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It seems like this inflation is not broad-based: “In the quarter to August used cars, hotel rooms and airfares made up less than 5% of America’s consumer-price

• luciusdomitius 5y ago
  This is nice talk, but have you really not bought groceries, electronics, filled up your tank or paid an electrcity/natgas bill in the past 6 months?
  • minitoar 5y ago
    I’m not sure that’s a compelling counter argument. Those are simply other supply chains also experiencing bull whips.
    • colordrops 5y ago
      What non-supply chain expenses would need to inflate to qualify this as broad-based inflation then?
      • missedthecue 5y ago
        Seems like the narrative is that inflation isn't happening, and it if is happening, it's transitory, and if it's not transitory, it's irrelevant
        • gruez 5y ago
          >and if it's not transitory, it's irrelevant who's claiming that?
    • luciusdomitius 5y ago
      Well, I believe it is. The original argument was that it is a very large price increase of small number of not that widely consumed goods causing the numbers to look that bad. Housing, transportation, energy and food are the majority of expenditure for most people, which is in a direct contradiction of what OP claims.
    • zdragnar 5y ago
      I don't think the cost of propane nearly doubling is bull whip, not out here. Therr are going to be a lot of people wearing extra layers and looking at getting wood stoves out here this winter.
  • quickthrowman 5y ago
    I make the median US household income and I don’t even think about the prices of any of those things, I’m more worried about housing prices, not being a homeowner.
  • notabee 5y ago
    The shrinkflation on grocery items has been extremely obvious for a while as well.
  • yostrovs 5y ago
    It is a good point. Inflation can be argued as an effect that impacts different people differently. If you're a vegetarian, rising beef prices do not affect you. So using an inflation indicator such as produced by the Fed and other organizations is not accurate for you as a person. I do indeed see inflation and it seems much more than the 5 to 8 percent that is published by the various inflation gauges. I'm not an average person and there really isn't an average person out there and we get impacted in different ways.
    • tarsinge 5y ago
      Also the issue with aggregates indicators is that some expenses can be more easily adapted than others: it’s easier to buy a less powerful smartphone/TV/GPU than to heat or eat less.
    • lotsofpulp 5y ago
      Food prices does not mean much when houses go for a few hundred thousand more within a couple years, or daycare prices increase from $15k/year to $16k to $17k or health insurance deductibles go from $3k to $5k to $7k. For a young family that is interested in buying a house, food/gas does not even register.
  • aisengard 5y ago
    These aren't prices we haven't seen before. Electronics, sure, but there's a pretty good non-general-inflationary explanation for that. This (still) ain't the 70s.
  • adam_arthur 5y ago
    It tends to be the well off people who dismiss inflationary pressures. I certainly don't look at my heating bill every month. But inflation is devastating to the working poor. Funny that it's so easily brushed aside by those who claim to advocate for them. Consumer perception of the economy is roughly equivalent to 2009 numbers now, in a recent study. The public by and large thinks the economy is terrible, primarily due to the inflationary pressures. Consider that unemployment affects the marginal job seeker, but inflation affects everybody. From a purely political lens, vying for higher employment at the expense of inflation, once past a reasonable threshold, seems like a losing move.
    • zzleeper 5y ago
      If inflation is supply-side (e.g. oil runs out, a ship gets stuck in Suez, etc) then workers lose. If it's demand-side, then their wages should rise up together with inflation so they don't win or lose (except for whatever savings they have and whatever time it takes for wages to adjust).
      • adam_arthur 5y ago
        Wage numbers come out with the monthly jobs report. Only one month this year did wages rise higher than inflation, IIRC. So wages are rising, but slower than inflation, e.g. people getting poorer. And of course, many stay in the same job and don't get a raise, or get a paltry raise. Many seniors living off of fixed income investments which are yielding lower than ever. And so on... Workers are only better off if wage is strongly above inflation. I do see people cheering on wage gains, even though they've been persistently below inflation, which is a bit of a headscratcher. It seems the public perception is finally starting to bubble up though, rather than the headline narratives. https://www.nytimes.com/2021/11/06/upshot/inflation-psychology-economy.html https://www.nytimes.com/2021/11/06/upshot/inflation-psycholo...
