Latest Inflation Numbers and Discussion

[NW-Bound]

^^^ We are lucky to have all major stores within 3 miles of our home: Walmart, Costco, Lowes, Home Depot, Safeway, Fry's, Basha's.

There used to be an Albersons nearby, but it closed. There are now 10 Aldis in town, but the nearest one is 8 miles away.

My wife recently said she wanted to go to Aldi. I normally drive her, figuring that her grocery shopping is better than other wives shopping for clothes and apparels.

 

[pb4uski]

Well, there must have been a lot of "borrowing" during the pandemic when $5 Trillion dollars floated in from helicopters. And if most were loans, they were forgiven.

From Bard:

The total cost of federal COVID relief is about $4.6 trillion. This is a significant sum of money, but it is important to remember that the pandemic has had a major economic impact on the United States. The COVID relief programs have helped to prevent a deeper recession and to provide financial assistance to those who need it most.

Here are the top 10 recipients of federal COVID relief funds and how much they received:

• State and local governments: $450 billion
• Individuals and families: $931 billion
• Small businesses: $868 billion
• Health care providers: $178 billion
• Education: $122 billion
• Unemployment benefits: $115 billion
• Restaurants and bars: $81 billion
• Airlines: $78 billion
• Nonprofit organizations: $68 billion
• Housing: $63 billion

ETA:

The expected collection amount for the $868 billion of COVID-19 loans to businesses is $694.4 billion. This is according to the Small Business Administration (SBA), which estimates that 80% of the loans will be repaid. The SBA has already collected about $200 billion of the loans.

 

[MichaelB]

But you are right that excessive money supply can cause inflation.

It can, but there should be little doubt that our past 2 years of above trend inflation were the outcome of a jump in federal fiscal transfers.

 

[11522914]

I suppose one could drive to all the stores, spend hours doing shopping, but I like to get in and get out. I also want to limit my time around other people and would hate hitting 3 or 4 stores just to capture $10 in sale saving.

Many years ago I would shop at several stores to stock up on the sale prices. I don't mind grocery shopping at all.

I've now become much more efficient. Generally I buy the B1G1 free at Publix and do the full shop at Aldi.

The difference in price at Aldi compared to Publix is crazy. Many times I can get a comparable item at Aldi cheaper than the 1/2 price at Publix. So I only get items at Publix if it is cheaper than Aldi or Aldi doesn't carry the item I'm looking for.

 

[Fermion]

We don't have an Aldi anywhere close but I keep hearing about their amazing prices. Considering I was under the assumption that most of the margins in supermarkets were 10% or lower, how does Aldi manage to beat everyone else by so much?

 

[harley]

Do people even buy food items that are not on sale?

I do not eat ice cream or sweets for fear of diabetes, but just checked and saw Blue Bell ice cream for $7 for 1/2 gallon. It's not Haagen-Dazs, but is it good enough? How about Ben & Jerry for $2.97/pint?

I don't know where you live, but here in the OC MD area Ben and Jerry's is $6.99/pint. It sometimes goes on sale at $4.99/pint. And I haven't seen bacon for less than $5.99/lb in a long time. I don't think we're considered a HCOL area, more likely MCOL.

As far as buying food items that are not on sale, yes. Everybody (except you, I guess) does. We buy what we can when it's on sale, but a lot of stuff doesn't go on sale, or can't be kept long enough to justify stocking up when it does go on sale. I am thinking of getting a chest freezer for meats and such, which would help.

 

[pb4uski]

It can, but there should be little doubt that our past 2 years of above trend inflation were the outcome of a jump in federal fiscal transfers.

From Bard:

A study by the Federal Reserve Bank of San Francisco found that the fiscal transfers could have accounted for about 2.5 percentage points of the increase in inflation in the United States. However, the study also found that other factors, such as supply chain disruptions and rising energy prices, played a larger role in driving up inflation.

Overall, the evidence suggests that the fiscal transfers played a role in driving up inflation, but they were not the only factor. Other factors, such as the COVID-19 pandemic and the war in Ukraine, also played a significant role.

 

[11522914]

I am thinking of getting a chest freezer for meats and such, which would help.

Excellent idea. Highly recommend. I did this years ago and the freezer is always full of frozen sale items.

 

[11522914]

We don't have an Aldi anywhere close but I keep hearing about their amazing prices. Considering I was under the assumption that most of the margins in supermarkets were 10% or lower, how does Aldi manage to beat everyone else by so much?

