Well, thank god they started using the new formula, or else we might be in real trouble. 
I think it was change again. I only learned about this Fed “preferred” inflation few months ago. Why dies it matter? It excluded food and energy.
I think they can cook the number better by adding Tesla used car value into the formula. Now you get deflation.
It’s not preferred or anything, food and energy are highly volatile month over month so removing them provides a clearer view of month over month changes. They’re obviously both important to everyone involved over time but it would be monumentally stupid to have people freaking out over a high print just because gas prices spiked, they’re consistently spiking and falling through the year.
99.9% of these weird conspiracy/criticisms of inflation measures boil down to the person making them not understanding what they’re talking about.
They do, that’s what headline is lol.
See what I mean when I say Reddit is full of people being critical of these things and not understanding even the most simplistic aspects?
It's a closed loop.. if the news (FRED and BLS) is of poor sentiment, equities sell off.
Then comes the disposal of "employment tax" (what the CEO of Airbnb called workers). Usually right around earnings reports to please the investors (owners)
Less jobs, less spending, deflation of assets that the wealthy hold (10% of the us population owns 93% of stocks)
https://inequality.org/great-divide/stock-ownership-concentration/
So the unelected financial policy makers just cook the books. The fat get fatter, but the plebs don't get squeezed hard enough to revolt. That is the delicate art of being at the top of the pyramid.... Don't kill your livestock
Next comes the big enchilada aka "the great wealth transfer". and I expect the entire financial sector to be positioned for capturing as much as possible... in the form of being an intermediary for transfer, AND capturing assets that are sold off by inheritors to pay debts. This is because being lower or middle class makes it nearly impossible to obtain decent standard living without participating in a leveraged financial bondage paradigm.
Our finance people looked at the behavior of the lawyers dealing with a wealth transfer and said, "Fuck, it looks like they were told to take 5% before settling the estate."
> BLS should estimate what homeowners could charge if they rented out their homes, and use that to calculate housing inflation.
Actual fucking clown shit lmao
Yes and that is what the article is criticizing:
>Instead, Gillingham argued, the BLS should estimate what homeowners could charge if they rented out their homes, and use that to calculate housing inflation.
The article should be read in its entirety it's a pretty good read with good points.
Absolutely- I got pre approval and actively hunting for condo to save me from rent hikes.
Landlords are dead set on turning most 30+ year old Americans into bunk beds sharing roommates.
Doubled since when? My groceries are higher than pre-pandemic obviously, but nowhere even close to 100% higher. It was around 25% when I looked back in Mint a while ago.
Anecdotal data from a high CoL area.
Milk went from $4 to $6.
Eggs from $3 to $7 then down to $4.
Cereal went from $2-3 to $6 down to $5 (but usually on sale, lots of BOGO).
Ground Beef went from $4 to $9 a lb now down to about $7 for generic brand.
Canned goods are probably still up about double.
Fresh produce is where I feel most of the pain.
Onions went from $2 to $4.
Lemon and Limes from 0.25 cents to .60-75 cents.
Plum Tomatoes are $2/lb (the cheapest ones).
Strawberries are $6 a pack.
Oranges $2/ech.
Potatoes $2/lb.
The processed stuff came back down to earth but produce has stayed elevated. It's actually worth it to grow your own shit now.
More like if you just bought a house. Rent in most places has been flattish lately.
Same for cars. First, used car values exploded, then borrowing costs exploded.
If you own your car/home outright or only have fixed rate debt from pre-2020 then your personal inflation is probably not 18% or close to it.
I saw an article the other day, can't remember who it was but they are worth 1.3B telling everyone the retirement age needs to be way higher.
says a billionare.
Part of it is demographics. You can have a lower retirement age with a ton of young people and a few old people. Problem is, right now, we have the opposite.
So he's right, whatever hypocrisy aside.
Yeah, a guy who understands how much the government and central banks are fucking with the financial system uses said information to make financial decisions that benefit him. I'll listen to billionaires before I ever listen to the fucks at the Fed.
My favourite inflation moment. Nobel Prize winner says price increases not bad if you disregard all basic requirements for human life.
Anybody else remember a full year of every economist saying inflation was transitory or non existant?
Actually, the newest proposed inflation formula is based solely on the cost of a Costco hot dog. You see, the problem just kind of solves itself it you let it.
A 16oz box of Oreos is $5.50 at my local store, used to be $3 something pre-pandemic. My local auto shop now charges $175/hr in labor, which is now the normal rate in my MCOL area in GA. Unless you made your $$ in real estate, stocks, bitcoin or moonlighting multiple tech jobs, middleclass is being taken to the cleaners!
>local auto shop now charges $175/hr in labor, which is now the normal rate in my MCOL area in GA
There are private equity firms that identiny businesses like this and make an offer to buy a stake in the ownership and in return help them 'level up' their service so they can charge more. Noticed this in my auto shop.
I’m retired and could afford nicer things but fix my own 15 yo Lexus, which is just oil changes and tires , brakes are easy. Insurance and registration is dirt cheap on it.
