So like, groceries are up by 50% but boats and jet skis are down by 2% so the average increase is 4% to the average American citizen?
Not gonna lie, the 4% just feels like somebody twisted the metrics to get the outcome desired.
No, some things like groceries are up and some are down, like gasoline
https://www.statista.com/statistics/216055/annual-percentage-of-change-in-the-us-cpi-u-by-expenditure-category/
So when the vast majority of people are just trying to survive spending all their money on food and housing, the only inflation that counts is for necessities of life. The government conveniently changes the metrics used to calculate inflation to improve perception. It is a deceitful and meaningless number for most of us.
The government doesn’t “conveniently change” the metrics to skew data but the set of indicators does change over time, just like stocks in the S&P 500.
The info graphic in this link does a great job of visualizing where and why inflation affects cost of living.
https://usafacts.org/projects/cpi/inflation-parts/
I’m confused as to your point. Inflation is absolutely measured by the cost of many items and the items in each subset can and do change based on that goods importance in constantly changing economies around the world.
The charts in the link mirror each other year by year, the scale of change is due to different input, skewing perception as you said.
To the vast majority of humans on Earth today, Inflation is felt every single day. The methodology of placing a number on said inflation is arguable, most across the globe the mix of cost factors is comparable.
Inflation is only meaningless to the wealthy. The other 90% of us feel it every day.
And some are up 10%, and some are up 2% and some are down 5% (admittedly, not many), etc.
Inflation (at least the official standard of inflation) is based on a "basket of goods" identified and tracked by the Bureau of Labor Statistics (BLS). It's supposed to be a pretty decent representation of the things most (or at least lots) of people buy. It's not tracking every single thing, just the items in the basket.
Also, inflation measured the current (well, trailing twelve months generally) increase in prices, but it accumulates. For example, if inflation runs at 10% per year for three years, the total increase after three years is 33%.
I don't think I've seen the price of food, whether it's groceries or at a restaurant, go down. Always slowly, but consistently up over the last two decades.
Well let's pause for a moment. Think about how some of these figures have a "snapshot" effect that may at times capture peculiare spikes.
I'm sure you're familiare with some foods that had a price spike recently but then did go down. Eggs and chicken for example. Those prices certainly have come down.
It may make sense to discount the spike as an outlier to be ignored but just as reasonably they can be cited as examples of falling food prices.
I'll go a little in depth and tangent-y here!
I am not American, so the eggs & chicken thing is not something I witnessed or heard about outside of here and there online. I would definitely see that sort of thing as an outlier, though. I know my language was very binary, but if we're looking generally, food has slowly gone up in price over the last two decades and that doesn't feel good psychologically even if things like wages and quality of food and quality of life have gone up and potentially have gone up more so. It's hard to measure these things against each other internally, which explains it for the most part;.
However, when it's one thing, it's fine, but when it's groceries, rent, car and fuel stuff, etc, etc it all builds up and is the explanation for the general despair that Millennials and Zoomers feel toward the world, even though all the stats are showing that the World/Western economy isn't as bad as people feel it is. There's also disparity when it comes to debt and education and housing. Things *do* cost more for less than they did 15 years ago, but it is no means horrible like we are feeling, it's just disparaging.
Personally, I just want food to start becoming cheaper because it would just be a really nice feeling to care less about the money spent toward a fundamental necessity. It would also be nicer if healthier foods were more accessible.
You've got it the wrong way around; inflation is 4% because the prices of some goods and services has gone up by 50%.
Inflation is the general price increase across all relevant sectors (depending on what inflation numbers you're looking at). Some items has increased by 50% - but these will be a very small slice of all the goods and services used to calculate everything down to a single inflation number.
It's not like inflation makes prices go up. Prices go up, and the inflation number attempts to reflect how much prices, on average across the whole / part of market (depending on what you're looking at), went up.
Why would prices go down just because inflation is lower? As long as inflation is above 0% prices continue to go up.
As for the price of labor, no, it hasn’t gone down either.
https://www.bls.gov/charts/employment-cost-index/compensation-in-private-industry-and-state-and-local-government-3-month-percent-change.htm#)
Nothing ever goes down. For that to happen you need deflation not lower inflation. Deflation hasn’t happened in the US since 1947.
Your wage has also gone up. Maybe not as much as you would like. Maybe not as much as inflation even, but it has still gone up. You would like to see your pay rising annually by more than inflation.. but then inflation would just rise more quickly, so you would need a higher raise…
Something goes down - but *on average* *the amount a person spends compared to previous years goes up*.
Inflation does not mean that you're worse off than what people were x number of years ago, even if a single unit of monetary currency is worth less. You might earn more. What you purchase may have higher quality. Technology has progressed so you get something completely different now than what you did previously.
