6%. Look even at this very thread. Food prices are way up, lumber prices are way up, restaurant prices are way up, clothing costs are up. Lots of goods literally just seem unbuyable at this point. Even in my city (nowhere near the southeast)…

There's a lot of fiddling done on the numbers.

One thing they do to keep CPI low is using "equivalent items".

So if the iPhone 4 cost $500 ten years ago, and you can now buy an "equivalent" cheap Android from WalMart for $50 then they measure this as deflation.

Re: Consumer prices increase 2.6 percent

#120

Post by ModernMech » Tue, May 11, 2021, 10:38 PM UTC

anotherman554 wrote: post #93

jrsj wrote: post #5

Earlier quoted context omitted.

Somehow everyone seems has this experience, rents have continued to climb at a high rate for the last decade, and they manage to downplay this in statistics.

In 2011, my rent was $1,420 a month. In 2021 my rent is $1,610 a month. According to the published inflation numbers my rent has gone down because it should be $1,672 if accounting for inflation. I don't live in California-- maybe things are different there-- but I don't buy the conspiracy theories about inflation numbers.

In 2009 my rent was $550 in Pittsburgh. I just looked and today the same unit is going for $980, a 78% increase. According to published inflation numbers that should be a 23.5% increase to $679 today. So at least from our two examples we can see the effect is not evenly distributed.

edit: incidentally, in 2009 the minimum wage was $7.25, and my rent would have been 47% of my gross income. Today the minimum wage is still $7.25 and if I had stayed at the same apartment at the same wage, my rent would be 84% of my gross income.