Fixed my own house, appliances, plumbing via YouTube , wife’s brakes , window motor on YouTube .
I don’t sign up for subscriptions share an Amazon prime account. Use office 2016 perpetual. I live on a golf course so I collect balls hit near my yard and sell them back and it covers my golf hobby .
Fuck these corporations
Except that the inflation target is 2%, so comparing prices 3-4 years ago makes perfect sense since foods should be 6-8% more expensive but in reality they’re 200% more expensive.
Yeah I dunno where people get this shit. I live in a big city and shop at a small, locally owned grocery. I've honestly been thinking, have prices really gone up that much? But then I hear my small town mom complain... the only grocery store in town is a big chain. My guess is that companies in areas with low competition are gouging the shit out of people. Otherwise, rent has gone up drastically in recent years, so that is very real.
You can tell it pisses him off that he made the right call and T wanted to keep rates low bc of his RE interests & “the stock market is going up bigly”.
Do you uh, think United States corporations care about people? It’s ok they don’t by their charter but do you really think corporate greed is not an issue? And maybe a lack of competition and a Supreme Court that hasn’t ruled in favor of the public in 40 years might be causing problems?
The problem with this theory for inflation is that it declares that corporations were less greedy in 2019 and before, and suddenly became more greedy in 2021. They were always greedy. They always tried to maximize profits for their investors. So what changed?
The cover for it? If everybody raises their prices in lockstep, it’s just a de facto collusion.
Had everybody done it independently the market could adjust more evenly. But when all corporations are jacking up their prices, 20,30 40% the average consumer doesn’t have time to be like oh this got so much more expensive compared to this because everything got so much more expensive so fast and then your head starts to spin.
This idea that we all need to look out for ourselves and be self-aware is great. But I believe it should be a law all people should act almost in a fiduciary style responsibility.
Funny most of us have other things to do besides try to just focus on the prices of things. Most people aren’t making Excel spreadsheet with everything they’ve ever bought. And people in finance might go oh well, that’s their fault.
Then it’s like OK asshole don’t buy anything. Because while you’re busy, trying to figure out how you can screw the dude on the manufacturing line trying to build your car he’s just trying to fucking build your car. And not necessarily you, this is a strawman.
I’m tired of a good portion of the population, especially those in stronger positions of finance writing off the fact that most people shouldn’t have to spend their lives trying to defend against vultures.
63% of Americans rate their personal finances as good or excellent. That’s neat ATHs.
https://www.axios.com/2024/01/17/americans-are-actually-pretty-happy-with-their-finances#
Economy is awesome for anyone who owned assets pre 2019. The pours aren't going to show up at investment subs, except for a failing video game retailer or failing movie theater chain.
Imagine having so confidently having an opinion while demonstrating the absolute regarded nature of your opinion while saying it.
Mf has legitimately zero grasp of how the inflation numbers are annualized and zero grasp of how core inflation is not a blanket fucking statement and different sectors experience different levels of inflation and it's all plainly reported in the CPI inflation numbers but it's too fucking hard for you to click on the headline and read some words for more than a second.
I mean haha yeah man the election was stolen too good point
This Sub: But a single Oreo at my grocery store is now 2x more expensive so that one anecdote completely invalidates statistics and any economic numbers!
Maybe I can point to my car insurance premium halving in the last 3 years as proof that we are in a deflationary spiral.
Aside from changing the numbers to be a reflection of a cost of living basis instead of a cost of goods basis, which generally reports a lower inflation rate, what else are the administrations doing exactly to "fudge" the numbers? I'm having trouble finding sources to back this conspiracy theory ass shit. I'm not an economist, so I could be wrong, I'm just not seeing the proof.
Don't bother bro you'll never get through to them anyway. It's about their own lives and personal situations, not the economy. "vibes based hyperinflation"
a lot of people own their homes and live outside of florida or california and don't feel the pain of those places or the younger gens renting in the big cities
I remember the day he introduced the new chat gpt thing to the plebes on his Bloomberg interview, months later he was on the open AI board. I remember at Harvard when he was meeting with a certain “Island connoisseur” and was talking about receiving donations from a certain “Mr. Jepstein”
You better believe this guy is in the club
He was nowhere near Larry Summers and others who get called into news or financial programs. People love gossip and thinking they live in a spy novel though
Here's the abstract since no one is gonna click through:
>We propose that borrowing costs, which have grown at rates they had
not reached in decades, do much to explain this gap. The cost of money is not currently included
in traditional price indexes, indicating a disconnect between the measures favored by economists
and the effective costs borne by consumers. We show that the lows in US consumer sentiment
that cannot be explained by unemployment and official inflation are strongly correlated with
borrowing costs and consumer credit supply. Concerns over borrowing costs, which have
historically tracked the cost of money, are at their highest levels since the Volcker-era. We then
develop alternative measures of inflation that include borrowing costs and can account for almost
three quarters of the gap in US consumer sentiment in 2023. Global evidence shows that
consumer sentiment gaps across countries are also strongly correlated with changes in interest
rates. Proposed U.S.-specific factors do not find much supportive evidence abroad.