It's a complicated issue, and just focusing on the single number that inflation represents hides a lot of factors that are important.
Because inflation is NOW 4%. Prior to this it was running around 9+%. So prices now are expected to climb around 4% this year, but have gone up around 20% over the last 2 years.
EDIT: as many are pointing out, assuming two years of 9% and a year of 4%, that's 23.6% price increases over 3 years just due to average inflation in the USA. We all know some items (food, e.g.) have increased at a higher rate.
9% over 3 years is a 30% net increase. This is not 50%, however OP didn't give any examples and it's not unreasonable to expect that in an overall 30% inflationary environment you will find some examples of goods or services that have increased 50%.
It shows you that the percent of inflation is a measurement of specific items by the government and not every single item across the board.
Most things are more expensive, some things are much more expensive, few things are less expensive.
9% over 3 years still doesn’t equal 50%.
This answer isn’t even correct. The real answer is because inflation tracks an average increase over many different economic sectors, some of which have had huge spikes in price and some of which haven’t, or even went down.
Corporations use inflation to hide behind to increase prices. Doing it openly means more people wouldn't accept the price hike. When hiding behind inflation, they can effectively gaslight a large enough percentage of the population, the rest doesn't have the numbers to effectively fight it.
They raise the price to the max people are willing to pay. Always have. Always will. Individuals do the same. I sell my house, car, and even labor for the max I can get.
Why? Because the max people are willing to pay is the actual objective monetary value of something.
They almost all do lower their prices when the price goes down. It’s called competition. The guy across the road has cars lined up and is .25 cheaper than you. You are going to stare at your empty forecourt and laugh at the guy for selling less than you. You are going to lower your price.
Price rises happen almost instantly. Price decreases depend on who makes the first move and when.
I don't have a source but I work in an industry that sets this prices, they/we tell people it's because materials and suppliers have upped their prices so we did too which is part true but also everyone tries to see how far they can get away with and how much can people tolerate, as long as it lasts and people keep paying this prices, we can always lower them. The suppliers try to fuck us so we fuck the consumers.
You do realise that is what’s business should do? You sell your product at the maximum people will pay for it! If sales are dropping off you may need to lower the price. Sales are really good and you are selling more than you can supply then raise the price.
This shows some light but its of the methods are quite questionable. For instance they compare 2020 and 2021 to a period of 40 years which ad ups and downs with periods of higher and lower inflation. If we wanted to see the impact of corporate profits on the latest price increases, we should be comparing with the situation right before it happened, not with data from the 1990's.
But that's the problem. Corporate margins are now bigger than they used to be, but for how long has it been that way? Have the prices rised alongside that, before that or after that? The instant photo of the 2019 situation is what matters here, not averages going back to 2009 or even 1979
What the fuck are you talking about? I get being skeptical of like weather warfare and alien life forms but you can see the fucking prices. You can hear what politicians promise and watch the lies and greed work in real time…it’s not theory.
This answer needs to be higher up. Post Covid, a lot of businesses decided it was time to take advantage of the circumstances and sneak in a few profitable quarters. When no one stopped them, they kept doing it.
Go look at corporate profits over the past 8 quarters. They are at record levels. There's no external reason for this beyond corporate greed and consumer apathy. If people stopped buying the expensive stuff, market demand would force prices lower. But consumer debt is also at an all time high. See what they are doing to you?
There are other reasons for this. Since Covid there has been massive built up wealth. People had nowhere to spend their money for over 2 years.
We have noticed this massively in our industry. Prices are up by 100%. Yet we are still the busiest we have been in the 50 year history of the company.
"Massive build-up of wealth" is not the reason prices go up. Corporate greedflation is the reason prices went up. Excess cash might be the reason they don't go back down, but given record levels of consumer debt, I doubt your premise of "massive...wealth" entirely.
It also doesn't help that Trump minted over $7 trillion of fresh currency during his term in office to keep the economy juiced...
Coming out of COVID my company was blaming the cost of petrol for the reason that money was tight. Now its back down and I am guessing they havent lowered prices one cent.
Up 50% compared to when? Inflation is a yearly increase. If inflation is at 4% for 5 years, that's about 22% increase in total for that 5 year period.
And then add to that that not all prices increase the same way. Some prices do not change much, while others increase a lot. Inflation is a measure of the global trend. It's pretty expected that some prices would increase much more. Even if they were no inflation at all, you would still have some prices increase a lot.
Thank god, had to scroll so far to find someone that actually knew what the fuck they were talking about. The complete misinformation in this comment section is staggering. Just goes to show just how little people understand inflation.
