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US Consumer Price Index up 4.2%

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Re: US Consumer Price Index up 4.2%

#251

Post by HDThoreaun »

somenameforme wrote: post #199
HDThoreaun wrote: post #113

Earlier quoted context omitted.

Why is that not good? When inflation is close to 0 real interest rates increase which causes the economy to slow down. It seems clear to me that the optimal rate of inflation is always above 0.

The Fed did a study some time back estimating CPI levels since 1800. [1] They found that from 1800 to 1950 the CPI never shifted more than 25 points from the starting base of 51, so it always stayed within +/- ~50% of that baseline. That's through the Civil War, both World Wars, Spanish Flu, and much more. And obviously the US economy increased in sized quite exponentially from 1800 to 1950, with no persistent inflat…

The US economy faced repeated economic catastrophes from 1800-1950 largely because the government was unable to enact monetary policy. The long depression of the 1870s happened pretty much solely because monetary supply contracted and populists got elected to fuck with the silver/gold standard. Causes of the great depression are more varied, but contraction of money supply due is certainly one of the leading ones.

Yes, the economy expanded greatly over this period, but you have to separate inflation from many other causes such as innovation, increasing labor supply, better education, increases in the amount of investment. I think its pretty clear that the economy wouldve fared much better in the 1800-1950 period if the government was partaking in monetary policy that focused on small but positive inflation.

Re: US Consumer Price Index up 4.2%

#252

Post by fluoridation »

jr3592 wrote: post #244
fluoridation wrote: post #240

Earlier quoted context omitted.

??? "All" it incentivizes? Uh, no. The vast majority of people don't treat their salaries as an investment opportunity, they have to live off it. If you need to fix your water heater, you might get it fixed now while inflation is high than wait until winter (not a great example given the time scales involved, but it gets the point across). Even if you have nothing that you desperately need, if inflation is really hig…

??? OBVIOUSLY if you absolutely HAVE to spend money because your life depends on it (ex: hot water) then you're going to be incentivized to spend it sooner rather than later in an inflationary market. I'm referring to discretionary spending. Eating out. Buying a new laptop. Traveling. Etc. This statement: "it pushes people to get rid of currency by any means they have available." is just flat out wrong. If you're dra…

It's not flat out wrong. If the means you have available include investing, you might do that. If they don't, you're still better off spending it on something not strictly necessary now that you're able to than saving it to have its purchasing power be eaten away by inflation.

Re: US Consumer Price Index up 4.2%

#253

Post by jr3592 »

jbmchuck wrote: post #247
jr3592 wrote: post #187

Earlier quoted context omitted.

How much do you have saved?

Enough that a 5% annual return is enough for me to get by. I'm certainly not done working - I want to get that to 3% or so - but it does make it a bit demotivating some days when I look outside and imagine the other things I could be doing with my time.

I mean, I'm totally with you... It's just never clear to me what "enough" is.

Re: US Consumer Price Index up 4.2%

#254

Post by tencentshill »

Balgair wrote: post #236

Serious question here: Can we trust these numbers out of this admin? I've not been super plugged into the latest news out of the BLS, but I seem to remember a lot of political firings in the 'econ' part of the government. I do not mean to be glib here either or start a flame war. I am genuinely asking.

It's currently headed by a pretty by-the-books guy, after a series of trump loyalists were rejected. Next up for nomination is another boring career professional, who actually pushed back against trumps bullshit and survived.

https://www.reuters.com/world/us/trump-nominee-head-bls-supp...

Re: US Consumer Price Index up 4.2%

#255

Post by bluGill »

SirMaster wrote: post #219
bluGill wrote: post #7

Remember this next time you get your yearly review/raise. 4.2% is what you need to stay even, anything less is a pay cut.

This never made sense to me. Doesn't this assume you are spending ALL your income though? If I make 100K and get a 3% increase, that's $3000 more. But if I only spend 30K to live, and my living expenses go up 5%, that's only a $1500 increase to my living expenses while I earned $3000 more that year. So how is that a pay cut if I actually have even more money left over that basically just goes into my investment accou…

> Doesn't this assume you are spending ALL your income though?

