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So what does their data say about the cost of a house in 2019 vs today? The cost of a vehicle in 2019 vs today? it could just be the BLS not fully capturing inf

So what does their data say about the cost of a house in 2019 vs today? The cost of a vehicle in 2019 vs today? it could just be the BLS not fully capturing inflation

gruez 3y ago
The CPI is composed of a basket of goods, and there's always going to be items in that basket that's rising higher than average, so there's always going to be things you can cherry pick and complain about "the BLS not fully capturing inflation". >The cost of a vehicle in 2019 vs today BLS data says it's 30% higher. Does that seem about right? https://fred.stlouisfed.org/series/CUSR0000SETA https://fred.stlouisfed.org/series/CUSR0000SETA >cost of a house in 2019 vs today Houses aren't directly in the CPI for complicated reasons, but the short version is that they're an investment. Americans buy 401ks too, but it would make little sense to factor in the S&P 500 into the CPI. Housing is factored in though, through imputed rents and rental prices.
- Terr_ 3y ago
  Health Insurance is another fun/annoying one, because it's not like you can reliably standardize 1 standard unit of insurance and it's difficult to compare across plans. (Perhaps by design, the Confusopoly at work.) That said, BLS is starting to tweak how they measure health care costs. [0] [0] https://www.bls.gov/cpi/additional-resources/improvements-cpi-health-insurance-index.htm https://www.bls.gov/cpi/additional-resources/improvements-cp...
  - jdlshore 3y ago
    My understanding, as someone who bought health insurance on the healthcare.gov marketplace, is that the ACA did in fact standardize health insurance into “bronze,” “silver,” and “gold” tiers. The tiers are defined by actuarial math that I don’t recall at the moment.
- boring_twenties 3y ago
  > and there's always going to be items in that basket that's rising higher than average This argument is so weak. Housing is unlike those other items in that it's both by far most households' largest expense, and difficult or impossible to substitute a cheaper version: you can move to a cheap area, but there are no decent-paying jobs there, leaving you in the same or worse boat. And there are precious few cheaper areas left: even Vegas, long known for low cost of living, is approaching $500k for a just-ok home. At today's interest rates, that's like $3300-4100 per month all-in. Almost no one can reasonably afford that; even software development jobs barely crack $100k here.
  - gruez 3y ago
    >This argument is so weak. Housing is unlike those other items in that it's both by far most households' largest expense that's reflected in the CPI basket construction. "Rent of shelter" which includes rent and OER makes up 34.8% of the CPI basket. > and difficult or impossible to substitute a cheaper version: you can move to a cheap area, but there are no decent-paying jobs there, leaving you in the same or worse boat. that's also factored in because they sample prices according to where people actually are. They're not taking prices across 50 states and doing a simple average.
    - boring_twenties 3y ago
      OER also does not capture the cost of buying a house today, but of renting an already owned home. Rents do not seem to have gone up nearly as much as prices + interest rates.

So what does their data say about the cost of a house in 2019 vs today? The cost of a vehicle in 2019 vs today? it could just be the BLS not fully capturing inflation

gruez 3y ago

The CPI is composed of a basket of goods, and there's always going to be items in that basket that's rising higher than average, so there's always going to be things you can cherry pick and complain about "the BLS not fully capturing inflation". >The cost of a vehicle in 2019 vs today BLS data says it's 30% higher. Does that seem about right? https://fred.stlouisfed.org/series/CUSR0000SETA https://fred.stlouisfed.org/series/CUSR0000SETA >cost of a house in 2019 vs today Houses aren't directly in the CPI for complicated reasons, but the short version is that they're an investment. Americans buy 401ks too, but it would make little sense to factor in the S&P 500 into the CPI. Housing is factored in though, through imputed rents and rental prices.

Terr_ 3y ago
Health Insurance is another fun/annoying one, because it's not like you can reliably standardize 1 standard unit of insurance and it's difficult to compare across plans. (Perhaps by design, the Confusopoly at work.) That said, BLS is starting to tweak how they measure health care costs. [0] [0] https://www.bls.gov/cpi/additional-resources/improvements-cpi-health-insurance-index.htm https://www.bls.gov/cpi/additional-resources/improvements-cp...
- jdlshore 3y ago
  My understanding, as someone who bought health insurance on the healthcare.gov marketplace, is that the ACA did in fact standardize health insurance into “bronze,” “silver,” and “gold” tiers. The tiers are defined by actuarial math that I don’t recall at the moment.
boring_twenties 3y ago
> and there's always going to be items in that basket that's rising higher than average This argument is so weak. Housing is unlike those other items in that it's both by far most households' largest expense, and difficult or impossible to substitute a cheaper version: you can move to a cheap area, but there are no decent-paying jobs there, leaving you in the same or worse boat. And there are precious few cheaper areas left: even Vegas, long known for low cost of living, is approaching $500k for a just-ok home. At today's interest rates, that's like $3300-4100 per month all-in. Almost no one can reasonably afford that; even software development jobs barely crack $100k here.
- gruez 3y ago
  >This argument is so weak. Housing is unlike those other items in that it's both by far most households' largest expense that's reflected in the CPI basket construction. "Rent of shelter" which includes rent and OER makes up 34.8% of the CPI basket. > and difficult or impossible to substitute a cheaper version: you can move to a cheap area, but there are no decent-paying jobs there, leaving you in the same or worse boat. that's also factored in because they sample prices according to where people actually are. They're not taking prices across 50 states and doing a simple average.
  - boring_twenties 3y ago
    OER also does not capture the cost of buying a house today, but of renting an already owned home. Rents do not seem to have gone up nearly as much as prices + interest rates.