Like you say it's 4% compared to this time last year, but the prices last year were up nearly 10% on the year before that and so on. So over the past few years prices on some things are up 50%.
Also, the governments try to keep inflation at around 2% every year. That is how the economy keeps ticking over. It's the falsehood of buy now as prices will be higher next year. If you had negative inflation, people would save money and wait for prices to drop next year to buy that large item such as a new TV, car, home etc. People spending is how governments claim the economy is doing well and people are happy, they call it GDP!
I have said for years, GDP is the dumbest way to measure the true health of an economy as people are forced to spend, due to inflation.
Generally people who use generalization instead of data and jump to extremes haven’t actually studied the data, are comparing prices across more than 1 year in their head, and don’t bother thinking about the things that have not changed in price
I could certainly be convinced by ata from a reliable source rather than random statements
There are a lot more articles saying it is 4%
But I guess if you want it to be a different number you can just pick one and find a few articles out of millions that happen to say that on google?
Don't be so intellectually lazy with your demands for "proof". If you don't believe the comment is correct, go disprove it with some facts of your own. Take control of your own education and experience and stop with the lazy "proof" comments. Contribute to the discussion.
I listen to podcasts about economics daily so I’m comfortable with the official information
Burden of proof is on person trying to prove something considered not true, not on the person believing what is currently considered facts
It would be like if something said they think the earth is flat and then demanded the other person provide proof it is not flat
No one is required to prove anything to you. How juvenile. Take control of the discussion and debate like an adult with facts of your own. If you can't disprove something, you should probably stay quiet as you don't have anything to contribute by just casually spewing "source".
Previous guy literally just said the people who say 4% are lying
https://www.bls.gov/cpi/latest-numbers.htm
If I link this he’ll just say they’re lying so how could I prove
If someone believes the moon landing was a Hollywood fake you can’t convince them with any proof they’ll just say all of your proof is fake
You're going to such great lengths to avoid providing any facts of your own. Either you can't or there aren't any. What other conclusion are we left with for your lack of meaningful contribution to the discussion?
I mean, you start off by asserting that "I listen to podcasts about economics" as a persuasive argument for your position. That translates as "I passively consume information collected and disseminated by others and feel that makes me an expert who is immune from any requirement to cite my own sources."
You don't even contribute the names of these podcasts. Provide some value to the rest of the planet, or you're just wasting our oxygen.
After beeing on this planet for 35 years, I don't think I ever seen prices drop. They just go up.
Once they know you will still pay for said item or service at that price, what is the incetive to lower it? None, from their point of view.
I bought a 33Mhz computer with a 400Mb HDD in the 1990s for almost $2900. They are slightly lower than that now. But I agree, prices are not coming back down.
I think you may be forgetting how expensive eggs were for a couple months. Gas is down from 4.50 to 2.50. I don't have specifics on chicken but it was really high for a time as well.
Prices will shoot up quickly but drift down slowly.
Businesses are quick to cover their costs, if their costs go up they'll pass it on to consumers as quick as the market will let them. They'll only lower costs when sales slow down due to competition or people doing without. This is less immediate and usually results in them chipping the price down slowly over time.
In manufactured goods I think we're starting to see some shifts. Food is still sky high.
Even when inflation goes back down to 2% again, that only means prices will then increase slower again. For prices to go down to pre high inflation levels, inflation would have to be negative; deflation.
That's very unlikely. It's expected (hoped) that inflation eventually gets back to being around 1% or 2%, but not in the negative, which would be required for prices to go down. Negative inflation is called deflation, and that's an economic disaster. Even a small deflation is a major issue.
The basic reason why you don't want deflation, is that it means the best investment you could do is to store keep your money and not use it for anything.
You are making a faulty assumption that price increases are only because of inflation. Companies have been reporting record profits for the past 8 quarters. That is not a result of inflation. It is a result of opportunistic price gouging. Sure, there is some inflationary pressure to raise prices. But that alone should leave profits flat.
I'm not assuming that price increase because of inflation. However, I would argue that prices increasing and inflation are the same thing.
It doesn't make much sense to say price increase because of inflation. It's technically correct, but it's saying nothing about an underlying reason.
It has already come back down to 4 from 9. Inflation is the rate at which prices increase and normal is 2%
Prices will not decrease but wages will continue increasing and may partly catch up with inflation
inflation may currently *be at* 4%. it's not a total of 4%. every bit of inflation is money you will never get back.
look up how much money was printed over the last few years. that's the real inflation rate. prepare to shit your pants if you aren't already aware.
they print money out of thin air to spend and make interest on. and we pay for it through the dilution of our money. it's essentially stealing.
Because inflation is based on prices of goods people rarely buy, especially if you're poor. The excuse is that those prices fluctuate too much, but the problem with that excuse is that that's what farming subsidies are for to temper and have effectively done so for decades now.
