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.
Prices have doubled since 1999!? Restaurant prices near me have doubled since 2015, easily. And that's not counting delivery going from free to 25% of the meal cost.
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.
The person you're replying to erroneously interpreted "stay even" as "avoid going into debt," instead of your income's purchasing power remaining constant.
Not necessarily, depends on the distribution of your own expenses. If you deviate from the average urban household (lets say, you have a particularly long commute or your car isn't as fuel efficient as the average. Look at the increase on fuel prices, 40.5%!).
If you're at $5,000/month, a 4.2% raise puts you at $5,210. If you're spending $600/month on gas (not unreasonable for someone that drives an SUV and lives in the suburbs instead of in the urban core), you still come out behind.
>> If you're at $5,000/month, a 4.2% raise puts you at $5,210. If you're spending $600/month on gas (not unreasonable for someone that drives an SUV and lives in the suburbs instead of in the urban core), you still come out behind.
This is the problem with people treat CPI as some word from the heavens...it is not. CPI is a highly constructed figure which conveniently includes/excludes things and is really more a floor of what the inflation is. Anyone living in the real world knows experienced inflation is way higher.
It means you already had the paycut, you need to have at least %4.2 rise + reimbursement to make even.
In high inflation countries you often get a revision every 2-3 months and you get a rise that is higher than the official inflation, as a result this solidifies the inflation and boosts the economy as everyone immediately buys whatever they can before it becomes more expensive. It's a vicious cycle.
Much more since the numbers are cooked anyways. Car model N cost 10k, and car model N+1 costs 15k, if N+1 has 2 more airbags, one more gear, a keyless starter it will be counted way under 50% inflation, even though you pay 50% more.
Most of the average joe's money is spent on housing + food + energy these things are all way above the calculated """average""" inflation
True, but how inflation affects each person is different. This isn't a good measure, but it is the best we have, and usually close enough to the truth.
Typically, you need a little more to make up for the difference in how much more taxes you pay at the marginal end vs the average for your total income...
The median earner with a standard deduction would need a ~4.7% raise to stay even...
Up 4.2% (2.9% core, i.e. stripping out food and energy) over the last 12 months before seasonal adjustment.
The higher-frequency data are more concerning. CPI “increased 0.5 percent on a seasonally adjusted basis in May, after rising 0.6 percent in April” and 0.9 percent in March [1]. (0.3, 0.2, 0.3 percent for December, January, February, respectively.)
Not so much THIS report, but you can't trust any data that the Trump administration puts out after all the blantant corruption. Remember the Sharpie on the hurricane chart?
But if you look at the sibling comment, all of that came from "Food away from home ". In other words, it's all because of takeout/restaurants, not groceries. Those were actually dragging inflation down.
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.
This cannot be emphasized enough. The rise in egg prices was such a thing. Avian flu was an impact, but not to the degree that egg prices increased. Those producers are reporting record profits.
The Iran conflict will continue on a low flame (occasional pinpricks like now) forever.
It serves the US Energy Dominance Agenda against China, Japan, India and the EU.
The Trump administration does not care about "its" population. There were already rumors early in the Trump term that Trump would not mind a recession so that his real estate cronies could buy cheap foreclosures.
So it is all a double win for the oligarchs. The stock market is still fine, nothing else matters.
If this ends up being the case, 15 years from now we might look back at this as the catalyst for supercharging the energy transition across the world ex-US.
The Iran war is for sure a huge part of that (just look at the energy cost inflation!), but other elements are a factor too. "Months ago" is really not that long when it comes to inflation.
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.
Simple, excellent data. Thanks.
This is so good Ty.
Basically, looking at inflation over time, we look pretty good here.
Prices have doubled since 1999!? Restaurant prices near me have doubled since 2015, easily. And that's not counting delivery going from free to 25% of the meal cost.
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.
Many people here make more than they spend, and this is simply inaccurate when that's the case.
No. What isn't spent now is future spending. You are still getting less.
It's still a cut in purchasing power even if you aren't hurting.
But if you don't mind, I'll take 4.2% from your pay.
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.
The person you're replying to erroneously interpreted "stay even" as "avoid going into debt," instead of your income's purchasing power remaining constant.
No, it's like, if you could buy 100 things before, but you can only buy 96 things now, then you have accumulated less value :D
I disagree. "Money" has many meanings, absolute and relative.
Receiving "market" compensation trumps real-world expenses, since the market for one's labor is a different market than the real-world expenses.
Not necessarily, depends on the distribution of your own expenses. If you deviate from the average urban household (lets say, you have a particularly long commute or your car isn't as fuel efficient as the average. Look at the increase on fuel prices, 40.5%!).
If you're at $5,000/month, a 4.2% raise puts you at $5,210. If you're spending $600/month on gas (not unreasonable for someone that drives an SUV and lives in the suburbs instead of in the urban core), you still come out behind.
Don’t forget the obvious ‘finger on the scale’ influence from the administration too.
Why can't we just water down the gasoline? /s
>> If you're at $5,000/month, a 4.2% raise puts you at $5,210. If you're spending $600/month on gas (not unreasonable for someone that drives an SUV and lives in the suburbs instead of in the urban core), you still come out behind.
This is the problem with people treat CPI as some word from the heavens...it is not. CPI is a highly constructed figure which conveniently includes/excludes things and is really more a floor of what the inflation is. Anyone living in the real world knows experienced inflation is way higher.
Also, any asset that isn’t appreciating at least 4.2% is losing value.
Ah…inflation.
And you're still taxed on the "gain"
It means you already had the paycut, you need to have at least %4.2 rise + reimbursement to make even.