Here you go
https://www.tasteofhome.com/collection/reason-aldis-groceries-are-so-cheap/

Here is my favorite

Unlike most supermarkets, Aldi doesn’t charge suppliers for shelf space and keeps their terms simple. According to Australian newspaper The New Daily, Aldi claims it wants “to suck the profitability out of the [supermarket] industry in favour of the consumer.” Every decision the company makes always has the customer in mind, and it pays off.

 

[NW-Bound]

I don't know where you live, but here in the OC MD area Ben and Jerry's is $6.99/pint. It sometimes goes on sale at $4.99/pint. And I haven't seen bacon for less than $5.99/lb in a long time. I don't think we're considered a HCOL area, more likely MCOL.

As far as buying food items that are not on sale, yes. Everybody (except you, I guess) does. We buy what we can when it's on sale, but a lot of stuff doesn't go on sale, or can't be kept long enough to justify stocking up when it does go on sale. I am thinking of getting a chest freezer for meats and such, which would help.

I just double-checked by looking at the sales flyer. The deal of Ben and Jerry ice cream of $2.97/pint is for the entire metropolitan Phoenix, I think. You need to have a "digital coupon" to get this deal. Regular price is $6.

My wife is very good at spotting deals, but I told her I should skip ice cream for a while.

That's how we spend the summer indoors to hide from the heat. I BS here on the forum, surf the Web looking for deals on solar panels and lithium batteries, sell some stock options when it feels right. My wife looks for grocery deals because her garden all browns up from the heat.

Boring life, but it could be a lot worse. Like evacuating for wild fires, hurricanes, tornadoes, etc...

 

[pacergal]

DGS requested dinner last night cost a little north of $70 and a quick trip to the store for the supplies, of course I did not have anything here! "Steak and shrimp with salad and grapes, Grandma":
4 small filet mignon, pound of frozen cooked large shrimp, salad fixings, grapes.
Delicious, but a bit not cheap!
He's worth every penny though.

 

[Fermion]

Interesting. A few of the items Wal-mart is also implementing (they stopped providing bags and now you have to bring your own or buy their reusable one for $0.79 or so).

As for Aldi mostly being store brand and not name brand, I can see that being cheaper as Wal-mart's great value brand is usually 20% or more lower than the name brand.

Some things though I just want. Chipotle hot sauce for instance. Tillamook cheese. I am ok with store brand for many items though.

 

[Chuckanut]

I have never eaten so much as a spoonful of Blue Bell ice cream as it’s not sold in my area.

But, I know the name because they are famous for not downsizing their 1/2 gallon carton of ice cream. Did that change?

 

[11522914]

Interesting. A few of the items Wal-mart is also implementing (they stopped providing bags and now you have to bring your own or buy their reusable one for $0.79 or so).

As for Aldi mostly being store brand and not name brand, I can see that being cheaper as Wal-mart's great value brand is usually 20% or more lower than the name brand.

Some things though I just want. Chipotle hot sauce for instance. Tillamook cheese. I am ok with store brand for many items though.

I agree. I only like Hellmann's mayo and Heinz ketchup. But I always get those 1/2 price at Publix when they're on sale and stock up. And sometimes I'll have coupons too.

 

[Gumby]

If you have a stick blender, a one pint wide mouth mason jar, an egg, and some canola oil (and optional tiny dab of mustard), it is laughably easy to make mayonnaise, and substantially cheaper than buying it.

 

[11522914]

If you have a stick blender, a one pint wide mouth mason jar, an egg, and some canola oil (and optional tiny dab of mustard), it is laughably easy to make mayonnaise, and substantially cheaper than buying it.

IIRC you also provided instructions on how to make laundry detergent. Maybe we need a Gumby thread on how to make common food and household items.

 

[NW-Bound]

Speaking of filet mignon, I recall seeing a store selling it for $9/lb, but you have to buy an entire loin. Still cheap. Shrimp varies from $5 to $8, depending on size.

Blue Bell ice cream by 1/2 gal: $7, regular price.

Just for this thread, I looked again through the flyers my wife has not thrown away. Haagen Dazs: buy 1 get 1 free, no price shown though.

We buy onion for $1 for 3 lbs all the time. The sales rotate each week from white onion to yellow onion to red onion, as they are not put on sale at the same time. You've got to buy when it is right. Cucumbers, 4 for $1, etc...