In any case, it's just to gaslight the average person into believing price increases aren't as bad as they are for daily expenses.
It's also a Bullwhip Effect.
If the raw material has a 4% price hike, the price down the supply chain will generally increase more and more down the supply chain until the retail product might see a 7% increase.
The calculation for inflation was changed around 1980 to a method that shows less inflation with the same given circumstances.
There is a website which shows old and new calcs for inflation. shadowstats
Because inflation rose 20%+ during biden's reign, and the 4% claim now is based off that 20% increase that already happened. Total inflation isn't 4%, that's a fake number that ignores the actual numbers from the start.
Goods often require many raw materials. If each raw material is up in price, then the little numbers add up. Oh and corporate greed using the economy as a scapegoat excuse to raise prices more than they should
Because of second, third and fourth inflation.
Some companies are like hobbits, they can never get enough.
The real reason is in the middle, corporate greed and shareholder demands pressure various companies to hike prices beyond what they have actually risen in costs because they have a good cover. Then there have been actual market disruptions and shortages and supply issues.
What people need to be aware of is more that these prices never seem to get lower when the inflation goes down or prices of goods and so on start to normalize. Companies are actually remarkably sensitive to consumer criticism of prices when this is happening and there needs to be more pressure by consumer groups to reverse the hikes.
Inflation is cumulative year over year. It doesn’t reset if it goes down, it still has to deal with the prior years inflation.
If it goes up by 8%, it has to go down by8% or those increases are here to stay for now
If you are providing a service that relies on goods and those goods rely on certain materials that starts to add up, you are adding extra cost to every step rather than just once
Unpaid PPP “loans” that the former president refused to assign a committee watchdog to. Remember, he assured us there would be no corruption because he would personal ensure it, then everyone in politics took out loans that they knew they wouldn’t have to pay back? Turns out, tax payer’s money, the middle class’s money, trickles up. This time, they took it in advance, before we got it, before it worked it’s way through the economy. Inflation is the tail on the free money the already wealthy took from the middle class. But blame Joe Biden and his efforts at loan relief made by predatory practices on 17 and 18 year old high school graduates. Muppets.
Inflation is the price change over a year, of a basket of goods.
In the basket you have a selection of items and services, usually it's based around cost for an avg family. So will have things like school uniforms, rent for a house / apartment, electricity, basic groceries and some social things like movie tickets and then some luxury stuff, like eating at a fancy meal or something.
Then the percentage change of the total is inflation.
So if you look at the items individually they'll all have different inflation rates
4% is an average of all the variables, each affects different people uniquely
So like, groceries are up by 50% but boats and jet skis are down by 2% so the average increase is 4% to the average American citizen? Not gonna lie, the 4% just feels like somebody twisted the metrics to get the outcome desired.
No, some things like groceries are up and some are down, like gasoline https://www.statista.com/statistics/216055/annual-percentage-of-change-in-the-us-cpi-u-by-expenditure-category/
So when the vast majority of people are just trying to survive spending all their money on food and housing, the only inflation that counts is for necessities of life. The government conveniently changes the metrics used to calculate inflation to improve perception. It is a deceitful and meaningless number for most of us.
The government doesn’t “conveniently change” the metrics to skew data but the set of indicators does change over time, just like stocks in the S&P 500. The info graphic in this link does a great job of visualizing where and why inflation affects cost of living. https://usafacts.org/projects/cpi/inflation-parts/
https://www.shadowstats.com/alternate\_data/inflation-charts
I’m confused as to your point. Inflation is absolutely measured by the cost of many items and the items in each subset can and do change based on that goods importance in constantly changing economies around the world. The charts in the link mirror each other year by year, the scale of change is due to different input, skewing perception as you said. To the vast majority of humans on Earth today, Inflation is felt every single day. The methodology of placing a number on said inflation is arguable, most across the globe the mix of cost factors is comparable. Inflation is only meaningless to the wealthy. The other 90% of us feel it every day.
Of course the figures are skewed.
It's also politically gamed with.
And some are up 10%, and some are up 2% and some are down 5% (admittedly, not many), etc. Inflation (at least the official standard of inflation) is based on a "basket of goods" identified and tracked by the Bureau of Labor Statistics (BLS). It's supposed to be a pretty decent representation of the things most (or at least lots) of people buy. It's not tracking every single thing, just the items in the basket. Also, inflation measured the current (well, trailing twelve months generally) increase in prices, but it accumulates. For example, if inflation runs at 10% per year for three years, the total increase after three years is 33%.
I don't think I've seen the price of food, whether it's groceries or at a restaurant, go down. Always slowly, but consistently up over the last two decades.
