Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

US Consumer Price Index up 4.2%

bls.gov

Post reply on HN
Print view View original

281–290 of 316 posts

Re: US Consumer Price Index up 4.2%

#281

Post by mancerayder »

bachmeier wrote: post #213
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.

> 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)…

Not 30k a year, even in a LCOL area. Where's your health insurance? Do you even bother with it at that level?

Re: US Consumer Price Index up 4.2%

#282

Post by tclancy »

jeffbee wrote: post #139
tclancy wrote: post #73

Earlier quoted context omitted.

How much of the food cost (and everything else) is tied to the increase in diesel prices? Do they adjust that out?

Distributor fuel costs are a really small part of the food price, with the notable exception of things that are bulky and full of air like Cheerios. The overwhelming fuel component of grocery consumption, by a margin so large you can consider it to be 100%, is the consumer's fuel. Driving 5 miles to an American grocery store to buy a few pounds of food is the most absurd scheme ever hatched. Having your groceries del…

I meant more in general. For food, what about fertilizer which has spiked?

Re: US Consumer Price Index up 4.2%

#283

Post by jeffbee »

tclancy wrote: post #282
jeffbee wrote: post #139

Earlier quoted context omitted.

Distributor fuel costs are a really small part of the food price, with the notable exception of things that are bulky and full of air like Cheerios. The overwhelming fuel component of grocery consumption, by a margin so large you can consider it to be 100%, is the consumer's fuel. Driving 5 miles to an American grocery store to buy a few pounds of food is the most absurd scheme ever hatched. Having your groceries del…

I meant more in general. For food, what about fertilizer which has spiked?

That's a good question. If I was looking into it, I would look at farm gate prices for various farm products, that the USDA collects. For example, prices received for grains: https://www.nass.usda.gov/Charts_and_Maps/Agricultural_Price...

Re: US Consumer Price Index up 4.2%

#284

Post by Tadpole9181 »

jfengel wrote: post #222
nonethewiser wrote: post #191

Earlier quoted context omitted.

Yeah it's been gamed for a long time. Did you know teh inflation metric can actually go down when staples it tracks goes up? Yup. If steak is tracked and it doubles in price, they can adjust the basket weights to reflect what they assume consumers will do: buy less beef and more chicken instead. So if Q1 steak=10 and Q2 steak=20 they might change the weights so that it's essential comparing Q1 steak to Q2 chicken. Wh…

That doesn't strike me as a problem. It models what consumers actually do. The consumers are still being fed and they're suffering only a minor loss in their preference. They don't keep any kind of hedonic measure, which might be interesting. If a consumer would rather have steak, but switches to chicken when it's over $10/pound, and then switches to tofu when chicken hits $10/pound, they're considerably less happy e…

What? No. How in the world would that be an honest reflection of economic health?

Even in your ideal scenario, if they switch to chicken. Compare the old price and new price of the chicken.

Under your model, if people stop buying toilet paper, there's a 100% REDUCTION in the price of toilet paper in the model. The economy must be great! And, what, do we only want to care that food got more expensive the moment people are starving to death or eating pagpag to survive?

Re: US Consumer Price Index up 4.2%

#285

Post by infecto »

jrflo wrote: post #273
infecto wrote: post #215

Earlier quoted context omitted.

I don’t think that tells us anything. We already know 7% > than 4.2. This should already be a fact that inflation was worse during Covid. I don’t think know that inflation was worse in the 70s helps fixes the narrative that 4.2% inflation is not good.

Obviously more inflation is bad almost always. The question is how bad. By looking at a graph, you can get a sense for the mean and standard deviation of inflation over time, and this looks to be a small deviation in the grand scheme of things. Of course, no one would call this good, but it's just good to put stuff like this in context.

Again I don’t think it says anything. Yes inflation was worse during Covid and before I was born, that just sounds silly btw. There is no perspective to be frank, energy is up a lot, that will impact other goods over the next few quarters.

Re: US Consumer Price Index up 4.2%

#286

Post by JKCalhoun »

jr3592 wrote: post #185
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…

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.

"This actually makes 0 sense … What you're saying makes sense only…"

I take issue with the phrase "makes 0 sense". Maybe it's just a common refrain these days?

