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US Consumer Price Index up 4.2%

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Re: US Consumer Price Index up 4.2%

#121

Post by kennywinker »

ZeWaka wrote: post #103
dw_arthur wrote: post #93

Paradoxically, inflation has contributed to me taking a sabbatical. While I live in a LCOL area and made ~140k/year it just no longer felt worth it to work as I saw my retirement accounts start to match and exceed my salary in yearly gains. I do plan on going back to work in a part time manner, but inflation has killed any reason for me to work hard at a job for that level of salary. Furthermore, the feeling of "what…

Are you assuming yearly wages not increasing to match/exceed inflation every year? The logical point here doesn't make much sense to me otherwise.

Cumulative inflation since 2019 has been 30%. More with these new numbers, I think.

What jobs have the wages gone up 30% in that same time period? I’m sure a few, but not many.

Re: US Consumer Price Index up 4.2%

#122

Post by tjwebbnorfolk »

aftbit wrote: post #115
compumike wrote: post #21

Here are some N-year rolling total inflation charts to put this datapoint in a longer-term perspective: https://totalrealreturns.com/inflation . Zooming out always smooths the noise.

Why is this logarithmic?

Because inflation compounds

Re: US Consumer Price Index up 4.2%

#123

Post by rottencupcakes »

ZeWaka wrote: post #103
dw_arthur wrote: post #93

Paradoxically, inflation has contributed to me taking a sabbatical. While I live in a LCOL area and made ~140k/year it just no longer felt worth it to work as I saw my retirement accounts start to match and exceed my salary in yearly gains. I do plan on going back to work in a part time manner, but inflation has killed any reason for me to work hard at a job for that level of salary. Furthermore, the feeling of "what…

Are you assuming yearly wages not increasing to match/exceed inflation every year? The logical point here doesn't make much sense to me otherwise.

Also is having twice as much money (1x from interest and 1x from income) not a benefit?

Maybe you are the strawman consumer that skeptics point to in guaranteed basic income debates, who just stops working because they get a check.

Re: US Consumer Price Index up 4.2%

#124

Post by autoexec »

arjie wrote: post #85
tharmas wrote: post #38

Earlier quoted context omitted.

Some businesses use that as cover to increase prices even when their costs may not have actually been affected by the price of energy. Never waste an opportunity to put the big squeeze on. Steadily rising prices will be the norm from now on. What will be interesting to see is how fast the corporate elite figure they can boil the frogs without them noticing too much. $50.00 hotdog is coming.

Is this of any significance? I would imagine most people are like me: we shop based on quality and price and where we want something on that curve. Whether someone raises the price on me “because of inflation” or “because we want to make more money” is indistinguishable. A rationale for the price rarely affects my choice. If I don’t want to buy something for a price, explaining that the guy won’t be able to survive w…

> A rationale for the price rarely affects my choice.

This would make you the exception. Companies are constantly increasing prices to see how much they can charge consumers before they feel cheated and stop buying and/or enough customers get priced out to hurt profits.

Consumers tend to feel ripped off if they think a price increase was due to greed but are way more forgiving if they think the price increase was needed because of something outside of a company's control. That's why companies are quick to tell consumers that rising prices are due to things like fuel prices, bird flu, or supply chain problems.

Of course, that tactic isn't as effective as it used to be since consumers have seen companies using those excuses and feed them lines like "We're all in this together!" while those same companies report skyrocketing profits and they've watched as prices remained high or even increased even after the blamed fuel prices dropped and supply chain issues resolved.

Re: US Consumer Price Index up 4.2%

#125

Post by furyofantares »

dag100 wrote: post #13
furyofantares wrote: post #9

Earlier quoted context omitted.

Many people here make more than they spend, and this is simply inaccurate when that's the case. edit: I've explained how this works in a reply below.

How is it inaccurate? If I only care about buying apples, and apples get 10% more expensive, and my salary only increases by 5%, then I can't buy as many apples as I could have before. How many apples I do actually buy in the end is irrelevant to the calculation.

Consumer price index is about consumer goods. This is why tarrifs and such are considered regressive - they hit people harder the less money they have because a larger percentage of their spending is consumer goods.

If I invest half my income and spend half my income, and the prices of goods goes up 4.2% and my income goes up 4.2%, then I've made progress; I'm now investing more than half my income, because the half of my income I was spending has stayed even and the half I was investing has increased.

Re: US Consumer Price Index up 4.2%

#126

Post by cmrdporcupine »

ZeWaka wrote: post #103
dw_arthur wrote: post #93

Paradoxically, inflation has contributed to me taking a sabbatical. While I live in a LCOL area and made ~140k/year it just no longer felt worth it to work as I saw my retirement accounts start to match and exceed my salary in yearly gains. I do plan on going back to work in a part time manner, but inflation has killed any reason for me to work hard at a job for that level of salary. Furthermore, the feeling of "what…

Are you assuming yearly wages not increasing to match/exceed inflation every year? The logical point here doesn't make much sense to me otherwise.

In the tech industry? Absolutely they have not, and in fact have likely gone the other way.

Unless you're maybe one of the few specialists in deep learning, CUDA, etc.

There's been mass layoffs and downward pressure on compensation all over.

Re: US Consumer Price Index up 4.2%

#127

Post by breakpointalpha »

dw_arthur wrote: post #93

Paradoxically, inflation has contributed to me taking a sabbatical. While I live in a LCOL area and made ~140k/year it just no longer felt worth it to work as I saw my retirement accounts start to match and exceed my salary in yearly gains. I do plan on going back to work in a part time manner, but inflation has killed any reason for me to work hard at a job for that level of salary. Furthermore, the feeling of "what…

I don't understand this point of view. $140k in a LCOL is a fantastic salary. Median US household income is $83k/yr.

It feels more likely your investment account gains are driving your decisions. Stock gains are also driven by inflation though!

I can sort of understand the feeling though, I just recently got a 2.5% raise for "inflation", which hardly feels like it's making a dent.

Re: US Consumer Price Index up 4.2%

#129

Post by infecto »

compumike wrote: post #21

Here are some N-year rolling total inflation charts to put this datapoint in a longer-term perspective: https://totalrealreturns.com/inflation . Zooming out always smooths the noise.

Zooming out in what sense? Those rolling charts don’t mean much imo. Year over year change is a pretty good perspective and a tick up like this is not great.

Re: US Consumer Price Index up 4.2%

#130

Post by DennisP »

tastyfreeze wrote: post #107
hadlock wrote: post #82

Earlier quoted context omitted.

2% is good, anything over 3% is not good, anything over 4% is bad, 5% and higher is really bad. Hope that clears things up for you.

The FED says that 2% is good. 2% is not good. Their target of 2% per year means we have 2% compounding annually devaluation of our currency.

It's fine as long as t-bill rates match or exceed inflation. Then you can avoid losing purchasing power by just putting your money in the world's safest investment. Over the past century, t-bill returns have slightly exceeded inflation on average, though there have been periods when they didn't.

Stash paper cash in your safe and sure, you lose purchasing power. Use fiat money the way it's designed to be used, instead of using it like gold coins, and it works better.

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