October had the biggest U.S. inflation surge in more than 30 years
cnbc.com
cnbc.com
“In the quarter to August used cars, hotel rooms and airfares made up less than 5% of America’s consumer-price index, but together accounted for the majority of overall inflation”
If we’re having inflation due to a tiny number of goods having large price spikes, it might be too early to predict disaster
https://www.economist.com/graphic-detail/2021/11/06/a-handfu...
For example, lumber is still priced fairly high, but far far down from its peak level. And if this podcast is to be believed (and I think it is), mere lack of metal trusses for home building is holding back a lot of builders from continuing with their projects, meaning a ton of lumber is being held in places that it's not usually held, which will lead to further bull whip price swings:
https://www.bloomberg.com/news/articles/2021-11-08/stinson-d...
Inflation due to large monetary stimulus may appear through a bullwhip affect as demand eventually stresses fixed-capacity capital intensive industries. Once these industries are strained higher costs may radiate outwards.
It is still less of a school to the economy than the beginning of the pandemic was. Threading the needle to manage this period has to be extremely difficult for policy makers.
That's when considering "stimulus" as broader than the unconditional (but means-tested) direct payments--colloquially "stimmy checks." Following is from a quick search and to the best of my knowledge; I'm in a high cost of living area and fortunate to have kept a job past the individual cutoff for stimulus checks:
Direct stimulus was $3200 to eligible individuals across three checks. Some amount of that was banked for dependents too.
Increased refundable child tax credit was increased from $2000 to either $3000 or $3600 per child per year and the Democrats are trying to persist that in the build back better act.
The US also did increased unemployment -- $300 a week in extended unemployment benefits. Which totals $15,600 a year on top of existing amounts. The first $10k in unemployment was made tax-free. I've heard e.g. Canada had a high percentage of salary backed by the government in unemployment, however there was a total dollar cap that was fairly low.
US had PPP loans that lefties (disclaimer: I'm one) on social media (disclaimer: I'm not) complained about going to businesses, but very likely let some business keep people on the payroll in the first place as intended.
Mortgage forbearance, eviction moratoriums.
Freezing of payments and interest accrual on student loans that is still going on, and when (if?) it restarts will have stopped the accrual of interest for about two years.
What evidence is there that it will radiate outwards at a rate significantly above the Fed’s target for an extended period of time?
A single advancement in worker automation could easily provide enough productivity gains to offset wage growth. A single plant disease or new political treaty could massively effect food and or energy costs. The system is chaotic.
Offhand however, the top capital constrained industries that I can think of (in rough order) include.
1. Semi 2. Housing 3. Automotive/heavy manufacturing 4. Energy
Which are all experiencing shortages/rapid price increases. If the hypothesis holds we would see price increases in other fields which depend on the above. If the supply disruption/demand disruption hypothesis holds then we should see a normalization of prices in the above industries.
who's claiming that?
For a young family that is interested in buying a house, food/gas does not even register.
I certainly don't look at my heating bill every month.
But inflation is devastating to the working poor. Funny that it's so easily brushed aside by those who claim to advocate for them.
Consumer perception of the economy is roughly equivalent to 2009 numbers now, in a recent study. The public by and large thinks the economy is terrible, primarily due to the inflationary pressures.
Consider that unemployment affects the marginal job seeker, but inflation affects everybody. From a purely political lens, vying for higher employment at the expense of inflation, once past a reasonable threshold, seems like a losing move.
Source? Searching for "Consumer perception of the economy" leads me to consumer confidence index, which seems to be significantly higher than in 2009.
https://www.conference-board.org/data/consumerconfidence.cfm
If it's demand-side, then their wages should rise up together with inflation so they don't win or lose (except for whatever savings they have and whatever time it takes for wages to adjust).
So wages are rising, but slower than inflation, e.g. people getting poorer. And of course, many stay in the same job and don't get a raise, or get a paltry raise.
Many seniors living off of fixed income investments which are yielding lower than ever. And so on...
Workers are only better off if wage is strongly above inflation. I do see people cheering on wage gains, even though they've been persistently below inflation, which is a bit of a headscratcher.
It seems the public perception is finally starting to bubble up though, rather than the headline narratives.
https://www.nytimes.com/2021/11/06/upshot/inflation-psycholo...
I'm not arguing that inflation is good for poor people, just that "Inflation = Bad" is reductionist. There are winners and losers with inflation, and the lives of most individuals are affected in nuanced ways, both positively and negatively.
By galloping inflation, I hope that means wage increases. Inflation is neither bad nor good, until it changes people's behavior. Even then, it's not strictly bad until it spirals out of control. Until then, inflation is in many ways a good thing: higher wages, higher revenues, transferring money from creditors to debtors. These are things many people want more of.
I also know people buying cars at or close to MSRP that would have gotten them for much less before. So the sticker prices might be the same, but actual prices paid are going up.