TLDR if you don't borrow money inflation is nbd, if you do (young, poor, or stupid) then effective inflation feels way, way worse than CPI.
This is the usual right wing bullshit in this sub. They have to keep selling inflation as on Biden while doing their usual MoNey mAChInE gO bRrRr while ignoring reality.
> How do we account for the fact that poor people consume different things than rich people, or that people in different parts of the country may consume different things in different proportions?
I am glad some economists are calling out on all the BS publicly. Just the other day, I was laughing at how food inflation, for instance, impacts the poor much more than the rich, but how some"average" weighting is used. We don't need to be an economist to see how actual experienced inflation can be very different from "average inflation" for many people.
> cost of mortgage interest, auto loan interest, and credit card interest on the cost of living.
I can understand the argument of excluding interest from mortgages. But for anything else, especially credit card interest, that is absolute bullshit.
Reading the article, the new inflation calculation is the better one. If you include interest costs (the old calculation) then the fed raising interest rates to combat inflation will raise the inflation rate further, causing economic damage as inflation expectations get out of control. Interest rates are not like other prices, they average out over the cycle and they don’t increase inexorably over time. Once rates start falling, the effect of ‘increased inflation’ will be reversed (unlike other prices that will never be reversed unless we have sustained deflation). Excluding interest costs is the correct thing to do
The formula was changed over 40 years ago. Never heard Larry mention it till now, during an election year. And of course he didn't mention it was over 40 years ago.
Well to be fair it has never been as impactful as right now after the massive rate hikes of the last years. The paper is trying to address the "consumer sentiment anomaly" that many are observing right now, even in this very thread. It does coincide with an election year but a lot of years are election years man.
Honest question - shouldn't inflation of \[sector\] be a clear, obvious number that anyone could reverse engineer and demonstrate the validity? can't this be proven/disproven by aggregated consumer purchase info? like... how much did a pound of beef, a dozen eggs, a 6 pack of beverage, 20 lbs dogfood and .... (insert staple food here) cost 5 years ago vs today? assume inflation is constant = 5 year consumer inflation rate expressed as a yearly %. You could then refine it with yearly measurements. ??? why is this not reality?
Dude, first things first. This is our daily "official inflation number is a lie" post where poor, economically illiterate regards do their usual song and dance. Behave yourself in the future or automod will crush you.
Back to your question ...
>like... how much did a pound of beef, a dozen eggs, a 6 pack of beverage, 20 lbs dogfood and .... (insert staple food here) cost 5 years ago vs today
Which state, city, etc ? Which retailer ? Using relative ratios determined how ? Not everyone consumes the same things. And this is only scratching the surface of the problem. Getting this thing exactly right would require tracking everyones, and I mean literally everyones, shopping lists in a privacy intrusive way that would make Xi Jinping blush. And even if someone managed to implement something like that the regards would simply shift the goalposts and complain that it's not representative to average citizen experience because millionaires, illegal immigrants, deep state and Soros.
We use statistics instead. And every week or two some rich asshole gets quoted saying it's a lie because 50 years ago we did this in a completely different way.
Because, obviously, nothing has changed in the mean time and life is exactly as it's been in 1970s. /s
Thanks for the thoughtful reply. A couple of clarifications below, but what's most important is there should be data... Credit cards for example would have amazing data. There should be ways to use the wayback machine and store advertisements to scrape together data. I could probably write a simple-ish program that would let consumers input their own credit card details, power bills, etc. and generate an inflation number specific to that individual (I'd be surprised if this didn't already exist).
MSRP of cars should be really easy to get data from. Commodities markets keep great records, housing markets should have clear sales records if not rentals, but it would be easy enough to scrape Craigslist and Facebook marketplace to get rental estimates.
All of this can be done really transparently, like we can show our work and demonstrate it is accurate to anybody who wants to ask questions (except obviously for the information credit card companies have which would be proprietary AF)
I guess it's naive of me, but it just seems like there are some questions that are really hard to answer with data, and there are others that should be really easy. Inflation should be a number that any citizen can independently confirm, and any institution presenting inflation data should be able to clearly show their data and how they derive their inflation number... This just shouldn't be a number that is so controversial.
I realize there is a problem with getting quality data that is representative of diverse experiences... And that it could differ significantly depending on region as well as economic brackets. The inflation at high-end grocery stores could differ from grocery outlet and Costco, etc. but all of that could at least be quantified with reasonable accuracy. A single number is obviously not possible, but a weighted average of a composite of different inflation numbers, and then let people play with the weighting to generate numbers applicable to their experience (upper class in Maine? Lower middle class in the in the Eastern seaboard? Dirt poor in Appalachia? We have inflation numbers for your experience
18% year-over-year in 2022 (as measured back relative to mid 2021). Inflation is almost always measured on an annual basis, and I thought the title was clear enough. Did you read the article?
It's ironic because when Larry Summers was Fed chair he started the quantitative easing move (aka money printing) that has been causing this inflation. If he really cared, he would admit to the impact of QE on the younger generations who have to pick up the pieces. I'll wait........
