Latest Inflation Data and report

[Mr. Tightwad]

Great to go green, but imagine trying to charge your plug-in when the state's power grid has rolling blackouts because it doesn't have enough power to generate electricity during peak usage hours

As a fellow Californian, I'd love to trade in my gas-power cars, but not until the state can guarantee that its power grid can provide sufficient electricity to all residents at all times. Until then, I'll stick with paying $5.5/gallon---at least I'll be able to sit in my car and enjoy the AC when it's 105 outside at 3 pm in August and I can't use AC in my house because of rolling blackout (I'm being facetious of course)

But yeah, $5.5/gallon hurts every time I fill up---nowadays I make a point of riding my bike to run errands whenever I can: good exercise, saves the environment and saves money.

I'm in Southern California and the electricity is always available. I see headlines about "CA electricity problems" and figure its a hoax or exaggeration. Perhaps somewhere up North this occurs?

I've been with SoCal Edison for 59 years and have never encountered a "rolling blackout". I don't know any Californians who have. My last bill was $24 so I'm a satisfied customer.

 

[Mr. Tightwad]

Stirring. But until the cost of depreciation, maintaining and fuelling a car is more than the similar costs of an alternative car then there is little financial incentive to get rid of a car, with or without exhaust.

Normalised to initial cost of 1, depreciation of a 10 year old car is:
= ~(1 - 20%)^9 - (1 - 20%)^10
= ~0.0268
= ~3% / y

First year depreciation:
= ~(1 - 20%)^0 - (1 - 20%)^1
= ~20% / y

Hanging on to and maintaining an old reliable car can make financial sense - they don't deflate in price as quickly as new cars.

What's the financial incentive to avoid lung cancer?

 

[luckydude]

I'm in Southern California and the electricity is always available. I see headlines about "CA electricity problems" and figure its a hoax or exaggeration. Perhaps somewhere up North this occurs?

I've been with SoCal Edison for 59 years and have never encountered a "rolling blackout". I don't know any Californians who have. My last bill was $24 so I'm a satisfied customer.

I am in SoCal as well. I remember the rolling blackouts back in 2000-2001

More recently it has been the "flex alerts" which ask people to conserve energy during peak usage time (with implicit threat of possible blackout if demand exceeds supply). I am one of those dummies who dutifully turn off my AC whenever there's a flex alert during a hot summer afternoon and sweat in my underwear while the indoor temp reaches 90s (while my neighbors happily continuing running their AC). Unfortunately this has happened all too frequently the last couple of summers.

My point is the state should ensure that it has ample electricity to supply all its residents at all times without limitation instead of subjecting its residents to "flex alerts" frequently because its power grid can't support required usage. But the state hasn't been able to do that (for whatever reason).

Anyway, I don't mean to derail the thread. I agree that the gas prices around these parts are completely insane

 

[Samsung4321]

What's the financial incentive to avoid lung cancer?

Aus: Packet of 20 cigarettes costs $A23.86 / d * 365.25 = $A8,715 / y

USA: Average cost of a pack of cigarettes is $6.28, which means a pack-a-day habit sets you back $188 per month or $2,292 per year.

If that results in terminal lung cancer, can choose between exhaust pipe carbon monoxide or electric vehicle battery voltage. All will kill dead.

 

[Samsung4321]

turn off my AC whenever there's a flex alert during a hot summer afternoon and sweat in my underwear while the indoor temp reaches 90s (while my neighbors happily continuing running their AC).

Put AC in dehumidify mode, then 90s°F / 30s°C comfortable, and as humidity is reduced, power consumption decreases.

 

[MichaelB]

There’s already a thread for the EV discussion here, no need to hijack this one as well.

 

[Badger]

We always make home-made soup, money be damned. It's so much better, and it's for the quality of life.

It just happens to be cheaper, but even if more expensive, we would still do it.

And it takes a bit of time, but as we enjoy cooking and have time in retirement, it is another improvement of the quality of life.

Home-made soup rules supreme!

+1 There are so many different types of soup that can be made in a large pot for eating now and freezing the remainder for later. It doesn't take much more time to prep large amounts if you develop some knife skills. I also do this for chili, pasta sauce and stews. Decades ago at a time when single and working for short pay and money was real tight I would spend one Saturday a month grocery shopping, cooking, and freezing all of these in bags you could boil in. Saving up to buy the groceries for the first time was a challenge. But after that it was easier to put money aside during the month for the next. Once frozen I would stack them on edge like records (remember records?) and have enough for a month of meals in the time it takes to boil water. Talk about both a money and a time saver. I ate well and healthy with home made meals on a very frugal budget. It just takes a little creativity for a great inflation fighter.