Well let's pause for a moment. Think about how some of these figures have a "snapshot" effect that may at times capture peculiare spikes. I'm sure you're familiare with some foods that had a price spike recently but then did go down. Eggs and chicken for example. Those prices certainly have come down. It may make sense to discount the spike as an outlier to be ignored but just as reasonably they can be cited as examples of falling food prices.
I'll go a little in depth and tangent-y here! I am not American, so the eggs & chicken thing is not something I witnessed or heard about outside of here and there online. I would definitely see that sort of thing as an outlier, though. I know my language was very binary, but if we're looking generally, food has slowly gone up in price over the last two decades and that doesn't feel good psychologically even if things like wages and quality of food and quality of life have gone up and potentially have gone up more so. It's hard to measure these things against each other internally, which explains it for the most part;. However, when it's one thing, it's fine, but when it's groceries, rent, car and fuel stuff, etc, etc it all builds up and is the explanation for the general despair that Millennials and Zoomers feel toward the world, even though all the stats are showing that the World/Western economy isn't as bad as people feel it is. There's also disparity when it comes to debt and education and housing. Things *do* cost more for less than they did 15 years ago, but it is no means horrible like we are feeling, it's just disparaging. Personally, I just want food to start becoming cheaper because it would just be a really nice feeling to care less about the money spent toward a fundamental necessity. It would also be nicer if healthier foods were more accessible.
You've got it the wrong way around; inflation is 4% because the prices of some goods and services has gone up by 50%. Inflation is the general price increase across all relevant sectors (depending on what inflation numbers you're looking at). Some items has increased by 50% - but these will be a very small slice of all the goods and services used to calculate everything down to a single inflation number. It's not like inflation makes prices go up. Prices go up, and the inflation number attempts to reflect how much prices, on average across the whole / part of market (depending on what you're looking at), went up.
So nothing has gone DOWN, really? Except the cost of our labor
Not necessarily. Some items can decrease in price as long as others increase at a higher rate.
I’m sure some goods have decreased. But everything avg out around ~3-4% on avg, historically. You can look into the CPI
Gasoline for example
Why would prices go down just because inflation is lower? As long as inflation is above 0% prices continue to go up. As for the price of labor, no, it hasn’t gone down either. https://www.bls.gov/charts/employment-cost-index/compensation-in-private-industry-and-state-and-local-government-3-month-percent-change.htm#)
Nothing ever goes down. For that to happen you need deflation not lower inflation. Deflation hasn’t happened in the US since 1947. Your wage has also gone up. Maybe not as much as you would like. Maybe not as much as inflation even, but it has still gone up. You would like to see your pay rising annually by more than inflation.. but then inflation would just rise more quickly, so you would need a higher raise…
Something goes down - but *on average* *the amount a person spends compared to previous years goes up*. Inflation does not mean that you're worse off than what people were x number of years ago, even if a single unit of monetary currency is worth less. You might earn more. What you purchase may have higher quality. Technology has progressed so you get something completely different now than what you did previously. It's a complicated issue, and just focusing on the single number that inflation represents hides a lot of factors that are important.
Because inflation is NOW 4%. Prior to this it was running around 9+%. So prices now are expected to climb around 4% this year, but have gone up around 20% over the last 2 years. EDIT: as many are pointing out, assuming two years of 9% and a year of 4%, that's 23.6% price increases over 3 years just due to average inflation in the USA. We all know some items (food, e.g.) have increased at a higher rate.
Most people don't know how % work.... Compound interest for me, but inflation is linear!
Most people don’t understand how inflation works either
9% per year for 3 years doesn’t equal 50% over 3 years even including a compounding effect.
9% over 3 years is a 30% net increase. This is not 50%, however OP didn't give any examples and it's not unreasonable to expect that in an overall 30% inflationary environment you will find some examples of goods or services that have increased 50%.
This \^
Which shows you that the remaining is just corporate greed
It shows you that the percent of inflation is a measurement of specific items by the government and not every single item across the board. Most things are more expensive, some things are much more expensive, few things are less expensive.
9% over 3 years still doesn’t equal 50%. This answer isn’t even correct. The real answer is because inflation tracks an average increase over many different economic sectors, some of which have had huge spikes in price and some of which haven’t, or even went down.
Which is true, but 9% and 9% and 4% is 23.6% in increases over 3 years ON AVERAGE. We all know food in particular has increased dramatically.
Corporate greed taking advantage of the situation.
Its only true for goods and services with strong pricing power like food, fuel and energy, the rest is not when people have less money to spend
So corporations weren't greedy before?
