CPI

[Lumi]

I am curious if people still see things the same. Stuff has gotten worse and worse to the point contractors are now refusing to give quotes that last more than a week or so. The price of many foods has tripled while companies are reporting record profits although this suggests the raised prices are not due to raised costs or a currency change.

The original question was:

For a while I have been rambling about how inflation calculations are bullshit and some of those implications that follow.

Something I have very little understanding about but feel is totally insane is the Consumer Price Index. I kinda have equal parts ignorance and feeling its extremely contrived at 5% while I have to spend well over twice as much on gas, food, and building materials from this time last year.

Just wondering if anyone here has any real understanding on whats going on there or if I should deep dive into my loony toons conspiracy hunting nonsense at some point.

My view on the accuracy of the CPI has not changed - I don't think it's "totally insane" nor do I think their calculations are "bullshit"

Inflation has certainly continued to go up though, and that is also reflected in the CPI which sits at 7.9% for all urban consumers and 8.6% for urban workers - those are the highest inflation rates since the stagflation of the late 70's/early 80's. So I think the index is doing a pretty good job of capturing the severity of the current inflation. And those are just the February numbers, March numbers are scheduled to release tomorrow.


As far as the topic of "has my view on inflation changed?"

The Federal Reserve has stated that it is possible that there could be a period of uncomfortably high inflation coming, and they have adjusted accordingly by moving up their timeline on interest rate hikes. Which in turn has had rippling effects throughout the global economy with many emerging markets mirroring the change with interest rate hikes of their own.

Yes and no. Yes since inflation is empirically higher now, so of course my view on the current rate has changed.

But no because it's not a particularly surprising outcome given that the Fed had explicitly warned about that possibility as I mentioned in my previous post.



And going back to the original question - No, the Federal Reserve and US Bureau of Labor Statistics are still not "totally insane" nor are they "bullshit"

[DJarJar]

The original question was:



My view on the accuracy of the CPI has not changed - I don't think it's "totally insane" nor do I think their calculations are "bullshit"

Inflation has certainly continued to go up though, and that is also reflected in the CPI which sits at 7.9% for all urban consumers and 8.6% for urban workers - those are the highest inflation rates since the stagflation of the late 70's/early 80's. So I think the index is doing a pretty good job of capturing the severity of the current inflation. And those are just the February numbers, March numbers are scheduled to release tomorrow.


As far as the topic of "has my view on inflation changed?"



Yes and no. Yes since inflation is empirically higher now, so of course my view on the current rate has changed.

But no because it's not a particularly surprising outcome given that the Fed had explicitly warned about that possibility as I mentioned in my previous post.



And going back to the original question - No, the Federal Reserve and US Bureau of Labor Statistics are still not "totally insane" nor are they "bullshit"

i got a 2017 toyota corolla like a week before lockdowns started in the US. For about 12k and it's now worth about 18k. Obviously anecdotal experience but it's still kind of shocking. If that 7% feels high to anybody i mean... the us government will happily give you 7% interest on a 10k bond for at least the next 6 months https://www.treasurydirect.gov/indiv...res_ibonds.htm - although i wager if you wait til may to buy it, it'll be closer to 8%

[Lumi]

i got a 2017 toyota corolla like a week before lockdowns started in the US. For about 12k and it's now worth about 18k. Obviously anecdotal experience but it's still kind of shocking. If that 7% feels high to anybody i mean... the us government will happily give you 7% interest on a 10k bond for at least the next 6 months https://www.treasurydirect.gov/indiv...res_ibonds.htm - although i wager if you wait til may to buy it, it'll be closer to 8%

Meat prices up 13.0%
Fuel up 43.6% (although this is arguably more due to geopolitics than it is inflation)
Used Cars and Trucks up 41.2%
Airline fare up 12.7%

Yes, vehicles are one of the areas that has definitely increased far more than 7-8% used vehicles are up 41.2% in the last year alone. (And this fact is indeed taken into account in the CPI)