An Interesting Look At Inflation

[ladelfina]

Just saw this linked at The Big Picture:

All of Inflation’s Little Parts - The New York Times

I love the part where fuel oil is .2% of spending.

Enjoy!!!

 

[Notmuchlonger]

Just saw this linked at The Big Picture:

All of Inflation’s Little Parts - The New York Times

I love the part where fuel oil is .2% of spending.

Enjoy!!!

According my sister her and my b-law paid 2500 to 3200 this/last year for fuel oil. That is off a 200000 or so income. About 1.5 percent? Ya not buying that .2% either Then again they live in a huge old house that probably isnt well insulated. Thats another can of worms.

 

[mb]

According my sister her and my b-law paid 2500 to 3200 this/last year for fuel oil. That is off a 200000 or so income. About 1.5 percent? Ya not buying that .2% either Then again they live in a huge old house that probably isnt well insulated. Thats another can of worms.

I think that this is very much a regional thing. It may sound incorrect if you live in New England but in the west for example almost no one uses fuel oil for heating so there are a lot of zeros going into that average. I am 51, have lived in seven different houses in three different states on the pacific coast, in the middle Atlantic and in the Rockies and have never spent even a single penny on fuel oil.

MB

 

[ladelfina]

fine, mb.. but the vast majority have heating costs of SOME kind..
Fuel oil .2%
Propane and wood are lumped together at .1%
Piped gas is 1.1%
ALL electric is 2.8%

Does it really sound logical that all US home heating costs + electricity is 4.2% of consumer spending?
It doesn't to me... that sounds tiny.

Cable is 1.2%.. do people really spend 1/3 as much on cable as on all heat + electric!?!?
What-evah...

 

[RockOn]

Just saw this linked at The Big Picture:

All of Inflation’s Little Parts - The New York Times

I love the part where fuel oil is .2% of spending.

Enjoy!!!

Great chart

I find it interesting that my health insurance premium has gone up 10% a year for about 10 years now (it seems), and at the same time they raise my deductable and copays, yet an average of all 10 health catagories (not weighted) is 3.8%. Now explain that one to me Independent! I'm sure you can find some stats that show my premiums only went up 75.439% or so.

All of health care is 6%? Not at my house, my premiums alone are about 20% (I pay 1/2, I suppose that is what they count) of an average families income, not to mention all the other medical costs not covered which is probably another 5% (copays, deductables, dental work) on a typical families income.

Also look at the huge housing component. As house prices doubled and tripled, they use some obscure rent increase. It's obviously a rigged game and most of us know it.

On the 0.2% spending on fuel oil, notice how "clocks, lamps, and decorations" were 0.3% spending. "Other Linens" were 0.2%. It's all a terrible joke.

College is up 6.1% but I paid a 12% (average) increase each of the last two years.

"Other Motor Fuel" gets 0.3% of spending ...tell it to the truckers.

 

[ladelfina]

RockOn, to be fair the truckers aren't paying for fuel as a personal consumption item. Maybe that figure is fuel for boats and such?
(I agree w/you otherwise.. maybe people are using clocks, decorations, and linens as a combustible heat source.)

 

[RockOn]

RockOn, to be fair the truckers aren't paying for fuel as a personal consumption item. Maybe that figure is fuel for boats and such?
(I agree w/you otherwise.. maybe people are using clocks, decorations, and linens as a combustible heat source.)

On truckers, I thought of that after I posted. There are a lot of family owned independent truckers. I suppose the fact they pay $1000 to fill up once really doesn't count in official CPI-U since trucking families are not average, but they are likely in trouble because of rising costs. Those families probably see the cost of diesel for their truck as a budget item and when it goes up, they see that as serious inflation.

Some people have vehicles that run on diesel, ethanol, and there are some hydrogen vehicles. Diesel is about $4.50 a gallon now.

 

[d]

the 0.2% spending on fuel oil, notice how "clocks, lamps, and decorations" were 0.3% spending. "Other Linens" were 0.2%. It's all a terrible joke.

knowing how facts might get in the way, it might nonetheless be useful to note that for 2006 personal consumption expenditures totaled $9.2245 trillion while pce for "fuel oil and coal" totaled $21.6 billion: yep, that's .2%

 

[mb]

fine, mb.. but the vast majority have heating costs of SOME kind..
Fuel oil .2%
Propane and wood are lumped together at .1%
Piped gas is 1.1%
ALL electric is 2.8%

Does it really sound logical that all US home heating costs + electricity is 4.2% of consumer spending?
It doesn't to me... that sounds tiny.