Cheers!

 

[Badger]

USA: Average cost of a pack of cigarettes is $6.28, which means a pack-a-day habit sets you back $188 per month or $2,292 per year.

So glad i stopped smoking 40+ years ago when I could buy an entire carton for $2.10 (about $18 in today's dollars).



Cheers!

 

[misanman]

Import prices up 2% in January

Import prices up 2% in January -

http://https://www.morningstar.com/news/marketwatch/20220216550/import-prices-jump-2-as-biggest-increase-in-11-years-adds-to-intense-us-inflation

 

[Running_Man]

Inflation is accelerating as more people are using their money to buy capital goods. Home prices are up 18%. Rents are up 20-40%. If you are a well to do retiree with a car and a home owned already used cars are up 40%, the average new car is up 13% with the price increase of your home is apparently making you far wealthier without working. While Lumber which had soared 500% from 311 to 1540 in 2021 only to collapse back to 490 (still a 50% gain in a year) lumber is back up 180% to 1280, retirees can avoid that, and the home inflation is making the inheritance for the children to soar.

Meanwhile the FED in its drive to end inflation will purchase 30 billion in bonds in February 2022 and is seriously thinking about taking action starting in March, really, depending of course but really really concerned about inflation, but darn need to hold down rates for a little while longer so it will maintain QE this month but as Bernake so elequently stated in 2009 it will not be difficult for the FED in the future to normalize interest rates and it's balance sheet.

But if you are struggling as a worker in an retirement personal service job renting an apartment and travelling to work in a 2009 vehicle, your options are bleak. In Mesa AZ average rents from a one bedroom apartment have gone from $1,200 to $1,560 and the cost a of a 2013 Honda Civic with 110K miles has increased from $7,900 to $13,000. Meanwhile the $5,000 you have in the bank saving for a new car is earning 0.75% annually, while the retirement community where you work for 37K per year is offering a 3% wage increase. But at least the people you work with in Scottsdale are happy with their 20%+ gains in the stock market, increase in value of their home and their 2019 Mercedes went up more in value than the depreciation of the car over the last year as you serve food and assist health care workers. The future has never been brighter for retirees, but this dicotomy is not economically healthy long term and something must give, either the inflation or the dicotomy. Meanwhile the amount of bonds the FED purchased in the last year (1.5 trillion) is equivalent to $5,000 or 14% of the average retirement home workers salary, for every individual in the country (20K for a family of 4) But this is totally normal central bank actions to protect the retiree's portfolio which is easily reversible and protects the 3% raises for the average US worker for 2022.

 

[jazz4cash]

Yes, Aldi's is one of the best things that came to our area in the last 3 years or so all withing 5 miles of our home. Aldi's, Lowes and Harbor Freight that is.

Long, long time Aldis shopper here. Went for the first time in many weeks yesterday. Some prices were up a lot but still great compared to other grocers. I was surprised to see a lot of empty shelves. IMO they are over expanding in this market, but at least the long lines are gone.

 

[ExFlyBoy5]

But if you are struggling as a worker in an retirement personal service job renting an apartment and travelling to work in a 2009 vehicle, your options are bleak. In Mesa AZ average rents from a one bedroom apartment have gone from $1,200 to $1,560 and the cost a of a 2013 Honda Civic with 110K miles has increased from $7,900 to $13,000. Meanwhile the $5,000 you have in the bank saving for a new car is earning 0.75% annually, while the retirement community where you work for 37K per year is offering a 3% wage increase. But at least the people you work with in Scottsdale are happy with their 20%+ gains in the stock market, increase in value of their home and their 2019 Mercedes went up more in value than the depreciation of the car over the last year as you serve food and assist health care workers. The future has never been brighter for retirees, but this dicotomy is not economically healthy long term and something must give, either the inflation or the dicotomy. Meanwhile the amount of bonds the FED purchased in the last year (1.5 trillion) is equivalent to $5,000 or 14% of the average retirement home workers salary, for every individual in the country (20K for a family of 4) But this is totally normal central bank actions to protect the retiree's portfolio which is easily reversible and protects the 3% raises for the average US worker for 2022.