        • rrrrrrrrrrrryan 5y ago
          Poor people often have a negative net worth. If both inflation and wages are rising, it makes their debts easier to pay off. I'm not arguing that inflation is good for poor people, just that "Inflation = Bad" is reductionist. There are winners and losers with inflation, and the lives of most individuals are affected in nuanced ways, both positively and negatively.
  • xapata 5y ago
    I have. I haven't noticed a change.
    • luciusdomitius 5y ago
      And where do you live if I might ask? Even Iran and Russia are experiencing galloping inflation. North Korea maybe?
      • bichiliad 5y ago
        Same, and New York. Anecdotal evidence doesn't really amount to much though, since prices fluctuate wildly from place to place (i.e. Pittsburgh is cheaper than New York, regardless of the inflation index).
      • Leherenn 5y ago
        Switzerland has had very limited inflation so far, I think the annual inflation is expected to be around 1.5% for 2021. Though to be fair, Switzerland has had about 0% inflation on average since 2015, with a few years of deflation in that interval, so it's still quite a big increase.
      • xapata 5y ago
        USA. I've noticed a few restaurants bumping prices up a buck, but most haven't changed yet. By galloping inflation, I hope that means wage increases. Inflation is neither bad nor good, until it changes people's behavior. Even then, it's not strictly bad until it spirals out of control. Until then, inflation is in many ways a good thing: higher wages, higher revenues, transferring money from creditors to debtors. These are things many people want more of.
  • taylodl 5y ago
    Past 6 months? What are you talking about? It's been the past 30 months - ever since Trump declared a trade war with China and then the pandemic hit. My grocery bills and the price of everything else have been rising noticeably ever since. The problem we're experiencing now is demand is surging and the supply chain hasn't recovered from the pandemic. High demand/low supply is a nice problem to have if you're a policymaker. That's why the policymakers aren't too worried about inflation.
  • giantg2 5y ago
    Electric generation charge has basically doubled for me (.045 to .085). Beef prices are about 50% higher, chicken at least 10%, pork about 15%. Etc. I also know people buying cars at or close to MSRP that would have gotten them for much less before. So the sticker prices might be the same, but actual prices paid are going up.
  • hckrnrd 5y ago
    As papi used to say, “follow the money.” If you’re a retailer, why not raise prices and blame inflation? I’m not saying increased labor costs and higher costs for raw materials don’t play into the equation, but if I can charge $7 for a gallon of milk instead of $6.50 and pocket the extra $0.50, seems like a good deal to me!
• strict9 5y ago
  This is a great point. But a counterpoint is that housing is not included in consumer price index. Real estate prices have rocketed to outer space for the past year and housing constitutes the biggest monthly expense for most people. Not predicting disaster, but what's going on is very unusual and no one can predict how or when it will shake out.
  • donkeyd 5y ago
    > Real estate prices have rocketed to outer space for the past year In the Netherlands it's about 20% YoY. And this is starting to become true all throughout the country even though it started in urban areas. I really feel bad for people who aren't homeowners yet, because becoming one right now is getting damn near impossible.
    • kipchak 5y ago
      I fall into that category, and am still mildly hopeful there might be one or two more chances to hop on board. My rent increased by close to 20% this year (US, FL) to the point where paying my old rent with a $250 month to month penalty is actually cheaper. I think this is part of the rampant speculation on crypto and the like - $1,000 isn't really going to do me that much good, but if I hit a 100x I could be a homeowner.
      • lotsofpulp 5y ago
        > My rent increased by close to 20% this year (US, FL) to the point where paying my old rent with a $250 month to month penalty is actually cheaper. I have never heard of this type of rental agreement. Your contract says you can stay indefinitely if you pay $250 per month extra over the expired contract’s rent?
        • kipchak 5y ago
          The lease automatically converted to a month to month after the one year term ended. This thread seems to cover a similar scenario.[1] I suppose the downside is they could give me the boot with 30 days notice. FWIW I've contacted them several times to try and just sign a lease but the property has been bought out and had it's management office staff swapped out a few times so the whole thing is a mess. [1]https://www.city-data.com/forum/renting/1261828-fixed-term-lease-converted-month-month.html https://www.city-data.com/forum/renting/1261828-fixed-term-l...