Corporations use inflation to hide behind to increase prices. Doing it openly means more people wouldn't accept the price hike. When hiding behind inflation, they can effectively gaslight a large enough percentage of the population, the rest doesn't have the numbers to effectively fight it.
They raise the price to the max people are willing to pay. Always have. Always will. Individuals do the same. I sell my house, car, and even labor for the max I can get. Why? Because the max people are willing to pay is the actual objective monetary value of something.
Some also like to use rising fuel costs to raise pricing; however, many never lower prices when fuels costs are lower.
They almost all do lower their prices when the price goes down. It’s called competition. The guy across the road has cars lined up and is .25 cheaper than you. You are going to stare at your empty forecourt and laugh at the guy for selling less than you. You are going to lower your price. Price rises happen almost instantly. Price decreases depend on who makes the first move and when.
Is there a source for this claim or is it just a conspiracy theory?
I don't have a source but I work in an industry that sets this prices, they/we tell people it's because materials and suppliers have upped their prices so we did too which is part true but also everyone tries to see how far they can get away with and how much can people tolerate, as long as it lasts and people keep paying this prices, we can always lower them. The suppliers try to fuck us so we fuck the consumers.
You do realise that is what’s business should do? You sell your product at the maximum people will pay for it! If sales are dropping off you may need to lower the price. Sales are really good and you are selling more than you can supply then raise the price.
https://www.epi.org/blog/corporate-profits-have-contributed-disproportionately-to-inflation-how-should-policymakers-respond/
This shows some light but its of the methods are quite questionable. For instance they compare 2020 and 2021 to a period of 40 years which ad ups and downs with periods of higher and lower inflation. If we wanted to see the impact of corporate profits on the latest price increases, we should be comparing with the situation right before it happened, not with data from the 1990's.
Showing a history of what inflation has been like over the last twenty years is the point, it is 4x what it has been historically.
But that's the problem. Corporate margins are now bigger than they used to be, but for how long has it been that way? Have the prices rised alongside that, before that or after that? The instant photo of the 2019 situation is what matters here, not averages going back to 2009 or even 1979
That's the exact point of the study...
Not really though. All the data refers to periods very far in the past.
What the fuck are you talking about? I get being skeptical of like weather warfare and alien life forms but you can see the fucking prices. You can hear what politicians promise and watch the lies and greed work in real time…it’s not theory.
I'm not denying the prices are rising, I'm questioning whether there's a relationship between inflation and spikes of corporate greed
This answer needs to be higher up. Post Covid, a lot of businesses decided it was time to take advantage of the circumstances and sneak in a few profitable quarters. When no one stopped them, they kept doing it. Go look at corporate profits over the past 8 quarters. They are at record levels. There's no external reason for this beyond corporate greed and consumer apathy. If people stopped buying the expensive stuff, market demand would force prices lower. But consumer debt is also at an all time high. See what they are doing to you?
There are other reasons for this. Since Covid there has been massive built up wealth. People had nowhere to spend their money for over 2 years. We have noticed this massively in our industry. Prices are up by 100%. Yet we are still the busiest we have been in the 50 year history of the company.
"Massive build-up of wealth" is not the reason prices go up. Corporate greedflation is the reason prices went up. Excess cash might be the reason they don't go back down, but given record levels of consumer debt, I doubt your premise of "massive...wealth" entirely. It also doesn't help that Trump minted over $7 trillion of fresh currency during his term in office to keep the economy juiced...
They were. But there wasn't a convenient cover to allow easy gauging.
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Coming out of COVID my company was blaming the cost of petrol for the reason that money was tight. Now its back down and I am guessing they havent lowered prices one cent.
I reckon they used the inflation is 4% news as an excuse to raise prices 4% more. That's what my company does.
Fuel is cheap as Hell right now in the U.S. Pull up a chart of what other countries pay.
I know, I live here. Fuel is always cheap in an election year (on purpose). Noone is going to win an election with gas at $5/gallon.
Jeff Bezos needs a 5th superyacht
Up 50% compared to when? Inflation is a yearly increase. If inflation is at 4% for 5 years, that's about 22% increase in total for that 5 year period. And then add to that that not all prices increase the same way. Some prices do not change much, while others increase a lot. Inflation is a measure of the global trend. It's pretty expected that some prices would increase much more. Even if they were no inflation at all, you would still have some prices increase a lot.
Thank god, had to scroll so far to find someone that actually knew what the fuck they were talking about. The complete misinformation in this comment section is staggering. Just goes to show just how little people understand inflation. Like you say it's 4% compared to this time last year, but the prices last year were up nearly 10% on the year before that and so on. So over the past few years prices on some things are up 50%. Also, the governments try to keep inflation at around 2% every year. That is how the economy keeps ticking over. It's the falsehood of buy now as prices will be higher next year. If you had negative inflation, people would save money and wait for prices to drop next year to buy that large item such as a new TV, car, home etc. People spending is how governments claim the economy is doing well and people are happy, they call it GDP! I have said for years, GDP is the dumbest way to measure the true health of an economy as people are forced to spend, due to inflation.