I think you make a good point. While I lament the overall increases in the prices of items, the fact is that we are A-OK and most likely will be fine.

When I joined the military back in 1993, never did I think that the most valuable thing I would get from it was a COLA protected pension and very reasonably priced health care. There are a lot of people that joined the same time I did and got out after 4 years. A lot of those folks are struggling and struggling hard and it reminds me that I am in a very good position and very thankful. There were at least 4 occasions when I almost said f* this...I am getting out but instead, I stayed.

In pseudo related news, we can purchase gas here for about $2.85 a gallon @ Sam's and Costco or $3.09 at the non-member stations. Even though we don't drive too much these days (about 5K miles last year), I am happy to have gotten rid of my 8 cylinder pickup truck and bought a Honda Accord a while back.

 

[ShokWaveRider]

Gas here in NE. Fla. is $3.49 at the corner GATE gas station.

 

[ExFlyBoy5]

Here is an article that discusses why inflation numbers are pretty useless on the individual level.

https://awealthofcommonsense.com/2022/01/why-everyone-thinks-the-inflation-numbers-are-wrong/

No one actually has a personal inflation rate that truly matches the aggregate average. The average inflation rate is effectively useless for individual households.

And it’s not just the composition that makes people wary of this number. Inflation is the most personal of economic indicators.

 

[Chuckanut]

Great to go green, but imagine trying to charge your plug-in when the state's power grid has rolling blackouts because it doesn't have enough power to generate electricity during peak usage hours

As a fellow Californian, I'd love to trade in my gas-power cars, but not until the state can guarantee that its power grid can provide sufficient electricity to all residents at all times. Until then, I'll stick with paying $5.5/gallon---at least I'll be able to sit in my car and enjoy the AC when it's 105 outside at 3 pm in August and I can't use AC in my house because of rolling blackout (I'm being facetious of course)

But yeah, $5.5/gallon hurts every time I fill up---nowadays I make a point of riding my bike to run errands whenever I can: good exercise, saves the environment and saves money.

I am not an EV zealot, but it seems to me Californians should be seriously considering Hybrid autos. My 2019 RAV4 averages 38 mpg overall. When driving in California last year, I hit 50+ mpg on a few roads. (No, I was not coasting downhill. Maybe it's that special fuel you folks have to use. )

 

[CaptTom]

All this talk of hybrids reminds me of an old South Park episode:
https://youtu.be/ecnS1Ygf0o0

 

[Samsung4321]

Import prices up 2% in January

Ask not what John Wayne would do, ask what Paul Volker jnr II will do.

High real interest rates made it affordable for me to travel the world for 2.5 years in early 1980's. I think I'd like something similar again.

 

[Turbo29]

I'm in Southern California and the electricity is always available. I see headlines about "CA electricity problems" and figure its a hoax or exaggeration. Perhaps somewhere up North this occurs?

I've been with SoCal Edison for 59 years and have never encountered a "rolling blackout". I don't know any Californians who have. My last bill was $24 so I'm a satisfied customer.

You've never lived in an area served by PG&E. Having lived in LA DWP, SoCal Edison, SDG&E, and PG&E service areas, I can say without reservation that PG&E is worse by an order of magnitude than any of the others.

 

[tb001]

I am not an EV zealot, but it seems to me Californians should be seriously considering Hybrid autos. My 2019 RAV4 averages 38 mpg overall. When driving in California last year, I hit 50+ mpg on a few roads. (No, I was not coasting downhill. Maybe it's that special fuel you folks have to use. )

Yep. I have a plug in hybrid. I get around 20 miles to a charge, which ends up being the majority of my driving. I go so long in between fill ups I’ve forgotten what to do at the pump!

But we’re also in SoCA and are done with the random blackouts for seemingly no reason. We’re having a generator installed this week. I think it’s very dependent on where you live. Inland, where the fire danger is higher, we seem to lose power a lot more frequently.

To the OPs point, as I mentioned, energy costs here have dramatically increased. Definitely enough to impact our life.

 

[NW-Bound]

The earlier talk about food costs made me curious. How much do we spend on groceries? It is never something we worry about, but how much is it?

Here's the nice thing about Quicken. I have everything under my fingertips, all for a few clicks to bring up any subtotal of any category over any period of time.

