Latest Inflation Numbers and Discussion

[MichaelB]

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.

Transfers that went to lower income segments are probably spent, as the propensity to spend is quite high in the bottom income half of households. Transfers also went to higher income households and businesses, which have a lower propensity to spend, so it would be no surprise if there were still a positive balance of a pandemic related asssitsnce.

After working through the impact of the pandemic assistance, the savings rate doesn’t look negative or trending down, although it is a bit lower than pre-pandemic levels https://fred.stlouisfed.org/series/PSAVERT

 

[harley]

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.

What I've noticed at our local Harris Teeter is that items have an ongoing price, say $6.99 for a 12 pack of Diet Pepsi. Then they do a buy two get one free, but the price for one is suddenly $8.99, so you are getting three for about $6.00 each. I've seen that process with a number of the buy x, get x sales. Then a short while later, the sale goes away, but the increased price stays. I'm sure this is a marketing professional's way of hiding the price increases, but it's really annoying.

On a side issue, I've had to stop drinking my previous lifeblood (diet Pepsi) because you can't have colas with kidney disease (due to phosphates). So I've switched to clear sodas, mostly 7-Up clones. I've always drunk diet sodas, not liking the way the sugary ones feel on my teeth. Personal issue, plus I don't need the additional calories. And I've switched to store brands since the prices have gone from about $2.50/12-pack on sale to $5.00+/12-pack on sale in the last couple of years. But I'm suddenly having a really hard time finding the store brand diet clear sodas on the shelves at all. There is even a much smaller selection of diet clear name brand sodas (7-Up, Sprite). I'm wondering if there is a shortage of low calorie sweeteners or something. Luckily these are something I can stock up on whenever they are both available and on sale. But it's happening far less often these days.

 

[Gumby]

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.

I don't doubt that. It has been a very strange three years in terms of whipsawing the economy.

 

[Koolau]

On top of that, food cost is just a small part of living expenses that we never really worry about food. In many other countries, food cost is a much bigger percentage of living expenses.

This site suggests that we (on average) spend 11.3% on food in 2023. That's not insignificant. https://www.ers.usda.gov/data-produ...ting-the-essentials/food-prices-and-spending/

 

[Gumby]

For the young wife and I, everything we buy at the grocery or drugstore, which also includes cleaning supplies, toiletries, etc., constitutes about 8% of our total spending. By contrast, income and property taxes are about 25%.

 

[MichaelB]

This site suggests that we (on average) spend 11.3% on food in 2023. That's not insignificant. https://www.ers.usda.gov/data-produ...ting-the-essentials/food-prices-and-spending/

In the early 1900’s our grandparents spent over a quarter of their household income on food. It’s dropped by more than half since then.

In addition, over the past century the % of household income spend on food prepared “away from home” has increased, so looking only at food prepared at home, the % of budget has fallen by almost 3/4.

Edit to add - unrelated to the thread topic, but I’ve always thought this decline in the cost of food is one of the drivers of obesity in the US.

 

[NW-Bound]

Numbers... I always like numbers to quantify what we are talking about, instead of hand waving.

Quicken says that ever since I used it to download financial transactions, I have spent 6.8% on food (groceries+restaurants). And this includes toiletries, detergent, and other things we get at these stores. I bought beer from grocery stores, but not most wine and hard liquor.

For the last 3 years, it's 7.2%.

Our low numbers on food do not mean our other expenses are higher than the average. Rather, I believe that it attests to my wife's skillful shopping. Heh heh heh...

PS. Worldwide, food has become less expensive. People in 3rd world countries are also not as skinny as they used to be.

 

[Marc]

Isn't this thread supposed to be about government inflation numbers - past, present, and future - and the thread "examples of current inflation" to be the place for folks to post individual inflation experiences?

thanks,

Marc

 

[JoeWras]

The scope of the thread has inflated.

 

[NW-Bound]

Transfers that went to lower income segments are probably spent, as the propensity to spend is quite high in the bottom income half of households. Transfers also went to higher income households and businesses, which have a lower propensity to spend, so it would be no surprise if there were still a positive balance of a pandemic related asssitsnce.

After working through the impact of the pandemic assistance, the savings rate doesn’t look negative or trending down, although it is a bit lower than pre-pandemic levels https://fred.stlouisfed.org/series/PSAVERT

OK, that chart shows that the personal savings rate that ran about 9% in 2019 got as low as 2.7% in 2022, and only rebounded back to the 4% range recently. I am surprised it was that high pre-pandemic.

Is the lower savings rate the effect of inflation, or revenge spending? Maybe both. I don't know, but it does mean people are spending more out of their income because they now save less. If they cut back spending in the future, that will help ease the inflation pressure.

 

[NameTaken2]

In the early 1900’s our grandparents spent over a quarter of their household income on food. It’s dropped by more than half since then.

In addition, over the past century the % of household income spend on food prepared “away from home” has increased, so looking only at food prepared at home, the % of budget has fallen by almost 3/4.

