Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Latest Inflation Numbers and Discussion
Old 01-01-2024, 01:29 PM   #1
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 23,028
Latest Inflation Numbers and Discussion

As one of our larger threads, a new year means time for a new start for this topic.

Here is the link to the old version. https://www.early-retirement.org/for...on-114292.html
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-01-2024, 02:51 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Dec 2016
Posts: 1,328
Not sure inflation is really much of a "topic" anymore
__________________
Retired 1/6/2017 at 50 years old
Immensely grateful


“The most important quality for an investor is temperament, not intellect.”—Warren Buffett
FREE866 is online now   Reply With Quote
Old 01-01-2024, 02:52 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,121
Sure it is. In fact it’s always relevant, even when it’s low or negative.

Fed has gotten close to target, but is it sustainable? Inquiring minds want to know!
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 01-01-2024, 02:55 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Dec 2016
Posts: 1,328
Quote:
Originally Posted by audreyh1 View Post
Sure it is. In fact it’s always relevant, even when it’s low or negative.

Fed has gotten close to target, but is it sustainable? Inquiring minds want to know!

Does anyone here really change their spending habits based on inflation?


I know I don't and I'm probably much less well off than most of the posters on here
__________________
Retired 1/6/2017 at 50 years old
Immensely grateful


“The most important quality for an investor is temperament, not intellect.”—Warren Buffett
FREE866 is online now   Reply With Quote
Old 01-01-2024, 03:00 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,121
That doesn’t matter. I’m sure some do. Inflation also affects interest rates and many of us pay attention to what the Fed does and what interest paying assets do.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 01-01-2024, 11:15 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 17,062
Inflation has made me realize I have to be aware of how hard is my money "working". Now because interest rates are high, having $20K sit around earning low interest means missing out on perhaps an extra $500.

Also I used to pre-pay some bills, one year I left ~$16K with the IRS instead of asking for a refund on the tax return. It really didn't matter when interest rates were 0% or maybe 1/2 a percent, but now doing that would mean missing out on earning $800
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Old 01-01-2024, 11:23 PM   #7
Thinks s/he gets paid by the post
 
Join Date: May 2019
Posts: 2,787
Quote:
Originally Posted by FREE866 View Post
Not sure inflation is really much of a "topic" anymore
LOL. Huge topic.

Quote:
Originally Posted by FREE866 View Post
Does anyone here really change their spending habits based on inflation?
Absolutely. It sure has, and it also has really reduced what I can get with my money in retirement.

For years prior to the pandemic, I was seriously thinking about relocating. Inflation has really killed that dream, and it keeps getting worse. Just got my latest car insurance bill, and it's up over 20% on the year, with no changes in coverage, not accidents/tickets, or anything. Also, I just got my new insurance premium for 2024, and it's up 33% on COBRA from 2023, but current employees on the plan are saying theirs went up 41%! Inflation hasn't really gone anywhere.
GenXguy is offline   Reply With Quote
Old 01-01-2024, 11:33 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 3,077
Quote:
Originally Posted by GenXguy View Post
Also, I just got my new insurance premium for 2024, and it's up 33% on COBRA from 2023, but current employees on the plan are saying theirs went up 41%! Inflation hasn't really gone anywhere.
COBRA is always super expensive. I think you will save a lot with the ACA and subsidies.
jim584672 is offline   Reply With Quote
Old 01-02-2024, 08:44 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,231
I certainly changed my spending habits because of inflation.

I’d be a fool not to do so. I think the economists call it “substitution”.
__________________
Comparison is the thief of joy

The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 01-02-2024, 08:59 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Dec 2016
Posts: 1,328
Quote:
Originally Posted by Chuckanut View Post
I certainly changed my spending habits because of inflation.

I’d be a fool not to do so. I think the economists call it “substitution”.
Well, you are not the norm in this regard.
if you look at actual data consumer spending remained very strong in last couple of years despite inflationary numbers.

But don’t take my word for it
See here:

https://awealthofcommonsense.com/202...flation-works/
FREE866 is online now   Reply With Quote
Old 01-02-2024, 10:04 AM   #11
Thinks s/he gets paid by the post
 
Join Date: Aug 2014
Location: Red Rock Country
Posts: 1,927
DH's health insurance at work has barely budged from last year. My medicare premiums have gone up except for Part D costs which have declined slightly. Gas and food prices are down too.

This recent bout of inflation has been nothing like that we experienced in the late 70's early 80's. We've gone through a once-a-century pandemic event and there's a costly war going on in Europe, which, if we're not careful, will spread, forcing us to put boots on the ground. There are many other issues the country is having to deal with. Yet, inflation has moderated far faster than it did in the 80's and still no sign of the bad recession that most everyone was predicting for last year!

So I'm in the camp that believes that inflation, for now, is not that big a deal. I'm also convinced that the inflation we experienced recently was exacerbated by corporate profiteering - something that maybe should be on the agenda going forward.
Ian S is offline   Reply With Quote
Old 01-02-2024, 10:16 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2016
Location: Northern Virginia
Posts: 7,579
Well I look forward to some new actual data to evaluate and discuss. You know, PMI, ADP employment, weekly unemployment claims, continuing claims, nonfarm PR all that good stuff.

And it is all coming this week.
Montecfo is offline   Reply With Quote
Old 01-02-2024, 10:21 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2012
Location: Seattle
Posts: 6,021
Quote:
Originally Posted by Sunset View Post
Inflation has made me realize I have to be aware of how hard is my money "working". Now because interest rates are high, having $20K sit around earning low interest means missing out on perhaps an extra $500.