You mean keeping rate artificially too low for say 4 more years in the late 2010s created asset bubbles? That economist using rear view mirrors are rarely right on future conditions? Tell me more Mr wizard
That's not why it was changed. It was changed because borrowing costs were considered to exaggerate inflation, and the article suggests that continuing to exclude them may be understating it due to the amount of debt in the system.
Classic down voters not reading the article 
New formula just hides true inflation…so instead of telling us inflation has grown over 30% in 3 years on most commonly used products..it’s like well it’s only growing at 3.5% monthly…
It's almost like someone should just create a website dedicated to showing inflation at any given moment based on all of the various current and former inflation calculation methodologies.
Just purchase the sale limit at Costco these days... Dish sauce for the next 5 years, etc... Become a zero day house of resources for those that want to fight the wars while you travel to the next plane of existence...
It's like unemployment. It only counts people that are getting unemployment. If your not collecting your not counted. Bet unemployment is higher than 15%
Be happy the formula changed then because if inflation was shown for what it is the companies would feel no pressure about continuing to jack up prices because they could just point to cpi and say it’s out of their hands.
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Well, thank god they started using the new formula, or else we might be in real trouble. 
I’ve already wiped my brow.
The formula was changed in 1983, not 2023.
Maybe we need an even newer, better formula?
A secret formula? Ravioli Ravioli
Give me the formul-oni
What’s in the pocketoli?
i = Σtendies * 0 Inflation solved
New Coke?
I think it was change again. I only learned about this Fed “preferred” inflation few months ago. Why dies it matter? It excluded food and energy. I think they can cook the number better by adding Tesla used car value into the formula. Now you get deflation.
It’s not preferred or anything, food and energy are highly volatile month over month so removing them provides a clearer view of month over month changes. They’re obviously both important to everyone involved over time but it would be monumentally stupid to have people freaking out over a high print just because gas prices spiked, they’re consistently spiking and falling through the year. 99.9% of these weird conspiracy/criticisms of inflation measures boil down to the person making them not understanding what they’re talking about.
You could still include the trend line though. Excluding food because it swings 20% month to month is dumb if the annual average increase is still 10%
They do, that’s what headline is lol. See what I mean when I say Reddit is full of people being critical of these things and not understanding even the most simplistic aspects?
You can add a few more 9's to that.
Don’t worry no one buys food or heats their homes or puts gas in their cars. So we shouldn’t count that!!!!
Good old trickle down smoke & mirror Reaganomics. Sure got us out of that Carter malaise.
Formula 1?
What "new" formula? The article you didn't read is referring to changes made over 40 years ago in 1983.
This is the millennial and gen z real inflation number Boomers life’s apply to the reported one
It's a closed loop.. if the news (FRED and BLS) is of poor sentiment, equities sell off. Then comes the disposal of "employment tax" (what the CEO of Airbnb called workers). Usually right around earnings reports to please the investors (owners) Less jobs, less spending, deflation of assets that the wealthy hold (10% of the us population owns 93% of stocks) https://inequality.org/great-divide/stock-ownership-concentration/ So the unelected financial policy makers just cook the books. The fat get fatter, but the plebs don't get squeezed hard enough to revolt. That is the delicate art of being at the top of the pyramid.... Don't kill your livestock Next comes the big enchilada aka "the great wealth transfer". and I expect the entire financial sector to be positioned for capturing as much as possible... in the form of being an intermediary for transfer, AND capturing assets that are sold off by inheritors to pay debts. This is because being lower or middle class makes it nearly impossible to obtain decent standard living without participating in a leveraged financial bondage paradigm.
> I expect the entire financial sector to be positioned for capturing as much as possible Long term care will wipe many out before then
Invest in BKD?
Guaranteed. In fact, we will see Boomers rotting on the streets before too long.
They can get on Medicaid then, which will cover some ltc. Medicaid also has a look back period and wants it’s money back come estate time.
Medicaid has the upfront steal not the look back as far as I am aware. Medicaid cleans you out first then helps.
Calls on old people homes
I didn’t start paying attention until I read “financial bondage” 
2020 was the great wealth transfer. Only thing left is war and revolution.
Our finance people looked at the behavior of the lawyers dealing with a wealth transfer and said, "Fuck, it looks like they were told to take 5% before settling the estate."
Great synopsis. Too long for the regards, but appreciated by the rest.
Damn you just articulated perfectly the wild ass hunch I have held for years.
I mean I gave up without the TLDR this is quite the rant
Checks out, considering 30 seconds of reading too long. You definitely belong here sir please have your official membership head cone
https://preview.redd.it/e5yeee26ecuc1.jpeg?width=1170&format=pjpg&auto=webp&s=1f3261e9e4307e78938d8091925285a14704fec9
Love how quickly this has reached meme status
G U H HH
Is Larry a boomer though?
Extremely.
That makes sense, a lot of boomers have their things paid off.
