Latest Inflation Numbers and Discussion

[GenXguy]

Some prices do actually drop. Gasoline, nat gas, houses, rent, autos, lumber, eggs to name a few that have.

You can cherry pick a few things in some places as there has always been some price fluctuation, but that still doesn't mean that lower inflation means prices broadly are going down. Gas is still way up here - over $4/gal at some gas stations for the lowest grade, about double from 2020, the year mentioned in the article before all the high inflation hit. Rent hasn't gone down where I've looked, lumber is actually way up from where it was in early 2020, and egg prices are a unique situation due to Avian flu, so I usually leave them out of the discussion.

Pretty much everything I've spent money on in recent months has been at its highest price ever except for eggs (as mentioned) and sale items. Of course, I look for good deals. My biggest bills are up as much as 21% in just the last year alone. I'm not seeing price decreases, and I don't expect to because lower inflation is NOT deflation.

I do not see widespread confusion about this, but at least the article acknowledges deflation is a menace which must be avoided.

Well if you follow the news articles much, I'm not sure how you could miss it. That article was just the latest. I keep seeing it from supposedly reputable news sources and major network channels. I've had to clarify this to people personally as well, in real life and on this forum. But it's pretty bad when media figures, reporters, and politicians don't even get it, especially after it's become such a big concern these last couple years with such high inflation.

I didn't say the article was 100% incorrect, but I wasn't addressing the potential of real deflation that was mentioned. There's another thread about deflation, so you should post your opinions there about that.
https://www.early-retirement.org/forums/f28/deflation-from-the-inflation-thread-118068.html

 

[Koolau]

You can cherry pick a few things in some places as there has always been some price fluctuation, but that still doesn't mean that lower inflation means prices broadly are going down. Gas is still way up here - over $4/gal at some gas stations for the lowest grade, about double from 2020, the year mentioned in the article before all the high inflation hit. Rent hasn't gone down where I've looked, lumber is actually way up from where it was in early 2020, and egg prices are a unique situation due to Avian flu, so I usually leave them out of the discussion.

Pretty much everything I've spent money on in recent months has been at its highest price ever except for eggs (as mentioned) and sale items. Of course, I look for good deals. My biggest bills are up as much as 21% in just the last year alone. I'm not seeing price decreases, and I don't expect to because lower inflation is NOT deflation.

Well if you follow the news articles much, I'm not sure how you could miss it. That article was just the latest. I keep seeing it from supposedly reputable news sources and major network channels. I've had to clarify this to people personally as well, in real life and on this forum. But it's pretty bad when media figures, reporters, and politicians don't even get it, especially after it's become such a big concern these last couple years with such high inflation.

I didn't say the article was 100% incorrect, but I wasn't addressing the potential of real deflation that was mentioned. There's another thread about deflation, so you should post your opinions there about that.
https://www.early-retirement.org/forums/f28/deflation-from-the-inflation-thread-118068.html

The one place I would disagree with you (see bolded text): They get it!

 

[Montecfo]

Genxguy,

Your responses seem to often include straw men.

Some prices DO fall. This is true. I never suggested prices in general could be expected to fall.

If you acknowledge this, as I expect then we are in agreement.

And despite the awkwardly worded sentence here or there I do not think many folks in the financial press are suggesting prices in general will fall as they talk about reduced inflation. And the linked article acknowledges that deflation is neither expected nor desired.

 

[Montecfo]

Back to the jobs report, it is a much more mixed bag than headlines of 339k new jobs suggest.

Unemployment rose by 0.3, the HH survey reflected job reduction not growth. And hours worked declined-again-suggesting reduced overall demand for labor.

So it seems like this might reflect people taking 2nd and 3rd jobs.

My guess is no Fed hike as this is exactly why the pause made sense in the 1st place.

 

[Koolau]

Back to the jobs report, it is a much more mixed bag than headlines of 339k new jobs suggest.

Unemployment rose by 0.3, the HH survey reflected job reduction not growth. And hours worked declined-again-suggesting reduced overall demand for labor.

So it seems like this might reflect people taking 2nd and 3rd jobs.

My guess is no Fed hike as this is exactly why the pause made sense in the 1st place.

Very strange. It would take all the raw data to figure it out. At best, I guess you could call it a mixed bag.

 

[GenXguy]

Genxguy,

Your responses seem to often include straw men.

Some prices DO fall. This is true. I never suggested prices in general could be expected to fall.

If you acknowledge this, as I expect then we are in agreement.

It's not a straw man to address your exact comments. Ironic! lol It's more of a straw man to point out that eggs happened to come down in price in response to my comments about lower inflation, when I never said that absolutely everything will continue to go up in price. Like I said, there are some exceptions, but that doesn't mean people should generally expect lower prices when inflation is lower as the article was referring to people being in shock about the higher prices. Maybe we are in agreement, but you are just wanting to argue?

And despite the awkwardly worded sentence here or there I do not think many folks in the financial press are suggesting prices in general will fall as they talk about reduced inflation.

I didn't say "financial" press, so it could be anyone in the media I've seen talking about it or giving talking points. I see this all the time. I think I've linked to articles about this before on this forum and have even heard comments from anchors in national news media talking about "pricing coming down" when inflation numbers were lower. Leaves me shaking my head. With some time, I could also find some examples on this forum, but I'm not going to do that.

I'm in support of another rate hike. It depends how much they really want to tame this inflation beast.

 

[Koolau]

^^^^^^

How about that S&P 500 today!

 

[GenXguy]

^^^^^^

How about that S&P 500 today!