• 01100011 5y ago
  I don't know, but I think if you want to see where inflation is headed you should look at labor costs. Unless we see a corresponding increase in productivity(maybe from automation), I think prices will have to rise to compensate. Lots of things can transiently spike in price, like energy or raw materials, and you can eat those increases by taking less profits if you don't have the pricing power, but once labor costs go up it seems you are stuck with them. If those labor costs drive the price of goods and services beyond some psychological tipping point, you then have more demands for higher wages, at least until those start to get rejected and we find a new zone of relative pricing stability. I'm not arguing for hyperinflation or anything, but I don't think we'll see the price increases of the last year go away. If you're like me and had your assets in cash, well, a good percentage of that buying power is gone and not coming back.
• roody15 5y ago
  Food prices are up. https://finance.yahoo.com/news/consumer-price-index-shows-food-144607233.html https://finance.yahoo.com/news/consumer-price-index-shows-fo...
• ChrisLomont 5y ago
  This article points out the CPI increased, not simply some rare items. This increase reflects exactly the basket of goods people buy.
• jcoq 5y ago
  One thing I've seen repeated is that increased shelter costs are problematic if rents rise (on locked in leases) because wage expectations would rise in response.
• deleted 5y ago
  [deleted]
  • whydoibother 5y ago
    Ah yes mr crypto says hyperinflation is coming. I believe that.
• angelzen 5y ago
  Housing sticks out like a sore thumb. 2% increase? Over what period? Case Schiller is double since the last dip (circa 2012), and a solid 45% up since the peak of the 2008 bubble. It has a sharp uptick in the past couple of years, sharper than the 2006 run up. Sure, 2% housing inflation, nothing to see here. https://fred.stlouisfed.org/series/CSUSHPINSA https://fred.stlouisfed.org/series/CSUSHPINSA
  • dragonwriter 5y ago
    > Case Schiller ...measures home ownership (asset) prices, CPI housing measures housing consumption (rent or imputed rent) prices.
• epistasis 5y ago
  Agreed, so far this looks like it's a bull-whip effect in many many supply chains. For example, lumber is still priced fairly high, but far far down from its peak level. And if this podcast is to be believed (and I think it is), mere lack of metal trusses for home building is holding back a lot of builders from continuing with their projects, meaning a ton of lumber is being held in places that it's not usually held, which will lead to further bull whip price swings: https://www.bloomberg.com/news/articles/2021-11-08/stinson-dean-on-the-lumber-crash-that-followed-the-boom https://www.bloomberg.com/news/articles/2021-11-08/stinson-d...
  • lumost 5y ago
    Counter point: Inflation due to large monetary stimulus may appear through a bullwhip affect as demand eventually stresses fixed-capacity capital intensive industries. Once these industries are strained higher costs may radiate outwards.
    • dls2016 5y ago
      Isn’t this what we’re seeing? Semiconductors strained leading to rising auto prices? (For example.) What evidence is there that it will radiate outwards at a rate significantly above the Fed’s target for an extended period of time?
      • 01100011 5y ago
        Evidence? This is economics we're talking about. I think we can make some guesses, but the system is too complex to make reliable predictions. A single advancement in worker automation could easily provide enough productivity gains to offset wage growth. A single plant disease or new political treaty could massively effect food and or energy costs. The system is chaotic.
      • lumost 5y ago
        I don't know of a good measure for how long it takes price signals to be transmitted across the economy - particularly not inflationary price signals. I'd be willing to bet that the speed at which supply reacts to changing price signals depends highly on the current expectations for how long price changes will persist and how much of the price change is inflationary. Offhand however, the top capital constrained industries that I can think of (in rough order) include. 1. Semi 2. Housing 3. Automotive/heavy manufacturing 4. Energy Which are all experiencing shortages/rapid price increases. If the hypothesis holds we would see price increases in other fields which depend on the above. If the supply disruption/demand disruption hypothesis holds then we should see a normalization of prices in the above industries.
• mc32 5y ago
  I don't know, last year my oil change was around forty bucks, this year it's been closer to a hundred. I think we're just seeing the tip of the spear and the shaft is going to show up pretty soon, though I hope you are right and we don't get the shaft.