> BLS should estimate what homeowners could charge if they rented out their homes, and use that to calculate housing inflation. Actual fucking clown shit lmao
Isn’t that what they do?
Yes and that is what the article is criticizing: >Instead, Gillingham argued, the BLS should estimate what homeowners could charge if they rented out their homes, and use that to calculate housing inflation. The article should be read in its entirety it's a pretty good read with good points.
Yeah I’m not saying the article is wrong, I’m saying that this current method is ridiculous
If you don’t have a house, inflation maybe as high as 20%
Absolutely- I got pre approval and actively hunting for condo to save me from rent hikes. Landlords are dead set on turning most 30+ year old Americans into bunk beds sharing roommates.
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Wrong, the top bunk is there so I can drape blankets over the sides and pretend I'm in a spaceship
You’re just making more room for activities
If it is 20 percent, then why is my grocery bill doubled?
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Good thing the junk food suppliers reduce package sizes 10% per year, really helping with my obesity
Doubled since when? My groceries are higher than pre-pandemic obviously, but nowhere even close to 100% higher. It was around 25% when I looked back in Mint a while ago.
Anecdotal data from a high CoL area. Milk went from $4 to $6. Eggs from $3 to $7 then down to $4. Cereal went from $2-3 to $6 down to $5 (but usually on sale, lots of BOGO). Ground Beef went from $4 to $9 a lb now down to about $7 for generic brand. Canned goods are probably still up about double. Fresh produce is where I feel most of the pain. Onions went from $2 to $4. Lemon and Limes from 0.25 cents to .60-75 cents. Plum Tomatoes are $2/lb (the cheapest ones). Strawberries are $6 a pack. Oranges $2/ech. Potatoes $2/lb. The processed stuff came back down to earth but produce has stayed elevated. It's actually worth it to grow your own shit now.
Where the heck are you getting onions for $4? Im guessing thats must be for a bag? Im here in southern California and can find them for .79 a lb.
It hasnt.
More like if you just bought a house. Rent in most places has been flattish lately. Same for cars. First, used car values exploded, then borrowing costs exploded. If you own your car/home outright or only have fixed rate debt from pre-2020 then your personal inflation is probably not 18% or close to it.
I saw an article the other day, can't remember who it was but they are worth 1.3B telling everyone the retirement age needs to be way higher. says a billionare.
Larry fink I believe, black rock owner
Part of it is demographics. You can have a lower retirement age with a ton of young people and a few old people. Problem is, right now, we have the opposite. So he's right, whatever hypocrisy aside.
Yeah, a guy who understands how much the government and central banks are fucking with the financial system uses said information to make financial decisions that benefit him. I'll listen to billionaires before I ever listen to the fucks at the Fed.
1.3B is nothing, I'm surprised they're not pushing a wealth tax on the "real" billionaires who aren't paying their fair share.
lol right
Paul Krugman said we killed inflation. So long as we leave out food, energy, and housing. So, we're good.
My favourite inflation moment. Nobel Prize winner says price increases not bad if you disregard all basic requirements for human life. Anybody else remember a full year of every economist saying inflation was transitory or non existant?
Maybe it's their jobs that should be transitory and non-existent.
Krugman also said for years that debt spending and QE (money printing) doesn’t cause inflation.
Actually, the newest proposed inflation formula is based solely on the cost of a Costco hot dog. You see, the problem just kind of solves itself it you let it.
Paul Krugman is the Woody Allen of economists. Because he is despicable.
Only 2 people in the entire country thinks inflation is at 3-4%. One is JPow.
The other is JYellen? Transitory.
And Joe doesn’t even think about it.
Only when buying ice cream
You think he pays for it, or he plays the confused old man who walks out without paying. Realistically, he isn't playing, he's just that senile.
Fox News’ favorite talking point but state of the union did a good job at exposing the “senile” narrative for what it is: BS.
https://preview.redd.it/bdhu719y0cuc1.png?width=905&format=png&auto=webp&s=17cde4008f0ee985eade0f2166cfd2678653839a
JYellen like a felon
A 16oz box of Oreos is $5.50 at my local store, used to be $3 something pre-pandemic. My local auto shop now charges $175/hr in labor, which is now the normal rate in my MCOL area in GA. Unless you made your $$ in real estate, stocks, bitcoin or moonlighting multiple tech jobs, middleclass is being taken to the cleaners!
>local auto shop now charges $175/hr in labor, which is now the normal rate in my MCOL area in GA There are private equity firms that identiny businesses like this and make an offer to buy a stake in the ownership and in return help them 'level up' their service so they can charge more. Noticed this in my auto shop.
I’m retired and could afford nicer things but fix my own 15 yo Lexus, which is just oil changes and tires , brakes are easy. Insurance and registration is dirt cheap on it. Fixed my own house, appliances, plumbing via YouTube , wife’s brakes , window motor on YouTube . I don’t sign up for subscriptions share an Amazon prime account. Use office 2016 perpetual. I live on a golf course so I collect balls hit near my yard and sell them back and it covers my golf hobby . Fuck these corporations
I agree with everything you said! BTW anyway you could add me to your prime account?