Cable is 1.2%.. do people really spend 1/3 as much on cable as on all heat + electric!?!?
What-evah...

Ladelfina,

4.2% doesn't strike me as obviously wrong but I would assume that much of the electric usage is for things other than heating of course and a lot of it is probably for air conditioning.

Let's look at the numbers.

I will assume that only half of electric goes to heating this makes it 2.8% rather than 4.2%. The median household income is about $50k (this is one instance where it is theoretically correct to use average which is a larger value rather than median but I found median first) so assuming that you only heat for 6 months a year gives a monthly heating cost of $233/month assuming that my calculations are correct.

This may not be enough for a January in New England according to some of the posts I have read on this forum but again it doesn't strike me as being an obviously wrong answer for the country as a whole. If you have other information let me know.

With regard to the relative costs for cable, since I don't subscribe to cable I don't have a clue.

MB

 

[RockOn]

knowing how facts might get in the way, it might nonetheless be useful to note that for 2006 personal consumption expenditures totaled $9.2245 trillion while pce for "fuel oil and coal" totaled $21.6 billion: yep, that's .2%

and the point is.... you lost me.....are you saying consumers spent $21.6 billion on "Other Linens", and $32.5 billion on "Clocks, Lamps and Decorations" at the same time they spent $21.6 billion on Fuel Oil?

 

[clifp]

Cable is 1.2%.. do people really spend 1/3 as much on cable as on all heat + electric!?!?
What-evah...

My cable bill (includes high speed internet) on some month exceeds my electricity typically electricity is $20 more. My mom who lives in Oregon (so she has heating cost electric+wood) her cable bill (internet+phone) is roughly 2/3 the cost of electricity.

 

[clifp]

and the point is.... you lost me.....are you saying consumers spent $21.6 billion on "Other Linens", and $32.5 billion on "Clocks, Lamps and Decorations" at the same time they spent $21.6 billion on Fuel Oil?

I own the largest propane and fuel oil distributor in the country American Propane APU it has 10% market share and revenue of 2.4 billion. So 21.6 billion sounds spot on. I also own a smaller competitor SPH has revenues of 1.46 billion.

BTW, the both have distribution yield of above 7% and increase 5% year (faster in SPH's case)

 

[cute fuzzy bunny]

My cable bill is 1/4 of my electric bill on average. If you roll my cable and satellite bills together, maybe half.

That heating oil thing in the northeast and northern central US is a biggie. I remember a lot of houses back there that had old coal furnaces fitted with oil injectors and bad insulation that gobbled a few thousand gallons of oil per season.

 

[Johnphx]

Ladelfina,

4.2% doesn't strike me as obviously wrong but I would assume that much of the electric usage is for things other than heating of course and a lot of it is probably for air conditioning.

Let's look at the numbers.

I will assume that only half of electric goes to heating this makes it 2.8% rather than 4.2%. The median household income is about $50k (this is one instance where it is theoretically correct to use average which is a larger value rather than median but I found median first) so assuming that you only heat for 6 months a year gives a monthly heating cost of $233/month assuming that my calculations are correct.

This may not be enough for a January in New England according to some of the posts I have read on this forum but again it doesn't strike me as being an obviously wrong answer for the country as a whole. If you have other information let me know.

With regard to the relative costs for cable, since I don't subscribe to cable I don't have a clue.

MB

Certainly true here. I have gas heating (including water heater) and electric cooling (including stove).

My average monthly heating bill is $32, from a low of about $10 in the summer to a high of about $80 in the winter.

My average monthly electric bill is $120, from a low of about $40 in the winter to a high of $250 in the summer.

I have a ~1700sf house and I keep the thermostat 84 during the day and 78 at night in the summer. But anecdotely I am the exception.

Most of the people I work with keep it much cooler in the summer (about 68 degrees) and some of them have electric bills around $400-500 for a 2400sf house.