  • hourislate 5y ago
    That's just it, the guy on the skateboard who pays a buck more a day for his Chipotle and SBUX isn't going to notice shit. The guy who feeds his family of 4 (vehicle, cloths, energy, taxes, life) is feeling it.
  • alphabettsy 5y ago
    How is your oil change more expensive? Oil itself doesn't seem to be more expensive so is it the labor in your case?
    • mc32 5y ago
      I’m not an operator. All I am is a run of the mill automobile owner who needs the car serviced. The prices have gone up why the shops upped the price is not something I’m privvy to. On the other hand fuel prices are up considerably too.
      • alphabettsy 5y ago
        I'm just curious because oil changes do not appear to be more expensive because of supplies. Oil and oil filters cost the same as they did before. Is it possible you just got ripped off?
        • mc32 5y ago
          That's the price for full synthetic 6 qts. If you like search Groupon for their non-discount prices. Sometimes you can get a 40% discount at the shop near you, but not always. I don't always have the time to drive to the place with a discount.
• adam_arthur 5y ago
  Public market rent data shows rents up ~17% YTD, while CPI shows ~3%. https://www.apartmentlist.com/research/national-rent-data https://www.apartmentlist.com/research/national-rent-data There's a huge lag to reflect certain data in the headline numbers. Owners equivalent rent measurement technique, only sampling 1/6 of housing stock per month and so on lead to about a 12 month lag in cpi. Rents alone will fuel high baseline inflation for at least a year or two, once the value starts getting priced in. You are right that we'll likely see some decline from cars normalizing, but not enough to offset rents and more broad based pressures. Baseline inflation will likely remain well above the Feds 2% target
  • rory 5y ago
    Average market rent represents a segment of rent prices that responds much more quickly to market price shocks than rent prices as a whole. Your link is effectively the price change for people moving into a new apartment. The other 50-60% of the market (people renewing their lease or continuing tenancy at will) has much smoother price growth over time. Doesn't square 17% and 3%, but it could definitely mean the lagging CPI rent growth we see over the coming year is more like 9 or 10%.
    • adam_arthur 5y ago
      The market rate forecasts the rent increases for the broader market. If market rate of new units is 20% higher, almost by definition you'll see 20% higher rents for all in the long run. Why should we use backward looking methodology in computing the CPI? It's an extremely flawed way to analyze the state of the market. Forward looking metrics are more useful to policy makers. The methodology for OER and rent analysis in the CPI acts to suppress true price increases. Though those price increases eventually materialize as people renew their leases, move etc. It comes with a year or longer lag though. The Fed drives their policy based on this data. Why should the data have a one year lag and potentially put them behind the curve? If we used the same CPI formula as in the 70s, we would be seeing similar CPI numbers too.
      • rory 5y ago
• rattlesnakedave 5y ago
  >If we’re having inflation due to a tiny number of goods having large price spikes I take issue with this. Hotel rooms and airfare can often be forgone for the average American. New (or used) cars to a lesser extent. However we are seeing increases in prices of ag commodities increasing dramatically. On a year-on-year basis, prices were up 32.8% in September[1]. Oil prices are at a three year high[2]. Not to mention soaring housing costs. It may indeed be to early to predict disaster, but things are not as good as your comment seems to suggest. [1] https://www.reuters.com/business/world-food-prices-hit-10-year-peak-fao-2021-10-07/ https://www.reuters.com/business/world-food-prices-hit-10-ye... [2] https://www.reuters.com/business/energy/oil-prices-rise-tight-supply-set-weekly-gain-more-than-2-2021-10-15/ https://www.reuters.com/business/energy/oil-prices-rise-tigh...
  • quickthrowman 5y ago
    Food costs more because freight costs went up.
• comeonseriously 5y ago
  Groceries and gas are up. This is devastating for those who think $50 left over at the end of the month is a good month.
  • tarsinge 5y ago
    But fortunately they can buy smartphones with better specs than before for the same price so they’ll be good /s
  • epistasis 5y ago
    I would think that increase in rent, which are typically far higher percentages of income, would have a far bigger effect.
• belter 5y ago
  All items seem to be contributing to it. Exception are Medical Services. Probably because this latest item is already so expensive anyway... https://www.bls.gov/news.release/cpi.nr0.htm https://www.bls.gov/news.release/cpi.nr0.htm