Not predicting disaster, but what's going on is very unusual and no one can predict how or when it will shake out.
In the Netherlands it's about 20% YoY. And this is starting to become true all throughout the country even though it started in urban areas. I really feel bad for people who aren't homeowners yet, because becoming one right now is getting damn near impossible.
If I were middle class and saving for a home, I think I would be angry to the point of revolution and violence right now. There are people who have worked like crazy their whole lives and they just had their hopes and dreams set on fire by runaway money creation and the resulting inflation.
Would they be happier under a repeat of 2008 or 1928 instead?
Of course if the hypothetical aspiring homeowner with excellent market timing lost their job the point would be moot, but if their income stayed the same and they put 20,000 down their monthly payments would have gone from $1,302 to $994.
[1]http://www.fedprimerate.com/new_home_sales_price_history.htm
[2]https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Reports-...
[3]https://www.marketwatch.com/story/us-mortgage-rates-hit-2007...
Is it advantageous to a new graduate who will see no work, and maybe a decade of depressed wages (which, between loans and compounding interest in savings, is devastating to their future prospects)?
Is it advantageous to a new homeowner that just lost their job?
Some people got burnt by that flood of money that stabilized the economy. Some people benefited. Some people avoided harm. Focusing on the first group without regard for the latter is missing a large part of the picture - which was that the economy as a whole remained more or less stable through this crisis.
Whether that's fair vs protecting those who already have homes and other assets is I suppose a different question. I agree things have remained fairly stable so far as the result of printing but I suspect we likely haven't felt it's effects yet and the stabilization will continue well into the next year, though the future is always fickle to predict.
Right now we're fueling a tsunami of moral hazard which will eventually bite us in the ass anyway. We're just prolonging the inevitable and making the crash even worse when it finally appears.
As for punting the problem back, no, that does not follow as a required consequence of QE.
Social media adds gasoline to the fire, but that fire was already burning, in part due to the middle class getting wiped out.
The ends are expanding and middle is disappearing.
I think this is part of the rampant speculation on crypto and the like - $1,000 isn't really going to do me that much good, but if I hit a 100x I could be a homeowner.
I have never heard of this type of rental agreement. Your contract says you can stay indefinitely if you pay $250 per month extra over the expired contract’s rent?
I suppose the downside is they could give me the boot with 30 days notice. FWIW I've contacted them several times to try and just sign a lease but the property has been bought out and had it's management office staff swapped out a few times so the whole thing is a mess.
[1]https://www.city-data.com/forum/renting/1261828-fixed-term-l...
[1] https://www.bls.gov/news.release/pdf/cpi.pdf, Table 1
https://www.apartmentlist.com/research/national-rent-data
OER is a hugely flawed metric that is somewhat designed to suppress true cost increases. E.g. they include rent controlled units in the figure. Small portion, but clearly that's not a useful lens to analyze through.
Many other methodological flaws that can be enumerated
(I'm not in NYC, but also in that category: I've rented my place for years, and my rent has increased 0.0% this year.)
The much more useful number is, what is the cost of living for somebody plopped into the economy. Because eventually almost everybody ends up moving and bearing that cost.
Should our price data be forward looking or backwards looking? Obviously from a policy perspective having forward looking pricing data is much more useful and relevant.
Including rent controlled units and existing leases is a methodological flaw of OER. You're right though, if you game the measurement and design the methodology just right, you can produce lower numbers.
If the CPI formula were unchanged from the 70s, we would have roughly equivalent inflation numbers now that we had then.
The Fed is meant to head off inflationary pressures. If they take a full year to materialize in the data, that's a flawed metric IMO. A 20% market rate rent increase will almost by definition feed into a 20% rent increase for everybody in the longer run.
The market rate rent will dictate rents for all over the longer run. Yes, maybe 10% of the population got a good deal on their renewal or whatever. Including that information is not useful or helpful from a policy perspective.
At the very least, they should produce two figures. Market rate CPI and existing tenant CPI.
If those labor costs drive the price of goods and services beyond some psychological tipping point, you then have more demands for higher wages, at least until those start to get rejected and we find a new zone of relative pricing stability.
I'm not arguing for hyperinflation or anything, but I don't think we'll see the price increases of the last year go away. If you're like me and had your assets in cash, well, a good percentage of that buying power is gone and not coming back.
https://finance.yahoo.com/news/consumer-price-index-shows-fo...
On the other hand fuel prices are up considerably too.
I’d recommend your local dealership or Walmart in the future. Oil changes might be the only thing dealerships typically have reasonable prices for.
If your prices went up by $60 this year, it wasnt because the oil is more expensive.
https://www.apartmentlist.com/research/national-rent-data
There's a huge lag to reflect certain data in the headline numbers. Owners equivalent rent measurement technique, only sampling 1/6 of housing stock per month and so on lead to about a 12 month lag in cpi.
Rents alone will fuel high baseline inflation for at least a year or two, once the value starts getting priced in.
