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Comment by notyourday | Hacker News Reader

Anyone who has been to a supermarket in the last 12 months knows that the 2.6 percent increase in consumer prices is observably not true. I buy the same basket of the generic products ( chicken quarters, produce, beef, eggs, bacon, dairy products ) . Compared to this time in 2020 I'm spending at least 20% more. People who buy processed food(s) are spending at least 30% more.

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> Prices for food at home increased 3.3 percent over the past 12 months. All six major grocery store food group prices advanced over the period, with increases ranging from 1.6 percent (dairy and related products) to 5.4 percent (meats, poultry, fish, and eggs). Prices for food away from home rose 3.7 percent, as the 6.5-percent advance in prices for limited services meals was the largest 12-month increase since data were first collected in 1997.

Doesn't quite fill your 20% claim, but 5.5% for meats and 6.5 for limited services meals (places where you primarily order at the counter/drive-through/online) is quite the bump!

I think he is asserting that the CPI is manipulated to the downside. Trying to refute his point with CPI numbers is like quoting Bible verses to an atheist.

You are being downvoted but this is also my experience. My grocery bill is up more than 15% like for like (I shop exclusively online so it's easy to track) and more than that in total because of volume increases. My utility rates are up >10%. Housing costs are way up where I live. I would guess my overall baseline cost of living is up at least 10% when you remove the impact from lower commuting and eating out costs.

Watch out for downsizing of the containers too

Precisely. There is manipulation across the board. Some of the packaging is getting really ridiculous. The argument that higher inflation would indicate that the economy has been contracting could be phrased differently: What if the "great slowdown" as per Peter Thiel is one in value, lack in progress, cheaper quality products, shaving off everywhere to retain a facade, pushing out real world goals and targets to future decades etc. This does not mean there won't be any progress or some obvious deflation (electronics, biotech). It's still an important discussion to be had (the effect of found monetary standards on the economy/technological progress. http://wtf1971.com/ and The Bitcoin Standard obviously have a different perspective on these reported inflation numbers.

Since I cook meat often, I kept track of the Trader Joe's meats from early 2020, to know

Flank steak went from $8.99/lb to $12/lb NY Strip, from $10.99 to $14.99 Fillet Mignon from $18.99 to $24.99

Chick has gone up the same.

For many food items, inflation is 10% - 15% or more

Just post the in-store prices and there will be an end to the horror.

Consider fake meat. A veggie burger used to cost a buck or so. Compare that to today’s beyond beef which is almost beyond beef in price. Hedonic adjustments in everything.

The difference is that flank steak is still flank steak, while the veggie substitutes may have improved in quality over time.

While we are dealing in anecdotes, I buy mostly processed foods and I can only think of a single food item I regularly purchase that has seen a price increase, and that was small and due to a change in the grocery store's suppliers. In fact, I have been seeing more sales recently on items I would purchase anyway which I think has dropped my food costs a bit.

Processed/packaged food/goods has another trick where they give you less but it seems like the same amount, and charge you the same, so you don't notice it as much. I bet you a lot of those things you're buying you're actually getting less than you were 1-2 years ago. They reduce the number of toilet roll sheets by 30-40, or the ounces in the package go down 3-4 oz, or they give you 1 less hot dog.

Here's a site that tracks the downsizing (I've also seen it called 'Shrinkflation'), and there are a lot of examples on the site. I'm sure you'll find something (probably multiple somethings) you buy on there that got downsized in the last year or two.

https://www.mouseprint.org/category/downsiz/

The top one on there shows they reduced Dorito's bags from 9 3/4 oz to 9 1/4 oz....sneaky sneaky!

Good thing CPI isn’t calculated using anecdotal evidence from “anyone who has been to the supermarket”.

Learn more about the calculation here: https://www.bls.gov/news.release/archives/cpi_04132021.htm

CPI is rigged, as it doesn't account for many items that people spend money on

If you think it is a fair indication, I have a bridge to sell to you

CPI isn’t “rigged”. CPI measures exactly what it measures and measures it transparently.