Interesting-
Often wonder how many billion $ that our grandparents never spent are now added to family budgets for substantial cell phone/internet/TV bills.
-my FIOS bill went up nearly 18% in May, and cell phone going up about 10%.

 

[Koolau]

For the last 3 years, it's 7.2%.

Our low numbers on food do not mean our other expenses are higher than the average. Rather, I believe that it attests to my wife's skillful shopping. Heh heh heh...

More likely your 7.2% vs 11.3% average is because your overall spending (overall income) is significantly higher than average - and you can only eat so much.


IOW You aren't average.

 

[Gumby]

....

IOW You aren't average.

Sometimes, I used to say to one of my friends at the office "I have done X in that situation" or "I would do Y in this case". She would invariably respond with "Yes, but you have to understand that you are not a normal person."

 

[NW-Bound]

I don't know what the average is, but my wife would be mightily upset that she's got no credit for her shopping skills.

Good thing she does not surf this forum.

 

[Koolau]

I don't know what the average is, but my wife would be mightily upset that she's got no credit for her shopping skills.

Good thing she does not surf this forum.

Don't tell on us. She might make you quit.

 

[Montecfo]

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.

And now credit card balances at a record.

 

[Montecfo]

Isn't this thread supposed to be about government inflation numbers - past, present, and future - and the thread "examples of current inflation" to be the place for folks to post individual inflation experiences?

thanks,

Marc

You are correct.

And it they used to be used that way.

Ah.... memories.

 

[CaptTom]

Isn't this thread supposed to be about government inflation numbers - past, present, and future - and the thread "examples of current inflation" to be the place for folks to post individual inflation experiences?

Yup. One thread for government numbers, a separate one for reality.

Don't ever let reality interfere with a good fantasy.

 

[Koolau]

Yup. One thread for government numbers, a separate one for reality.

Don't ever let reality interfere with a good fantasy.

Here, I thought you were gonna say "Don't ever let your reality interfere with gummint reality."

 

[MichaelB]

Yup. One thread for government numbers, a separate one for reality.

Don't ever let reality interfere with a good fantasy.

Here, I thought you were gonna say "Don't ever let your reality interfere with gummint reality."

Snarky posts are no substitute for thoughtful exchange. To these comments I would respond with 1) “gov’t numbers”, which in this case refer to data published by the BLS and Census Bureau, have been overwhelmingly validated by independent third parties that would benefit if they could prove the opposite, and 2) if there is indeed an “economic reality” that is different, can you please provide a legitimate link, reference, or documentation of any kind to support that view.

In addition, I would add that economic data over time has to add up. If data is wrong in one area, such as GDP growth, unemployment, or inflation, it will soon show up elsewhere and eventually come into conflict. This has not happened. In fact, just the opposite. The numbers over time show the data to be a reliable snapshot of economic activity and trends.

 

[Chuckanut]

And now credit card balances at a record.

And CC interest rates are at or near all time highs.

In the meantime, the average credit card interest rate is 18.9% APR. Retail credit cards hit an all-time high of 26.7%. And you may want to sit down for this one: The average store-only credit card now charges 28.2% interest.

 

[Fermion]

Part of the problem is with perceived inflation vs the official numbers and the fallacy of trying to apply the official numbers to any singular purchase.

If I hear that inflation has been 40% overall since 2010, yet when I go to buy some copper wire and find it is 300% higher than it was in 2010, I feel cheated by the official numbers, even if a can of beans in 2010 was $0.79 and now is only $1.05. I don't need the beans, I need the wire.

 

[Montecfo]

Part of the problem is with perceived inflation vs the official numbers and the fallacy of trying to apply the official numbers to any singular purchase.

If I hear that inflation has been 40% overall since 2010, yet when I go to buy some copper wire and find it is 300% higher than it was in 2010, I feel cheated by the official numbers, even if a can of beans in 2010 was $0.79 and now is only $1.05. I don't need the beans, I need the wire.

You can't expect the price inflation of any single volatile commodity product to be at the average.

And you choose an economically sensitive commodity priced in a very weak economy to the same one in a growing economy.

I think it is expectations that require adjustment.

 

[GenXguy]

Part of the problem is with perceived inflation vs the official numbers and the fallacy of trying to apply the official numbers to any singular purchase.

If I hear that inflation has been 40% overall since 2010, yet when I go to buy some copper wire and find it is 300% higher than it was in 2010, I feel cheated by the official numbers, even if a can of beans in 2010 was $0.79 and now is only $1.05. I don't need the beans, I need the wire.

Yeah, that 40% is how much my homeowner's insurance has gone up in 3 years. Property tax, home maintenance, the big bills are up a lot. That's the reality that hurts despite the lower gummint numbers.

 

[Montecfo]

Yeah, that 40% is how much my homeowner's insurance has gone up in 3 years. Property tax, home maintenance, the big bills are up a lot. That's the reality that hurts despite the lower gummint numbers.

But apples and oranges on the property tax since it has two elements: the rate and property value.

And we all know property values up sharply over the time period you mentioned.