Also I used to pre-pay some bills, one year I left ~$16K with the IRS instead of asking for a refund on the tax return. It really didn't matter when interest rates were 0% or maybe 1/2 a percent, but now doing that would mean missing out on earning $800
Same thing here. I used to leave $30k, $40k parked in the bank for a few weeks when I was planning on a big purchase for our house build. Now I start thinking about $40k x 0.05 x (1/12) = $166 that I am just lighting on fire by doing that.
Fermion is offline   Reply With Quote
Old 01-02-2024, 07:33 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Aug 2007
Posts: 2,865
Quote:
Originally Posted by Fermion View Post
Same thing here. I used to leave $30k, $40k parked in the bank for a few weeks when I was planning on a big purchase for our house build. Now I start thinking about $40k x 0.05 x (1/12) = $166 that I am just lighting on fire by doing that.
One of the reasons I use Fidelity for cash management. I use a brokerage account and it sweeps to a MM fund yielding ~5%. No need to deal with banks.
__________________
Eat, Drink and Be Merry.
tulak is offline   Reply With Quote
Old 01-02-2024, 07:36 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
JoeWras's Avatar
 
Join Date: Sep 2012
Posts: 11,702
Well I guess one "good" thing from last year's Fed excitement was my income for last year. I totally underestimated how much interest I'd make last year, what with me fiddling around with all the Tbills and Tnotes over the last 2 years.
__________________
Retired Class of 2018


JoeWras is offline   Reply With Quote
Old 01-02-2024, 08:31 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,231
Quote:
Originally Posted by FREE866 View Post
Well, you are not the norm in this regard.
if you look at actual data consumer spending remained very strong in last couple of years despite inflationary numbers.
Thank you for telling me that.
__________________
Comparison is the thief of joy

The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Old 01-03-2024, 08:52 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 17,062
Quote:
Originally Posted by FREE866 View Post
Well, you are not the norm in this regard.
if you look at actual data consumer spending remained very strong in last couple of years despite inflationary numbers.

But don’t take my word for it
See here:

https://awealthofcommonsense.com/202...flation-works/
Spending is up because the same stuff costs more, so I expect spending to be up by 20% on average compared to a few years ago. To me that's not progress/good.

Also, lets not forget the free money that was sent out, and people working from home (saving commute costs) all gave folks some extra dollars to not care so much about inflation.
Combine that with the cooped up feeling of Covid, and a lot of cruise ships did fill up, due to pent up demand. I think that pent up demand is waning, as we went on a cruise that was 1/2 the price normally charged (not fake sales price), as within the last 3 weeks they needed to add more people.

But now that the free money is spent, we may see a reduction in what is bought, because folks spend all their money on other things and run out.

Naturally, people with large savings (retired) will continue to spend and just pay more.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Old 01-03-2024, 09:47 AM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 7,881
Quote:
Originally Posted by FREE866 View Post
Well, you are not the norm in this regard.
if you look at actual data consumer spending remained very strong in last couple of years despite inflationary numbers.

But don’t take my word for it
See here:

https://awealthofcommonsense.com/202...flation-works/
Substituting is actually entirely typical and normal. It's also rational whether inflation is high or low.

If the price of beef goes up, people switch to chicken. But inflation is the rise in the general price level, so it's possible that beef and chicken both go up.

I think consumer spending is typically expressed in nominal terms. So if "holiday shopping" is up 5% over last year but inflation is also up 5%, then we just bought the same amount of stuff and it just cost more.

I also tend to think that most average consumers try to maintain their lifestyle for longer than they should in the face of changing economic conditions. If, and there is an if, we have deterioration, then people will borrow for a while, and some of them will default or go bankrupt. It's possible we'll skate through unscathed, and I hope for that but I don't entirely expect it.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 01-03-2024, 09:58 AM   #19
Thinks s/he gets paid by the post
 
Join Date: Dec 2016
Posts: 1,328
Quote:
Originally Posted by Sunset View Post

Naturally, people with large savings (retired) will continue to spend and just pay more.

Which was my original point in this thread. And that in the aggregate consumer spending has been robust in spite of inflation. So sure, people think about inflation , but their actions , on the whole, have been unaffected. The article I referenced breaks down the data pretty well.
__________________
Retired 1/6/2017 at 50 years old
Immensely grateful


“The most important quality for an investor is temperament, not intellect.”—Warren Buffett
FREE866 is online now   Reply With Quote
Old 01-03-2024, 10:22 AM   #20
Thinks s/he gets paid by the post
 
Join Date: May 2019
Posts: 2,787
Quote:
Originally Posted by Sunset View Post
Spending is up because the same stuff costs more, so I expect spending to be up by 20% on average compared to a few years ago. To me that's not progress/good.
^^^^^ Yes exactly! Spending is up because everything costs more, not because the consumer is robust or actually purchasing more products.

Please are spending more just to get by and in many cases, getting by with less.
GenXguy is offline   Reply With Quote
Reply

« oil and gas | - »

Currently Active Users Viewing This Thread: 4 (3 members and 1 guests)
MikeArgh, misanman, ransil
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Latest Inflation Numbers and Discussion aja8888 Active Investing, Market Strategies & Alternative Assets 2988 12-25-2023 02:58 PM

» Quick Links

 
All times are GMT -6. The time now is 05:59 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.