Yeah, that's both good and bad for me, probably need another rate hike the way things are going.

 

[Mulligan]

Too many people including in the media are still confused that having less inflation than we had at the peak, yet still high inflation, does not mean prices are coming down. Amazing.

https://www.cnbc.com/2023/06/02/when-will-inflation-end-economists-weigh-in.html


They don't seem to understand that lower inflation doesn't mean prices are coming down. That would be deflation. I'm seeing and hearing this sort of thing regularly, even sometimes from people on this forum.

I havent seen the term used here, but it is the term that needs to be used to clarify. And that word is disinflation. Disinflation is the lowering of inflation rate. But that is not to be confused with deflation. Currently we are in a disinflationary environment.

 

[GenXguy]

I havent seen the term used here, but it is the term that needs to be used to clarify. And that word is disinflation. Disinflation is the lowering of inflation rate. But that is not to be confused with deflation. Currently we are in a disinflationary environment.

The term has been used in this thread, but that's still not prices coming down, which is what I've heard many times in the media and is referenced in the linked article. But someone might point out the price of eggs went down.

 

[Montecfo]

The term has been used in this thread, but that's still not prices coming down, which is what I've heard many times in the media and is referenced in the linked article. But someone might point out the price of eggs went down. [emoji23]

Suggest you take that to the "deflation" thread.

 

[Koolau]

The term has been used in this thread, but that's still not prices coming down, which is what I've heard many times in the media and is referenced in the linked article. But someone might point out the price of eggs went down.

Speaking of which, I bought a dozen large white eggs for $1.26. I thought there must be something wrong with the price, but they said not. Whoo, hoo!

 

[Chuckanut]

99 cents a dozen for large eggs at Safeway this week.

I can see why food has a volatile reputation.

 

[aja8888]

99 cents a dozen for large eggs at Safeway this week.

I can see why food has a volatile reputation.

Sounds like the hen houses went on overtime!

 

[CaptTom]

I'll call it "deflation" when the prices fall below what they were before the sudden spikes we've seen recently.

I'm really tired of headlines forecasting doom and gloom when a bubble bursts, as if the values at the peak were somehow "normal." This can be about general inflation, oil prices, home prices, whatever.

If you insist on calling the down slope of a bubble "deflation,' then don't act like it's a bad thing. I really doubt most consumers see it that way. I guess there's no single, catchy word for "returning to somewhere close to normal."

 

[Gumby]

From the Federal Reserve Bank of San Franscisco

The MIT Dictionary of Modern Economics defines deflation as "A sustained fall in the general price level." Deflation represents the opposite of inflation, which is defined as an increase in the overall price level over a period of time. In contrast, disinflation, represents a period when the inflation rate is positive, but declining over time.

https://www.frbsf.org/education/pub...1999/september/deflation-disinflation-causes/

 

[Time2]

But your continued carping about it will not improve anything - for you or anyone else.

But that's half the conversation at my weekly breakfast with the guys!

 

[Chuckanut]

99 cents a dozen for large eggs at Safeway this week.

I can see why food has a volatile reputation.

Just in time the WSJ has an article on how eggs are going back on sale. Glad they have caught up with our illustrious group of inflation experts.

https://www.wsj.com/articles/eggs-a...nths-after-prices-hit-records-e6e13aae?page=1

“Now, egg supplies have bounced back, industry officials and farmers say, as the disease’s spread has slowed and flocks of laying hens have been rebuilt. At supermarket chains such as New York-based Tops Markets, shoppers recently saw eggs on sale for the first time in months.

“Prices should all be under $2 a dozen,” said Sue Durfee, who oversees eggs, dairy and other items at Tops. “We plan on trying to promote them once or twice a month.” The company recently offered eggs at a discounted $1.49 a dozen, and plans to run sales at $1.29 in the coming months, she said, after not giving discounts on eggs in more than a year.”

 

[mf15]

R-134A Freon at walmart year or so ago $4.xx a can, now 10 bucks.
Something is not right.
Oldmike

 

[Koolau]

R-134A Freon at walmart year or so ago $4.xx a can, now 10 bucks.
Something is not right.
Oldmike

Chemical costs are notoriously price-volatile. I would guess in this case, the huge back-log of ocean-shipping has a lot to do with such things as freon price.

 

[jldavid47]

Chemical costs are notoriously price-volatile. I would guess in this case, the huge back-log of ocean-shipping has a lot to do with such things as freon price.

Chlorine for our spa was $14 two years ago for 2 pounds, $24 last year and $30 this year. I bought 5 pounds of a different brand instead for $60 just to get the average cost back to 2022 levels.

 

[mf15]

Industrial chemist since 1972, actually worked in the industry since 1966. My guess, price gouging by everyone involved, they had tons of stock. My guess, they will do it until they can't. Yea, getting very cynical in my old age.
Oldmike

 

[GenXguy]

But that's half the conversation at my weekly breakfast with the guys!

They should order eggs for breakfast.

 

[GenXguy]

There's another thread for posting those specific examples of current inflation:

https://www.early-retirement.org/forums/f27/examples-of-current-inflation-add-yours-114205.html

 

[Mulligan]

From the Federal Reserve Bank of San Franscisco







https://www.frbsf.org/education/pub...1999/september/deflation-disinflation-causes/

The Fed and the public will have different opinions on inflation as consumers memories are longer, while Fed sticks with the current times. Exaggerated example…If we had 100% inflation one year, then 0% inflation the following year, Fed would consider inflation dead. While a consumer would disagree. As that scenario still stings the wallet even if that scenario showed a current 0% CPI.