In high inflation countries you often get a revision every 2-3 months and you get a rise that is higher than the official inflation, as a result this solidifies the inflation and boosts the economy as everyone immediately buys whatever they can before it becomes more expensive. It's a vicious cycle.
Much more since the numbers are cooked anyways. Car model N cost 10k, and car model N+1 costs 15k, if N+1 has 2 more airbags, one more gear, a keyless starter it will be counted way under 50% inflation, even though you pay 50% more.
Most of the average joe's money is spent on housing + food + energy these things are all way above the calculated """average""" inflation
> 4.2% is what you need to stay even
On average, nationally. Look up your state or metropolitan-area CPI. Or better yet, track your actual expenses and project forward.
True, but how inflation affects each person is different. This isn't a good measure, but it is the best we have, and usually close enough to the truth.
Typically, you need a little more to make up for the difference in how much more taxes you pay at the marginal end vs the average for your total income...
The median earner with a standard deduction would need a ~4.7% raise to stay even...
This is why it's important to get paid in stock. I get an automatic extra 100k a year if inflation runs hot!
Up 4.2% (2.9% core, i.e. stripping out food and energy) over the last 12 months before seasonal adjustment.
The higher-frequency data are more concerning. CPI “increased 0.5 percent on a seasonally adjusted basis in May, after rising 0.6 percent in April” and 0.9 percent in March [1]. (0.3, 0.2, 0.3 percent for December, January, February, respectively.)
[1] https://www.bls.gov/news.release/cpi.nr0.htm
The worst part of this report is my diminished faith in the numbers.
Could you explain? What about this report pushes you toward not believing the numbers?
It’s not this report specifically but the other stuff the admin has done with the BLS.
Not so much THIS report, but you can't trust any data that the Trump administration puts out after all the blantant corruption. Remember the Sharpie on the hurricane chart?
All of the increase is from energy. Oil prices.
It's not just due to energy, at least not directly. Core CPI (ex-food and energy) has been increasing monotonically since February:
https://fred.stlouisfed.org/series/CPILFENS#
Per the link, food is up 3.1% and everything else 2.9%. So energy pulled inflation up from about 3% to about 4%, but that's not "all of the increase"
Energy going up drives evrything up, including food. Everything we do depends on energy in many different ways.
It's possible for energy to be behind the rises in other cost, but the data presented here gives no evidence for or against that possibility.
>Per the link, food is up 3.1%
But if you look at the sibling comment, all of that came from "Food away from home ". In other words, it's all because of takeout/restaurants, not groceries. Those were actually dragging inflation down.
For your interpretation:
All items: +0.5% monthly; +4.2% year-over-year.
Energy: +3.9% monthly; +23.5% year-over-year.
Gasoline: +7.0% monthly; +40.5% year-over-year.
Fuel oil: +58.9% year-over-year.
Electricity: +0.6% monthly; +5.9% year-over-year.
Utility natural gas: -0.5% monthly; +3.0% year-over-year.
Food overall: +0.2% monthly; +3.1% year-over-year.
Food at home / groceries: +0.1% monthly.
Food away from home / restaurants: +0.3% monthly.
Nonalcoholic beverages: +0.6% monthly.
Cereals and bakery products: +0.4% monthly.
Fruits and vegetables: +0.2% monthly.
Dairy: -0.6% monthly.
Meats, poultry, fish, and eggs: -0.2% monthly.
Core CPI / all items less food and energy: +0.2% monthly; +2.9% year-over-year.
Shelter overall: +0.3% monthly.
Rent: +0.4% monthly.
Owners’ equivalent rent: +0.3% monthly.
Lodging away from home: +0.4% monthly.
Communication: +1.3% monthly.
Airline fares: +2.7% monthly.
Personal care: +1.0% monthly.
Recreation: +0.3% monthly.
Apparel: +0.3% monthly.
Used cars and trucks: +0.1% monthly.
Medical care: +0.3% monthly.
Hospital services: +0.7% monthly.
Motor vehicle insurance: -1.7% monthly.
Household furnishings and operations: -0.6% monthly.
New vehicles: -0.3% monthly.
Prescription drugs: -0.9% monthly.
At least raw milk is getting cheaper
Na, the hospital/medical care that comes along with it has gone up.
And eggs! Don't forget about the eggs!
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.
This cannot be emphasized enough. The rise in egg prices was such a thing. Avian flu was an impact, but not to the degree that egg prices increased. Those producers are reporting record profits.
The Iran conflict will continue on a low flame (occasional pinpricks like now) forever.
It serves the US Energy Dominance Agenda against China, Japan, India and the EU.
The Trump administration does not care about "its" population. There were already rumors early in the Trump term that Trump would not mind a recession so that his real estate cronies could buy cheap foreclosures.
So it is all a double win for the oligarchs. The stock market is still fine, nothing else matters.
Absolutely hard Agree here. Thank you.
If this ends up being the case, 15 years from now we might look back at this as the catalyst for supercharging the energy transition across the world ex-US.
Regressive consumer tax due to tariffs?
And gas prices
That was months ago. These days it's more likely to be from the Iran war and the Strait of Hormuz being closed, and what that did to energy prices.
The Iran war is for sure a huge part of that (just look at the energy cost inflation!), but other elements are a factor too. "Months ago" is really not that long when it comes to inflation.
Regressive consumer tax due to going to war with a country for no real reason
Shipping container rates were starting to stabilize, but the issues with the Straight have caused a 80%+ increase in the last few months.
https://www.drewry.co.uk/supply-chain-advisors/supply-chain-...
Thanks, Obama.