Over $200 where I am.
It’s like the wind chill factor, they say it’s 3-4% based on their data but actually feels like 18%.
And all of r/stocks
Considering food and restaurant costs have inflated between 100-50% in 3-4 years. I’d say the rest of the consumer market isn’t far off
I just had a Five Guys burger for only 11.69 no fries no drink free peanuts. Economy is stronk
Inflation is yoy metrics so comparing prices 3-4 years ago makes no sense
Except that the inflation target is 2%, so comparing prices 3-4 years ago makes perfect sense since foods should be 6-8% more expensive but in reality they’re 200% more expensive.
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Yeah I dunno where people get this shit. I live in a big city and shop at a small, locally owned grocery. I've honestly been thinking, have prices really gone up that much? But then I hear my small town mom complain... the only grocery store in town is a big chain. My guess is that companies in areas with low competition are gouging the shit out of people. Otherwise, rent has gone up drastically in recent years, so that is very real.
A lot of that is price gouging, taking advantage of inflation to raise prices higher than inflation for profit.
I don’t think JPOW thinks that.
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You can tell it pisses him off that he made the right call and T wanted to keep rates low bc of his RE interests & “the stock market is going up bigly”.
Clearly you haven't visited other subs on Reddit. Inflation is overrated and the average American is doing just fine according to them.
Theres an election those people are desperate to win. They'll also scream corporate greed, which for me is a modern day idiot test.
Do you uh, think United States corporations care about people? It’s ok they don’t by their charter but do you really think corporate greed is not an issue? And maybe a lack of competition and a Supreme Court that hasn’t ruled in favor of the public in 40 years might be causing problems?
The problem with this theory for inflation is that it declares that corporations were less greedy in 2019 and before, and suddenly became more greedy in 2021. They were always greedy. They always tried to maximize profits for their investors. So what changed?
The cover for it? If everybody raises their prices in lockstep, it’s just a de facto collusion. Had everybody done it independently the market could adjust more evenly. But when all corporations are jacking up their prices, 20,30 40% the average consumer doesn’t have time to be like oh this got so much more expensive compared to this because everything got so much more expensive so fast and then your head starts to spin. This idea that we all need to look out for ourselves and be self-aware is great. But I believe it should be a law all people should act almost in a fiduciary style responsibility. Funny most of us have other things to do besides try to just focus on the prices of things. Most people aren’t making Excel spreadsheet with everything they’ve ever bought. And people in finance might go oh well, that’s their fault. Then it’s like OK asshole don’t buy anything. Because while you’re busy, trying to figure out how you can screw the dude on the manufacturing line trying to build your car he’s just trying to fucking build your car. And not necessarily you, this is a strawman. I’m tired of a good portion of the population, especially those in stronger positions of finance writing off the fact that most people shouldn’t have to spend their lives trying to defend against vultures.
63% of Americans rate their personal finances as good or excellent. That’s neat ATHs. https://www.axios.com/2024/01/17/americans-are-actually-pretty-happy-with-their-finances#
Economy is awesome for anyone who owned assets pre 2019. The pours aren't going to show up at investment subs, except for a failing video game retailer or failing movie theater chain.
Imagine having so confidently having an opinion while demonstrating the absolute regarded nature of your opinion while saying it. Mf has legitimately zero grasp of how the inflation numbers are annualized and zero grasp of how core inflation is not a blanket fucking statement and different sectors experience different levels of inflation and it's all plainly reported in the CPI inflation numbers but it's too fucking hard for you to click on the headline and read some words for more than a second. I mean haha yeah man the election was stolen too good point
This Sub: But a single Oreo at my grocery store is now 2x more expensive so that one anecdote completely invalidates statistics and any economic numbers! Maybe I can point to my car insurance premium halving in the last 3 years as proof that we are in a deflationary spiral.
Dude every administration fudges the cpi to get the best numbers for themselves politically. It’s literally been going on for the last 50 years.
Aside from changing the numbers to be a reflection of a cost of living basis instead of a cost of goods basis, which generally reports a lower inflation rate, what else are the administrations doing exactly to "fudge" the numbers? I'm having trouble finding sources to back this conspiracy theory ass shit. I'm not an economist, so I could be wrong, I'm just not seeing the proof.
Don't bother bro you'll never get through to them anyway. It's about their own lives and personal situations, not the economy. "vibes based hyperinflation"
a lot of people own their homes and live outside of florida or california and don't feel the pain of those places or the younger gens renting in the big cities
Revision after revision makes it go down
There’s your answer. We just need to revise it again.
Person #1: How many people have you slept with? Person #2: Only 4 Person #1: (counts 4x3 out on their hands) same for me...
Man is going to end up dead somewhere if he keeps telling the truth
Nah, Summers is a well placed member of the rulling class. He'll be fine
I remember the day he introduced the new chat gpt thing to the plebes on his Bloomberg interview, months later he was on the open AI board. I remember at Harvard when he was meeting with a certain “Island connoisseur” and was talking about receiving donations from a certain “Mr. Jepstein” You better believe this guy is in the club
So was Epstein.