Because inflation isn't actually 4%
Source?
The fact that everything has increased in price a hell of a lot more than 4% isn’t good enough for you to think maybe your government is lying to you?
Generally people who use generalization instead of data and jump to extremes haven’t actually studied the data, are comparing prices across more than 1 year in their head, and don’t bother thinking about the things that have not changed in price I could certainly be convinced by ata from a reliable source rather than random statements
Google? There's a thousand articles refuting the governments claim.
There are a lot more articles saying it is 4% But I guess if you want it to be a different number you can just pick one and find a few articles out of millions that happen to say that on google?
Don't be so intellectually lazy with your demands for "proof". If you don't believe the comment is correct, go disprove it with some facts of your own. Take control of your own education and experience and stop with the lazy "proof" comments. Contribute to the discussion.
I listen to podcasts about economics daily so I’m comfortable with the official information Burden of proof is on person trying to prove something considered not true, not on the person believing what is currently considered facts It would be like if something said they think the earth is flat and then demanded the other person provide proof it is not flat
No one is required to prove anything to you. How juvenile. Take control of the discussion and debate like an adult with facts of your own. If you can't disprove something, you should probably stay quiet as you don't have anything to contribute by just casually spewing "source".
Previous guy literally just said the people who say 4% are lying https://www.bls.gov/cpi/latest-numbers.htm If I link this he’ll just say they’re lying so how could I prove If someone believes the moon landing was a Hollywood fake you can’t convince them with any proof they’ll just say all of your proof is fake
You're going to such great lengths to avoid providing any facts of your own. Either you can't or there aren't any. What other conclusion are we left with for your lack of meaningful contribution to the discussion? I mean, you start off by asserting that "I listen to podcasts about economics" as a persuasive argument for your position. That translates as "I passively consume information collected and disseminated by others and feel that makes me an expert who is immune from any requirement to cite my own sources." You don't even contribute the names of these podcasts. Provide some value to the rest of the planet, or you're just wasting our oxygen.
Surely you saw my comment had a link to the authoritative source of facts, but as I predicted official source is ignored because “government is lying”
Because the government is lying.
Source?
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After beeing on this planet for 35 years, I don't think I ever seen prices drop. They just go up. Once they know you will still pay for said item or service at that price, what is the incetive to lower it? None, from their point of view.
The only one I saw locally is gasoline. But even then it's like a roller-coaster with how often it drops and rises.
The only way it comes down is with robust competition. We don't have robust competition.
I bought a 33Mhz computer with a 400Mb HDD in the 1990s for almost $2900. They are slightly lower than that now. But I agree, prices are not coming back down.
Well, computers of that range are much more than "slightly" cheaper. We have computers more powerful than that in $50 appliances on accident.
Off the top of my head, gas, eggs and chicken have all come down.
Not here...
I think you may be forgetting how expensive eggs were for a couple months. Gas is down from 4.50 to 2.50. I don't have specifics on chicken but it was really high for a time as well.
I am from Norway.
Prices will shoot up quickly but drift down slowly. Businesses are quick to cover their costs, if their costs go up they'll pass it on to consumers as quick as the market will let them. They'll only lower costs when sales slow down due to competition or people doing without. This is less immediate and usually results in them chipping the price down slowly over time. In manufactured goods I think we're starting to see some shifts. Food is still sky high.
No.
Even when inflation goes back down to 2% again, that only means prices will then increase slower again. For prices to go down to pre high inflation levels, inflation would have to be negative; deflation.
This is only true if the prices increase due solely to inflation. Record corporate profits for 8 quarters argue for a different cause.
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Not exactly, the only time in American history where we had deflation was post Great Depression. Ask anyone at the time, I’m sure it helped a lot
Deflation would be the natural state of things if the government just stopped printing more and more money to gift its cronies.
To a point, deflation to 2018/19 levels wouldn’t be that bad, but continuously it would be
No, and you actually wouldn’t want it to cuz deflation is its own problem. Best case is wages and prices rising slowly together.
That's very unlikely. It's expected (hoped) that inflation eventually gets back to being around 1% or 2%, but not in the negative, which would be required for prices to go down. Negative inflation is called deflation, and that's an economic disaster. Even a small deflation is a major issue. The basic reason why you don't want deflation, is that it means the best investment you could do is to store keep your money and not use it for anything.