With regards to cable, I have basic cable only (not expanded and no movie channels or packages) and high speed internet and my cable bill runs about $110 per month, so its pretty much equal to my average electric bill during the year.

 

[W2R]

With regards to cable, I have basic cable only (not expanded and no movie channels or packages) and high speed internet and my cable bill runs about $110 per month, so its pretty much equal to my average electric bill during the year.

Wow! What a rip-off. I get the same cable - - "bare bones" basic TV and mid-level cable internet from Cox Cable - - for $58.47/month.

My most recent electric bill for my 1558 square foot house was $36.42 though it can be much higher in the late summer. Never anywhere near as high as yours, but then my house is smaller too.

 

[teejayevans]

Great chart

I find it interesting that my health insurance premium has gone up 10% a year for about 10 years now (it seems), and at the same time they raise my deductable and copays, yet an average of all 10 health catagories (not weighted) is 3.8%. Now explain that one to me Independent! I'm sure you can find some stats that show my premiums only went up 75.439% or so.

All of health care is 6%? Not at my house, my premiums alone are about 20% (I pay 1/2, I suppose that is what they count) of an average families income, not to mention all the other medical costs not covered which is probably another 5% (copays, deductables, dental work) on a typical families income.

Also look at the huge housing component. As house prices doubled and tripled, they use some obscure rent increase. It's obviously a rigged game and most of us know it.

Health insurance is 0.5% of spending

Maybe for those in congress it is.
TJ

 

[Johnphx]

Wow! What a rip-off. I get the same cable - - "bare bones" basic TV and mid-level cable internet from Cox Cable - - for $58.47/month.

My most recent electric bill for my 1558 square foot house was $36.42 though it can be much higher in the late summer. Never anywhere near as high as yours, but then my house is smaller too.

Yeah, with regards to the cable I am getting ripped off for sure. My HOA fees include $25 per month for basic cable (just the network channels) and then I pay $30 for expanded basic. Internet is about $50 per month.

Living in Maricopa I don't get Cox (which I imagine would be cheaper) we have a smaller provider, Orbitel, and because cable companies have local monopolies I am stuck.

I could go with Satellite but I have been told that the $25 built into our monthly HOA dues is non negotiable and will not be dropped.

Our electric is also higher I suspect because we are forced to buy from a 3rd party broker, Electrical District #3. They don't produce any power themselves, they simply buy it from APS and SRP and then resell it to us (and naturally they need to cover their costs so the price is higher).

Lol, hindsight is 20/20.....

 

[cute fuzzy bunny]

Sounds like you need a new homeowner board and some revisions to your utility providers and costs.

 

[calmloki]

a very interesting interactive graphic on the CPI:
All of Inflation’s Little Parts - The New York Times

 

[W2R]

Lol, hindsight is 20/20.....

Phoenix is probably an area with higher cost of living in general than what we have in Louisiana. That might have something to do with it. I have often suspected that utility/cable prices could be influenced by what the market can bear.

 

[RonBoyd]

a very interesting interactive graphic on the CPI:
All of Inflation’s Little Parts - The New York Times

Wow! What an impressive chart. (Now, I will look at the numbers.)

 

[Independent]

Great chart

I find it interesting that my health insurance premium has gone up 10% a year for about 10 years now (it seems), and at the same time they raise my deductable and copays, yet an average of all 10 health catagories (not weighted) is 3.8%. Now explain that one to me Independent! I'm sure you can find some stats that show my premiums only went up 75.439% or so.

All of health care is 6%? Not at my house, my premiums alone are about 20% (I pay 1/2, I suppose that is what they count) of an average families income, not to mention all the other medical costs not covered which is probably another 5% (copays, deductables, dental work) on a typical families income.

Also look at the huge housing component. As house prices doubled and tripled, they use some obscure rent increase. It's obviously a rigged game and most of us know it.

On the 0.2% spending on fuel oil, notice how "clocks, lamps, and decorations" were 0.3% spending. "Other Linens" were 0.2%. It's all a terrible joke.

College is up 6.1% but I paid a 12% (average) increase each of the last two years.

"Other Motor Fuel" gets 0.3% of spending ...tell it to the truckers.