Whether you think it and it’s constituent parts are good metric for measuring inflation is a different conversation. But that doesn’t make it “rigged”.

CPI is rigged in the sense that it is one attribute that status quo-apologists trot out to say “nothing to see here” when the real cost of goods is observably higher for all but the ultra-wealthy. “It’s not hyperinflation, it’s just that everything you conceivably want to buy is coincidentally much more expensive, because [reasons].”

“The real cost of goods is observably higher”?

I don’t get how anecdotal evidence trumps repeatedly buying and measuring the cost of a vast cross section of products everyday people consume?

Help me understand the conspiracy here? Who is doing the rigging and how?

The Fed and U.S. government are rigging our economic system to backdoor tax the middle class while gaslighting all of us into thinking that this is normal.

You don’t print $10T and handwave away millennia of basic economic principles.

Help me understand how CPI is not a joke with respect to how it’s used to say “this is normal.”

Everything I’m interested in spending money on, new hires for my company, real estate, cars, computer hardware, food, lumber, gas. All of this is coincidentally more expensive sometimes by a factor of more than 2x from two years ago? Nope, not buying it.

But no one is “selling” you anything here. CPI is just data with a very public methodology. Some things go up, others go down. The Fed uses it as one input in decision making to manage inflation over long time horizons.

You can look at what is measured in CPI and how it’s measured. You can have a conversation about whether that’s the most precise way to measure inflation etc. but just waving your hands about your “lived experience” and making allusions to a conspiratorial “they” doesn’t pass for analysis.

Show your work. What is the motive here for the “Fed and U.S. government are rigging our economic system to backdoor tax the middle class while gaslighting all of us into thinking that this is normal”? How do they do it? What’s in it for them? I’m genuinely curious how you get there from looking at CPI.

CPI is the equivalent of the FBI investigating their own actions and finding no wrongdoing. You can wrap a turd up in gold foil and have it certified by a panel of experts, but it’s still shit.

> What is the motive [...] What’s in it for them?

There's a huge monetary incentive, since things like social security payments (the largest item in the federal budget) are inflation indexed. The Boskin Report [1], which argued that inflation was overstated by 1.1%, estimated that their proposed "corrections" would reduce the deficit by $202 billion by 2008.

The whole thing was rather suspicious in my opinion. The report was based on some questionable interpretations of inflation, and it seemed like the Senate appointed particular members in order to get the outcome they wanted, as Thomas Palley argued [2]:

> The commission is itself a delicious example of such bias: All its members were on record prior to the establishment of the commission as believing the CPI to be overstated. At the same time, the commission took no evidence from such well-known economists as Janet Norwood, a former head of the Bureau of Labor Statistics, and Dean Baker, of the Economic Policy Institute, who believe that the CPI provides a reasonable reading of inflation. In effect, the commission took account of all the evidence of overstatement of inflation by the CPI and downplayed the evidence of potential understatement.

[1] https://www.ssa.gov/history/reports/boskinrpt.html

[2] https://www.theatlantic.com/magazine/archive/1997/04/how-to-...

But iPads are faster!

https://www.reuters.com/article/us-usa-fed-dudley-ipad-idUST...

It's a nice "gotcha" moment, but if you look at the CPI breakdowns[1], iPads aren't the reason why inflation is low.

[1] https://www.bls.gov/news.release/cpi.t02.htm

> real estate

Well, yeah. Nobody is trying to hide this fact.

> gas

https://www.gasbuddy.com/charts

> food

Check the BLS data. In the short term, some food is def up, but less than 5%

Over the long term, it's down.

> cars

Down over the long term. Up in the last year.

> computer hardware

Yeah new hardware is gonna be expensive due to that whole chip shortage thing

> lumber

lol yeah all that lumber you're spending your money on

The only thing that's up by a factor of 2x is lumber, and I'm gonna bet that's only on your list because of all the headlines it's making.

It's a fallacy to hand wave anecdotal evidence.

Anecdotally I’m spending less than I was last year in every category.

Somehow everyone seems has this experience, rents have continued to climb at a high rate for the last decade, and they manage to downplay this in statistics.