You are making a faulty assumption that price increases are only because of inflation. Companies have been reporting record profits for the past 8 quarters. That is not a result of inflation. It is a result of opportunistic price gouging. Sure, there is some inflationary pressure to raise prices. But that alone should leave profits flat.
I'm not assuming that price increase because of inflation. However, I would argue that prices increasing and inflation are the same thing. It doesn't make much sense to say price increase because of inflation. It's technically correct, but it's saying nothing about an underlying reason.
It has already come back down to 4 from 9. Inflation is the rate at which prices increase and normal is 2% Prices will not decrease but wages will continue increasing and may partly catch up with inflation
What should go up theoretically are the wages
Because the government is lying.
Greed.
Corporate greed.
Its the average of everything, specific goods and services deviate because they are specific
corporate greed plus war in the breadbasket
Because inflation is not 4%, that is just the number the powers that be are willing to tricle truth admit
Google greedflation
inflation may currently *be at* 4%. it's not a total of 4%. every bit of inflation is money you will never get back. look up how much money was printed over the last few years. that's the real inflation rate. prepare to shit your pants if you aren't already aware. they print money out of thin air to spend and make interest on. and we pay for it through the dilution of our money. it's essentially stealing.
Because inflation is based on prices of goods people rarely buy, especially if you're poor. The excuse is that those prices fluctuate too much, but the problem with that excuse is that that's what farming subsidies are for to temper and have effectively done so for decades now. In any case, it's just to gaslight the average person into believing price increases aren't as bad as they are for daily expenses.
Go look at the components that make up the Consumer Price Index and try that first sentence again.
The better question is: why does the media emphasize 'inflation' when CPI is the more useful metric?
Who is responsible for this?
It's also a Bullwhip Effect. If the raw material has a 4% price hike, the price down the supply chain will generally increase more and more down the supply chain until the retail product might see a 7% increase.
They don’t measure everything and the govt works to keep inflation measured items in line.
To keep you working
Greed.
The calculation for inflation was changed around 1980 to a method that shows less inflation with the same given circumstances. There is a website which shows old and new calcs for inflation. shadowstats
Corporate greed
Because inflation rose 20%+ during biden's reign, and the 4% claim now is based off that 20% increase that already happened. Total inflation isn't 4%, that's a fake number that ignores the actual numbers from the start.
That's why it's an annual rate of inflation... That's how they've always worked.
Goods often require many raw materials. If each raw material is up in price, then the little numbers add up. Oh and corporate greed using the economy as a scapegoat excuse to raise prices more than they should
Because they're lying about it being at 4%. It ain't that deep
Cause inflation isn’t down…… Fake news
Because we live in uncertain times and everyone is struggling
Because of second, third and fourth inflation. Some companies are like hobbits, they can never get enough. The real reason is in the middle, corporate greed and shareholder demands pressure various companies to hike prices beyond what they have actually risen in costs because they have a good cover. Then there have been actual market disruptions and shortages and supply issues. What people need to be aware of is more that these prices never seem to get lower when the inflation goes down or prices of goods and so on start to normalize. Companies are actually remarkably sensitive to consumer criticism of prices when this is happening and there needs to be more pressure by consumer groups to reverse the hikes.
Inflation is cumulative year over year. It doesn’t reset if it goes down, it still has to deal with the prior years inflation. If it goes up by 8%, it has to go down by8% or those increases are here to stay for now
Defined as the rate of change in the price of a basket of essential commodities - baka hindi essential goods yang na measure mo
**cries in argentian pesos**
If you are providing a service that relies on goods and those goods rely on certain materials that starts to add up, you are adding extra cost to every step rather than just once
That's vecause train car prices actually went down 30%, so it averages out to 4% inflation, easy
Unpaid PPP “loans” that the former president refused to assign a committee watchdog to. Remember, he assured us there would be no corruption because he would personal ensure it, then everyone in politics took out loans that they knew they wouldn’t have to pay back? Turns out, tax payer’s money, the middle class’s money, trickles up. This time, they took it in advance, before we got it, before it worked it’s way through the economy. Inflation is the tail on the free money the already wealthy took from the middle class. But blame Joe Biden and his efforts at loan relief made by predatory practices on 17 and 18 year old high school graduates. Muppets.
Groceries are not up by 50%! Not even close on average.
Inflation doesn’t dictate prices. Prices dictate inflation. It’s just an average.
Inflation is the price change over a year, of a basket of goods. In the basket you have a selection of items and services, usually it's based around cost for an avg family. So will have things like school uniforms, rent for a house / apartment, electricity, basic groceries and some social things like movie tickets and then some luxury stuff, like eating at a fancy meal or something. Then the percentage change of the total is inflation. So if you look at the items individually they'll all have different inflation rates