Quicken tells me that over the last 10 years my grocery bills were 6% of the total living expenses.

However, my expenses over the whole decade varied quite a bit year to year. I had a lot of non-recurrent expenses, plus used to have a mortgage that has been paid off. When other expenses go away, the fixed cost of groceries will be higher than 6%.

If I look at just the grocery cost alone, it is quite stable each year from 2016 through 2021, and varied only 10% or so year to year. There's inflation in these years no matter how little, but it's too small to show up in the dollar amounts. Plus, we may be eating less all the time.

But then, I notice something peculiar. In 2019, the grocery cost was only 2/3 of that of other years. How could that be? We took a long road trip in Europe, but it was only for 5 weeks or so. Maybe some expenses were misclassified during that period. We could not just eat less that year. Hmm...

 

[JoeWras]

Weather is personal too. Sometimes in our area, we are in a drought or flood, yet my house is fine. I happened to get the band of showers that passed through 15% of the area during a drought, or I'm on high ground and missed the flood.

As a matter of fact, I intentionally MOVED to high ground to avoid floods.

Yet, the weather as a whole impacts me. My neighbors are hurting. My neighbors are rebuilding after fires and floods, causing price impacts to me.

Just because I moved to high ground to avoid the flood doesn't mean I wasn't impacted by the flood.

So inflation may be personal, but eventually, the carrier wave punches through the noise and it impacts everyone.

 

[GenXguy]

If you are a well to do retiree with a car and a home owned already used cars are up 40%, the average new car is up 13% with the price increase of your home is apparently making you far wealthier without working.

I own my car and my home. My home's value hasn't changed much at all in this area, and I'm planning on keeping the home and car both, so that doesn't help me. So, I'm not getting wealthier.

While Lumber which had soared 500% from 311 to 1540 in 2021 only to collapse back to 490 (still a 50% gain in a year) lumber is back up 180% to 1280, retirees can avoid that, and the home inflation is making the inheritance for the children to soar.

I can't avoid that, and inheritance isn't soaring. My home's value has changed little in this area, PLUS I have significant maintenance needing done on the house (I talked about that some in this thread). So, I can't avoid those high maintenance costs which also include much high labor costs. Eventually, many retirees are going to need maintenance done and will have to spend a lot more due to high inflation.

But at least the people you work with in Scottsdale are happy with their 20%+ gains in the stock market

But inflation continues, and stocks are falling now. Some experts suggest they will fall 40% from peaks. And even if not, there's a good chance they won't be up at all this year with all the interest rate hikes. It's not necessarily going to continue to be good for retirees, and in some areas, the home value increase isn't that much and people aren't planning to sell, so they just pay more for taxes, insurance, and maintenance on their homes.

The future has never been brighter for retirees,

For some, but not for a lot, even if we own our homes and cars. You have to look outside of your own situation and factor in those other things that will cost you more while your investments may drop.

 

[Koolau]

Here is an article that discusses why inflation numbers are pretty useless on the individual level.

https://awealthofcommonsense.com/2022/01/why-everyone-thinks-the-inflation-numbers-are-wrong/

The Carlson article is pretty good. We've discussed many times that our own "basket" of goods purchased varies person to person and year to year. So expecting the average inflation to apply is perhaps a "fool's errand."

I think the gummint averages are a convenient target to vent our frustration over inflation. I think, at the heart of our distrust of the inflation "averages" is that most of us blame the gummint for inflation in the first place. Maybe that's not completely fair, but I do know it's not MY fault! YMMV

 

[NW-Bound]

... I think the gummint averages are a convenient target to vent our frustration over inflation. I think, at the heart of our distrust of the inflation "averages" is that most of us blame the gummint for inflation in the first place. Maybe that's not completely fair, but I do know it's not MY fault! YMMV

No matter what the underlying cause, inflation is what happens when there's not enough supply to meet demand. When there's too much money sloshing around but not enough "stuff", then prices go up.

You and I as individuals may be frugal, but we cheer others to "blow the dough". Therefore, we are also guilty. It's the "collective karma".

 

[foxfirev5]

I just got my wake up call on my cc. They are offering a "Plan It" option to finance my recent steak dinner. 15-25% interest to finance a meal. While I am plenty savvy to ignore this, it does not bode well for the masses.