The "basket of goods" they use to measure inflation is purposefully gamed to under represent purchases everyone makes weekly that are "volatile". But good news is that DVD players are cheaper than ever so inflation must be low!

Fuel, which isn't purchased as often since the pandemic started has maintained its CPI weighting and has gone down dramatically however.

Inflation is one of those things where if it's clearly stated as being extremely high can risk a lot of followon effects as everyone divests themselves of any direct monetary assets.

Care to cite evidence of this conspiracy?

Or maybe everyone who has been having this experience is posting about it, because otherwise there's nothing to post about.

this.

presentation bias is everywhere.

This is an obvious and simple explanation yes but I think it’s only part of the story. CPI numbers are brought down by considering a lot of non-essential goods while almost everything you actually need — food, shelter, healthcare in particular has gotten considerably more expensive. So the sentiment is exacerbated by the fact that nobody really cares whether TVs etc are getting cheaper in their day to day lives.

Given that there's been a massive shift in allocation of spending due to the pandemic I would take any claims like this with a now expensive grain of salt. Let's not forget at the start of the pandemic toilet paper was going for $1 a roll.

In 2011, my rent was $1,420 a month. In 2021 my rent is $1,610 a month. According to the published inflation numbers my rent has gone down because it should be $1,672 if accounting for inflation.

I don't live in California-- maybe things are different there-- but I don't buy the conspiracy theories about inflation numbers.

In 2009 my rent was $550 in Pittsburgh. I just looked and today the same unit is going for $980, a 78% increase. According to published inflation numbers that should be a 23.5% increase to $679 today. So at least from our two examples we can see the effect is not evenly distributed.

edit: incidentally, in 2009 the minimum wage was $7.25, and my rent would have been 47% of my gross income. Today the minimum wage is still $7.25 and if I had stayed at the same apartment at the same wage, my rent would be 84% of my gross income.

On average rents have doubled since 2006, but yes this varies from place to place. Not just in big cities though, it’s been in both cities & rural areas around me in Ohio as an example.

On the other hand, anyone who's been trying to rent an apartment in a metro area for the last 12 months also knows that rent has dropped ~15-20%.

I can't speak for you, but I pay a lot more for rent, than I do for groceries.

That only happened if you managed to sign the lease during the dip. The rents started to appreciably drop last summer, this means that over the past 12 months only people whose leases expired between summer and now were able to lock in the savings. I, for example, was not that lucky. So I'm just not going to have a massive rent increase.

That's a period of like 10+ months. Peak rental season is usually in the summer too. Most people who were on 12 month leases would have had an opportunity to sign a new lease in this time. Even if they didn't, it's not like rents have recovered, you can still get far cheaper rent in many areas and will likely continue to be able to do for the next few months at least.

Not in Montreal. Rents and house prices are up up to 50% since COVID started.

Where I live in the exurbs, rents are climbing and inventory is extremely low. But I wonder if that's going to change once the eviction moratoriums expire. People who can't pay a year's worth of deferred rent are going to have to move in with someone else as having a recent eviction makes it nearly impossible to rent again. That's going to mean less demand for a growing supply of rentals.

I'm going to believe the massive study over your single data point

Both can be correct, and likely are.

HN doesn't live in "America" - we live in a bunch of different cities with different economies.

This is actually a key problem with the Fed's tools -- they're national in scale. Inflation can be low in Acron, OH, but very high in San Francisco.

What a surprise that this comment thread is full of software developers in HCOL areas anecdotally seeing prices rise faster than the national average!

Most of the population lives in the urban high cost of living areas.

The top 300 biggest cities in the US are home to only ~20% of the population.

> The top 300 biggest cities in the US are home to only ~20% of the population.

I think it's actually 20% for the top 100 cities; but a total of 62.5% of the population actually live in cities (82% live in urban areas - due to increase to 89% by 2050)

https://www.nationalpopularvote.com/100-biggest-cities-have-...

Here's some interesting info on how they collect data: https://www.bls.gov/opub/hom/cpi/design.htm

No idea why this is downvoted. Our groceries and staple household items have increased at least 10% over the last year.

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