Because you then explain how it could make sense. So it wasn't really zero, just required a narrow interpretation?

Re: US Consumer Price Index up 4.2%

#287

Post by khuey »

asdff wrote: post #177
khuey wrote: post #110

Earlier quoted context omitted.

Most of the relevant numbers in the American tax code are inflation adjusted, but not all of them. The biggest ones for people on this website are probably the value of the Child Tax Credit and the thresholds at which the Net Investment Income Tax/Additional Medicare Tax kick in.

Don't forget prop 13 in california, probably many beneficiaries of that policy on this forum.

Prop 13 is the other way around, inflation is to the taxpayer's advantage.

Re: US Consumer Price Index up 4.2%

#288

Post by dag100 »

furyofantares wrote: post #125
dag100 wrote: post #13

Earlier quoted context omitted.

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…

> 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.

Let's say your income is $100. You spend $50 and invest $50. The prices of goods goes up 4.2%, so to keep your current living standards, you must now spend $51.20. Your income increases by 4.2% to $104.20. After expenditures, you now have $51.20, or exactly half your income, to invest. So you haven't made any progress. And investing $50 now is equivalent to investing $47.98 before in terms of what you could have bought instead of investing.

Re: US Consumer Price Index up 4.2%

#289

Post by SirMaster »

bluGill wrote: post #255
SirMaster wrote: post #219

Earlier quoted context omitted.

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.

I save for retirement yes. I only spend about 30% of my income to live and other other 70% I save for retirement.

I don't feel like I'm being cheap or limiting myself. I have hobbies that I enjoy, computers, home theater, pickleball, scuba diving, hiking, biking. I travel a lot for fun, backpacking and trips around the world to see cool cities, hike mountains and experience different cultures.

I don't find my job particularly demanding or stressful, it's flexible, the people I work with are nice. I just spend what I feel I need to spend to do what I want to enjoy myself and the rest I put in investments.

I know I can't take it with me, but it just means I will be able to retire that much sooner.

I get a 3% raise every year as the default, aside from promotions and such, and the amount it gains me is about 3x higher than my cost of living increases have been these past years, so it really does not feel like I am making less. I am living my same life that I enjoy and saving a bit more and more each year.

Re: US Consumer Price Index up 4.2%

#290

Post by somenameforme »

HDThoreaun wrote: post #251
somenameforme wrote: post #199

Earlier quoted context omitted.

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. Ye…

Check out the data from the Fed and contrast it against events in the past. For instance you mention the long depression which happened from 1873 to 1879 and resulted in a decline in prices of about 30% followed by stabilization. And of course that was also the advent of the Gilded Age, where economic growth, wages, and so on all were skyrocketing, all while prices trended downward! It's difficult to even imagine something like that now a days.

I don't think that's just a coincidence either. Economic issues in the US used to foreshadow booms to come, which makes sense in many ways as it's the ending of one generation of businesses and the start of another. By contrast in the US prices have increased by 30% over almost the same length of time as the 'long depression', and continue going up up and away. It'd be nonsensical to call it the long inflation or whatever because it's only slightly off the normal. 2% 'planned' inflation over the same 7 year period is a 15% increase in prices. And businesses going under? No, everything's huge now, and so everything's too big to fail. The government has taken on the responsibility of perpetually propping up failing businesses, forever inhibiting competition in the process.

And there's no boom waiting at the end, in no small part because there is no end. Each economic issue we face, which are becoming increasingly regular, just further magnifies the divides in society. The wealthy have sufficient assets and resources to turn this into profit, in no small part by dumping excesses of money into inflation resistant assets, but the middle and lower classes have no such option and so mostly just lose either badly or very badly. This [1] site lays out a bunch of the data since 1971 (when the dollar became completely unbacked following the end of Bretton Woods) and impossible not to see it as an enormous inflection point for all sorts of nasty stuff.

---

I suspect if we hadn't had the tech boom kicking off fairly shortly after 1971, driving in a decades long unprecedented economic boom, that this experiment would have long since reached its climatic failure. It only works with infinite exponential growth. For some time we had that. Now we not only no longer do, but also are seeing a fertility collapse at the same time. There's gonna be some fireworks.

[1] - https://wtfhappenedin1971.com/

Post reply on HN