I see the same thing here - "This is what I think I spend. The CPI says the average family spends their money differently. Therefore, the CPI is wrong. And not just wrong, but intentionally wrong."

You are skeptical of fuel oil, vs. "clocks, lamps, and decorations" and "other linens". But, judging from what you've posted here, you have done zero research to compare them. When d actually does some research, you ignore it.

I did some research on college costs that support the 6.1%. You said "nice data" but proceeded to ignore it an only look at your situation.

Now, you're confusing producer costs with consumer costs. If I own a retail store, the money I spend stocking the shelves isn't directly part of the CPI. Remember, the "C" stands for consumers. If I own a trucking business, my cost for diesal isn't counted directly in the CPI. In both cases, the CPI will include the final impact on consumer prices, but the fact the business is a sole proprietorship doesn't convert producer costs into consumer costs.

I think the correct question at this point is "What evidence would be sufficient to convince you that the CPI is a reasonably good measure of average consumer prices in the US?" You have an opinion that the CPI is grossly wrong, I'm becoming convinced that your opinion is not "falsifiable"
Falsifiability - SkepticWiki

 

[RockOn]

I see the same thing here - "This is what I think I spend. The CPI says the average family spends their money differently. Therefore, the CPI is wrong. And not just wrong, but intentionally wrong."

You are skeptical of fuel oil, vs. "clocks, lamps, and decorations" and "other linens". But, judging from what you've posted here, you have done zero research to compare them. When d actually does some research, you ignore it.

I did some research on college costs that support the 6.1%. You said "nice data" but proceeded to ignore it an only look at your situation.

Now, you're confusing producer costs with consumer costs. If I own a retail store, the money I spend stocking the shelves isn't directly part of the CPI. Remember, the "C" stands for consumers. If I own a trucking business, my cost for diesal isn't counted directly in the CPI. In both cases, the CPI will include the final impact on consumer prices, but the fact the business is a sole proprietorship doesn't convert producer costs into consumer costs.

I think the correct question at this point is "What evidence would be sufficient to convince you that the CPI is a reasonably good measure of average consumer prices in the US?" You have an opinion that the CPI is grossly wrong, I'm becoming convinced that your opinion is not "falsifiable"
Falsifiability - SkepticWiki

If being understated about 3% is "gross", then that is my opinion.

The evidence to convince me, if you could prove John Williams research on the CPI to be incorrect. I choose to accept that he is accurate in how the method of reporting has changed. Nobody has challenged him with any facts. You have said he is wrong but have not offered any proof of that. If his research is correct, there is no reasonable explanation for that other than fudging, I'm the one adding "intentional". You don't want to look into that anymore than I want to spend 1000's of hours researching how the fudging is accomplished. (I noticed how you ducked the healthcare numbers, you only see what suits your point of view. I discussed the truckers previously, it wasn't necessary to go there. FWIW there was a story on the NBC Nightly News just a few minutes ago about how independent truckers families are getting hurt by soaring fuel inflation.)

P.S So you would be happy if I researched "other linens"? Get real, why the heck would anyone care about the price of "other linens" and then give it the same weight as fuel oil? One is a need, other linens, who the heck even knows (or cares) what it is. Same goes for "clocks, lamps, and decorations", that get's 50% more weight than fuel oil. And then house prices, which is the largest expenditure, and where we put our "other linens, clocks, lamps, and other decorations", are not included. They fudge that away with some phony rent equivalents. I can hardly stand it.

Where do I put the cost of the plumber I just hired to fix my sink? Or my new roof. I don't see a catagory for those. But "other linens", wouldn't want to leave that out.

 

[ladelfina]

Rockon.. it's there..
under "repair" (also .1%) which is half of garden/lawn care's .2% (!),
and rivaling "tableware".. also at .1%
(not to be confused with "dishes" which are another .1%).

 

[RockOn]

Rockon.. it's there..
under "repair" (also .1%) which is half of garden/lawn care's .2% (!),
and rivaling "tableware".. also at .1%
(not to be confused with "dishes" which are another .1%).

I can't believe I missed it, I'm going to have to get a higher grade of reading glasses

Let me see, we don't include house prices because we only move every 10 years or so and don't need to buy one every year, but we include tableware and dishes, with our other linens, clocks, and lamps. Now those are major annual shopping events at our house