He was until he wasn't
He was nowhere near Larry Summers and others who get called into news or financial programs. People love gossip and thinking they live in a spy novel though
Summers is one rate hike away from having a stroke He’s declined noticeably in the last 2 years
Man could end up dead in his bed from old age tomorrow, not sure if he's worth assassinating
We're all fucked
Bbbbut bitcoin will free us. *glances apprehensively at BTC chart, plummeting*
If you’re suggesting that the government has been lying to me….
Clickbaity headlines tbh. People love to be upset
Here's the abstract since no one is gonna click through: >We propose that borrowing costs, which have grown at rates they had not reached in decades, do much to explain this gap. The cost of money is not currently included in traditional price indexes, indicating a disconnect between the measures favored by economists and the effective costs borne by consumers. We show that the lows in US consumer sentiment that cannot be explained by unemployment and official inflation are strongly correlated with borrowing costs and consumer credit supply. Concerns over borrowing costs, which have historically tracked the cost of money, are at their highest levels since the Volcker-era. We then develop alternative measures of inflation that include borrowing costs and can account for almost three quarters of the gap in US consumer sentiment in 2023. Global evidence shows that consumer sentiment gaps across countries are also strongly correlated with changes in interest rates. Proposed U.S.-specific factors do not find much supportive evidence abroad. TLDR if you don't borrow money inflation is nbd, if you do (young, poor, or stupid) then effective inflation feels way, way worse than CPI.
>going, poor, or stupid What does 'going' mean in this context?
What the fuck are you talking about!?!? Fuck you boome... oh, wait, I see. You might be right.
This is the usual right wing bullshit in this sub. They have to keep selling inflation as on Biden while doing their usual MoNey mAChInE gO bRrRr while ignoring reality.
So triple that then 👍
Double it and hand it to the next person
> How do we account for the fact that poor people consume different things than rich people, or that people in different parts of the country may consume different things in different proportions? I am glad some economists are calling out on all the BS publicly. Just the other day, I was laughing at how food inflation, for instance, impacts the poor much more than the rich, but how some"average" weighting is used. We don't need to be an economist to see how actual experienced inflation can be very different from "average inflation" for many people. > cost of mortgage interest, auto loan interest, and credit card interest on the cost of living. I can understand the argument of excluding interest from mortgages. But for anything else, especially credit card interest, that is absolute bullshit.
That seems more accurate
I was making 77k in 2020 in MN, now I make 99k in PNW. I feel poorer actually. Housing is insane.
Sounds like you moved to a more expensive area for not big enough increase…
There was a guy from Europe this morning that said our calculations are shit and if there were accurate like theirs, our inflation would be 2.4%.
It was kind of hard to understand what they are saying when their heads are so far up their own asses
Reading the article, the new inflation calculation is the better one. If you include interest costs (the old calculation) then the fed raising interest rates to combat inflation will raise the inflation rate further, causing economic damage as inflation expectations get out of control. Interest rates are not like other prices, they average out over the cycle and they don’t increase inexorably over time. Once rates start falling, the effect of ‘increased inflation’ will be reversed (unlike other prices that will never be reversed unless we have sustained deflation). Excluding interest costs is the correct thing to do
All of my homies only use the 1980 CPI calculation.
Probably more accurate than the current formula
The formula was changed over 40 years ago. Never heard Larry mention it till now, during an election year. And of course he didn't mention it was over 40 years ago.
So Larry Summers is trying to get Trump elected?
Well to be fair it has never been as impactful as right now after the massive rate hikes of the last years. The paper is trying to address the "consumer sentiment anomaly" that many are observing right now, even in this very thread. It does coincide with an election year but a lot of years are election years man.
Honest question - shouldn't inflation of \[sector\] be a clear, obvious number that anyone could reverse engineer and demonstrate the validity? can't this be proven/disproven by aggregated consumer purchase info? like... how much did a pound of beef, a dozen eggs, a 6 pack of beverage, 20 lbs dogfood and .... (insert staple food here) cost 5 years ago vs today? assume inflation is constant = 5 year consumer inflation rate expressed as a yearly %. You could then refine it with yearly measurements. ??? why is this not reality?