Yoplait yogurt for 37c. I don't eat it because of the added sugar, but my wife buys lots of it for her mother, who is skinny and needs some more calorie intakes.

I did not realize grocery prices are so good here. Perhaps that's why people brave the heat to move here. Heh heh heh... No wonder my wife likes to go grocery shopping so much, despite her eating so little. She got so much for her money. Heh heh heh...

 

[GenXguy]

I guess that's why my wife likes our 2 fridges, one 25 c.f. and one 32 c.f., to allow her to stock up.

Well, that's nice, but that's a different discussion than inflation. Also, many items from grocery stores do not need to be refrigerated.

Sale prices at your grocery store does not mean there's less inflation.

 

[NW-Bound]

Speaking of cheese, large grocery chains do not carry more exotic cheeses like Costco and Sprouts.

I still buy Tillamook cheese when it's on sale, but when I see imported cheese or small domestic producer cheese on sales elsewhere, I pounce.

Well, that's nice, but that's a different discussion than inflation. Also, many items from grocery stores do not need to be refrigerated.

Sale prices at your grocery store does not mean there's less inflation.

Sorry for getting carried away, but I thought people want to forget about high prices for a while.

And there are ways they can lessen the impact of inflation, which is of course real. I was just teasing people with how we could get things cheap.

 

[MichaelB]

I don’t disagree, IMO these are two sides of the same coin and inseparable. Supply chain disruptions did lead to higher prices. Even though employment fell, demand did not decline and actually rose due to the fiscal transfers. It’s also not really possible to break down those elements and assign each a portion of the total inflation number. There’s far too much methodology supporting the calculations.

I think the bigger point is this inflation was not caused by growth in the money supply, traditional monetary policy was never going to have a meaningful impact in the short term, and even its impact in the longer term is uncertain.

A second point I would make is there still is too much uncertainty about inflationary trends, and the risk is to the upside.

From Bard:

A study by the Federal Reserve Bank of San Francisco found that the fiscal transfers could have accounted for about 2.5 percentage points of the increase in inflation in the United States. However, the study also found that other factors, such as supply chain disruptions and rising energy prices, played a larger role in driving up inflation.

Overall, the evidence suggests that the fiscal transfers played a role in driving up inflation, but they were not the only factor. Other factors, such as the COVID-19 pandemic and the war in Ukraine, also played a significant role.

 

[JoeWras]

There's this psychology aspect to it too.

I think I was part of the problem. Back in early 2021, when my A/C went out, I got a new system... FAST. I honestly didn't diddle around and wait for 3 estimates. I just went for it with my trusted contractor I used 21 years earlier.

This was just as the construction madness was starting, and my spidey sense said "don't wait." I'm glad I didn't. HVAC has done nothing but skyrocket since.

Things are calming down so hopefully this aspect of inflation will die down soon.

 

[NW-Bound]

Economists are scratching their head, not being able to figure out where people got the money to pay higher prices.

I have seen recent headlines saying Jane and Joe Doe are running out of money soon. Plus high-tech workers are not doing as well with layoffs.

It will be interesting to see. I am interested in this for investment purposes. Didn't I say I am an active investor?

While people just try to rebalance to maintain an AA, I try to vary my AA to goose return.

 

[MichaelB]

Economists are scratching their head, not being able to figure out where people got the money to pay higher prices.

I think there’s not much doubt about that. From pb4uski’s post https://www.early-retirement.org/fo...ers-and-discussion-114292-58.html#post2975474

State and local governments: $450 billion
Individuals and families: $931 billion
Small businesses: $868 billion
Health care providers: $178 billion
Education: $122 billion
Unemployment benefits: $115 billion
Restaurants and bars: $81 billion
Airlines: $78 billion
Nonprofit organizations: $68 billion
Housing: $63 billion

 

[explanade]

Yeah the apps put out by grocery chains will highlight all kinds of sales items.

Even some organic items.

 

[NW-Bound]

I think there’s not much doubt about that. From pb4uski’s post https://www.early-retirement.org/fo...ers-and-discussion-114292-58.html#post2975474

Yes.

But a few months ago, I recall seeing headlines about people running out of money that fell from the sky like manna. That money should be gone already.

Recently, I saw headlines about savings rate dropping. I don't know if it has gone negative yet, meaning people dipping into their savings to live on.