Why wouldn't you be? You will die, and the vast majority of religions (including atheism) don't let you take it with you. Sure there is some saving for a rainy day or retirement. However why are you earning more than that? If you need a job for social reasons only there are plenty of volunteer jobs that can provide that.

Re: US Consumer Price Index up 4.2%

#256

Post by FrustratedMonky »

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…

If your retirement account is making more than 140k/year. You are probably in late stages of career, and of course have completely different incentives that also play into 'what's the point'.

If my retirement account was making more than my salary, then I'd also be asking myself 'what is the point' -> Regardless of inflation.

Re: US Consumer Price Index up 4.2%

#257

Post by scarecrowbob »

w10-1 wrote: post #170
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 would never, ever leave work regardless of the pay. Regardless of your skill and reputation, time off can quickly put you below the bar for even getting a call-back, and you lose access to relevant lessons. You'll be shocked at how irrelevant you become, and how quickly the retirement accounts will give up the gains of the last 3 years (particularly when this 2026 IPO summer terminates US equity markets). The feeli…

Oh no, you mean I might not be able to get another really annoying job so I can, what, have more money than I need to live on?

I used to get paged at 1am to mess with downed webservers, now I hang out in a shack with no running water in rural CO.

I'm 48 and have a chunk of cash that made more last year than I've ever been able to make in a single year doing salaried labor as a programmer.

I quit 3 years ago when my kiddo graduated college and have been just living on that and my small A/V production business.

It's great.

I do a lot of work; I have done first aid at one music festival, paid sound at a bluegrass festival, and sat around doing random volunteer stuff at another. I can give the local music school and the local civic orchestra really good bids on doing sound for them. I am going to get an EMT cert because I have a friend who contracts to do first-aid at festivals.

I'm not at all worried that my (pre-LLM) programming skills and connections are going away- I've replaced them with mandolin skills and much happier.

Re: US Consumer Price Index up 4.2%

#258

Post by Dig1t »

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…

It sounds like either way you could just use a break. If you have a house and retirement is tracking inflation, you can use the time to reset and figure out a career change.

Re: US Consumer Price Index up 4.2%

#259

Post by thrance »

markerz wrote: post #205
jr3592 wrote: post #185

Earlier quoted context omitted.

This actually makes 0 sense. Like, do you even understand what you're saying? The value of your savings is decreasing at a faster rate than ever before, so its a good time to stop saving and spend it? The stock market increasing is not the same thing as inflation. What you're saying makes sense only if you are referring to stock market valuation... strictly retiring because inflation is high makes no sense.

> Like, do you even understand what you're saying? That comment is unnecessary and has the effect of making people feel bad. I think the rationale is that wages are stagnant in comparison to investments (stocks) and costs (inflation). So there's decreased incentive to focus on wages as a form of income, and more incentive to focus on investments. I've definitely felt this personally, as my income shifts towards inves…

> So there's decreased incentive to focus on wages as a form of income, and more incentive to focus on investments.

That's been the case for a while now, and is steadily getting worse. But the issue is, workers usually rely on their wages to live. It's not a choice for the vast majority of people.

And it's unsustainable. You can't build a society of exclusively parasites that feed on the work of fewer and fewer hands.

Re: US Consumer Price Index up 4.2%

#260

Post by inigyou »

casey2 wrote: post #230
bachmeier wrote: post #213

Earlier quoted context omitted.

> This actually makes 0 sense. Like, do you even understand what you're saying? It makes perfect sense if the decision to work is based on real, after-tax income. Change the comment to say "the tax rate keeps climbing so I quit working" and it would not occur to anyone to challenge it. Once you have enough saved to generate income covering the very basics (probably somewhere around $30k/year in a LCOL area in the US)…

If you don't understand second-order effect that is. What happens when everyone stops working, either QoL falls or prices rise. Labor force rate is at 83.8% for prime age workers. (Most of the QoL add comes from immigrant labor while most of the QoL extraction comes from high tech. So this does complicate the math) The govenment then lacking revenue extracts more from prime age workers and raises the retirement age a…

That's going to happen regardless of your individual action. You can take a sabbatical and suffer a raised retirement age, or you can not take a sabbatical, and still suffer a raised retirement age. If you want to solve it, a collective action (i.e. government regulation) is necessary.
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