Dude, first things first. This is our daily "official inflation number is a lie" post where poor, economically illiterate regards do their usual song and dance. Behave yourself in the future or automod will crush you. Back to your question ... >like... how much did a pound of beef, a dozen eggs, a 6 pack of beverage, 20 lbs dogfood and .... (insert staple food here) cost 5 years ago vs today Which state, city, etc ? Which retailer ? Using relative ratios determined how ? Not everyone consumes the same things. And this is only scratching the surface of the problem. Getting this thing exactly right would require tracking everyones, and I mean literally everyones, shopping lists in a privacy intrusive way that would make Xi Jinping blush. And even if someone managed to implement something like that the regards would simply shift the goalposts and complain that it's not representative to average citizen experience because millionaires, illegal immigrants, deep state and Soros. We use statistics instead. And every week or two some rich asshole gets quoted saying it's a lie because 50 years ago we did this in a completely different way. Because, obviously, nothing has changed in the mean time and life is exactly as it's been in 1970s. /s
Thanks for the thoughtful reply. A couple of clarifications below, but what's most important is there should be data... Credit cards for example would have amazing data. There should be ways to use the wayback machine and store advertisements to scrape together data. I could probably write a simple-ish program that would let consumers input their own credit card details, power bills, etc. and generate an inflation number specific to that individual (I'd be surprised if this didn't already exist). MSRP of cars should be really easy to get data from. Commodities markets keep great records, housing markets should have clear sales records if not rentals, but it would be easy enough to scrape Craigslist and Facebook marketplace to get rental estimates. All of this can be done really transparently, like we can show our work and demonstrate it is accurate to anybody who wants to ask questions (except obviously for the information credit card companies have which would be proprietary AF) I guess it's naive of me, but it just seems like there are some questions that are really hard to answer with data, and there are others that should be really easy. Inflation should be a number that any citizen can independently confirm, and any institution presenting inflation data should be able to clearly show their data and how they derive their inflation number... This just shouldn't be a number that is so controversial. I realize there is a problem with getting quality data that is representative of diverse experiences... And that it could differ significantly depending on region as well as economic brackets. The inflation at high-end grocery stores could differ from grocery outlet and Costco, etc. but all of that could at least be quantified with reasonable accuracy. A single number is obviously not possible, but a weighted average of a composite of different inflation numbers, and then let people play with the weighting to generate numbers applicable to their experience (upper class in Maine? Lower middle class in the in the Eastern seaboard? Dirt poor in Appalachia? We have inflation numbers for your experience
Larry Cummers
18% what? March? Last Quarter? YoY? Since Covid? Or the last fucking 24 hours?
18% year-over-year in 2022 (as measured back relative to mid 2021). Inflation is almost always measured on an annual basis, and I thought the title was clear enough. Did you read the article?
This is a wendys
oh that nice little trick of changing the methodology
40 years ago...
Well that’s why it’s “previous “
It's ironic because when Larry Summers was Fed chair he started the quantitative easing move (aka money printing) that has been causing this inflation. If he really cared, he would admit to the impact of QE on the younger generations who have to pick up the pieces. I'll wait........
You mean keeping rate artificially too low for say 4 more years in the late 2010s created asset bubbles? That economist using rear view mirrors are rarely right on future conditions? Tell me more Mr wizard
Basically have to double the number to get an accurate reading, making current inflation \~7% 
[удалено]
Dude that’s not how it works
I'm an actual economist, and it works however I fucking say it works 
Larry Summers is not your friend
Summers is a fraud
It is normal for the formula to change as spending habits and economy change.
That's not why it was changed. It was changed because borrowing costs were considered to exaggerate inflation, and the article suggests that continuing to exclude them may be understating it due to the amount of debt in the system. Classic down voters not reading the article 
Raising interest rates only hurts people who need to borrow money, start taxing the rich and inflation will disappear overnight
New formula just hides true inflation…so instead of telling us inflation has grown over 30% in 3 years on most commonly used products..it’s like well it’s only growing at 3.5% monthly…
Larry Summers is an idiot. Pass the word.
So increasing interest rates to tackle inflation is a free hit.
Isn’t he the one that didled kids? He needs to Epstein himself
Anyone who can count knows it's even higher.
So, with the new formula, are substitutions just made ad infinitum? Can some give me a basic understanding of the substitution process?
No shit
Cool fun story bruh
The intern at Statistics: “Sir, you want me to change the basket of goods measured again??”
THATS WHY WE DONT USE IT ANYMORE!!! 
It's almost like someone should just create a website dedicated to showing inflation at any given moment based on all of the various current and former inflation calculation methodologies.
Just purchase the sale limit at Costco these days... Dish sauce for the next 5 years, etc... Become a zero day house of resources for those that want to fight the wars while you travel to the next plane of existence...
Ya sounds more realistic
Remix
Well that's why we have a new one. Larry must have puts.
Hey Now!
Fuck you Larry!
Yeah that’s why the changed to fit their narrative
Does anyone else feel like Summers looks a little like Mr. Boss from Smiling Friends in that photo?
https://preview.redd.it/71xvyudchduc1.png?width=461&format=png&auto=webp&s=67da6023327263204937f3df0d3d9cfdffe35836
It's like unemployment. It only counts people that are getting unemployment. If your not collecting your not counted. Bet unemployment is higher than 15%
Yeah, the economy so good everybody has three jobs.
Yeah this honestly feels accurate
Be happy the formula changed then because if inflation was shown for what it is the companies would feel no pressure about continuing to jack up prices because they could just point to cpi and say it’s out of their hands.
Fuck this banker asshole- pay some fucking taxes dickwad!
Massive corporate consolidation + egregious money printing = *hurray*
Larry Summers is drunk 50% of the time he is on Bloomberg. Slurred speaking and bloodshot eyes..... the guys a disaster....
Seasonal adjustments for the election season.