You are right that we'll likely see some decline from cars normalizing, but not enough to offset rents and more broad based pressures. Baseline inflation will likely remain well above the Feds 2% target
Doesn't square 17% and 3%, but it could definitely mean the lagging CPI rent growth we see over the coming year is more like 9 or 10%.
If market rate of new units is 20% higher, almost by definition you'll see 20% higher rents for all in the long run.
Why should we use backward looking methodology in computing the CPI? It's an extremely flawed way to analyze the state of the market. Forward looking metrics are more useful to policy makers.
The methodology for OER and rent analysis in the CPI acts to suppress true price increases. Though those price increases eventually materialize as people renew their leases, move etc. It comes with a year or longer lag though.
The Fed drives their policy based on this data. Why should the data have a one year lag and potentially put them behind the curve?
If we used the same CPI formula as in the 70s, we would be seeing similar CPI numbers too.
Well, yes, but that's not very meaningful without knowing over what time period you'll see that increase.
> Why should we use backward looking methodology in computing the CPI?
I mean that's literally just what CPI is. You're welcome to use leading indicators if you want, and economists certainly do. One slight problem with predicting the future is we don't know what will happen then.
> If we used the same CPI formula as in the 70s, we would be seeing similar CPI numbers too.
This is completely unsupported by the data. Yes, the switch to geometric mean effectively deflated CPI when compared to measures taken using the previous formula, but not remotely close to a level that would bump our current ~6% rate into the high teens.
Not OER, but actual home prices.
But even if CPI reflected rents fully, today, we would be at similar numbers.
And the Fed primarily looks at core PCE which is based on the backward looking CPI data. It's very obvious from a policy perspective, they should be considering market rate and not existing tenant rates for forecasting forward inflation.
Yes, the Fed forecasts the backward looking CPI, but their forecasts were also so far off this year, I wouldn't put any stock into them. I believe they predicted 3% inflation for 2021 earlier this year.
Sorry, I thought you were making the geometric mean argument. Yeah that would definitely add significantly for this year in particular. Home price inflation is about 20%, and is replacing housing inflation at maybe 3% in the CPI calc. Owner occupiers are ~64% of the housing market which contributes around ~33% to CPI. So including that would add (.2 - .03) x .33 x .64 = .036 so 3.6% to CPI.
So around 10%. Comparable to most of the 70s, but not the high-teens emergency points.
And yes the Fed doesn't always accurately predict inflation, but in the long run no one else does either (and one could make billions doing so, it's not like no one's trying).
Except this is not comparable to most of the 70s at all.
Household leverage and disposable income change how serviceable debt is at different rates.
The numbers I saw puts a 2021 mortgage rate of 3% at an equivalent benchmark rate "in your pocketbook feels" as a 6% rate in pre gfc 2007.
Are you sure 10% doesn't warrant the same emergency as the high-teens of the 70s?
I’m also seeing my health plan options are a lot worse. High deductibles me co insurance with prices staying the same.
On the plus side all the restaurants around us are terrible now due to lack of workers, so we cook at home much more.
I take issue with this. Hotel rooms and airfare can often be forgone for the average American. New (or used) cars to a lesser extent. However we are seeing increases in prices of ag commodities increasing dramatically. On a year-on-year basis, prices were up 32.8% in September[1]. Oil prices are at a three year high[2]. Not to mention soaring housing costs. It may indeed be to early to predict disaster, but things are not as good as your comment seems to suggest.
[1] https://www.reuters.com/business/world-food-prices-hit-10-ye...
[2] https://www.reuters.com/business/energy/oil-prices-rise-tigh...
...measures home ownership (asset) prices, CPI housing measures housing consumption (rent or imputed rent) prices.
This is the thing to watch. Inflation beaten by wage increases is sustainable. Inflation not beaten by wage increases ends with higher prices being rejected and a recession at least.
Given the hyper-inflated nature of just about every asset, including housing, far worse is on deck.
> Escalating inflation could cause the Fed to tighten policy more quickly than it has indicated. The central bank has indicated that it will within the next few weeks start reducing the amount of bonds it buys each month, though officials have indicated that interest rate hikes are still off in the future.
The Fed has been on the transitory bandwagon since the beginning of this mess. The idea that it would act to cause a recession by either tapering or raising rates is hard to believe right now. They will talk the tough talk for now. But they will not walk the tough walk.
Why not? Consider the positions at the Fed that have been vacated. Consider that Powell's term ends soon. There was already a meeting at the White House with Powell and one of his most likely successors. The last thing the administration will tolerate is a recession and asset price collapse at this point.
Also consider the effect of raising interest rates on the precarious US fiscal position. The entire Build Back Better initiative is based on the availability of low interest rates. Raising them means even less money to spend into the economy, not to mention resistance within the Democratic Party.
Bottom line: something is going to break. There will be massive resistance to this idea for a time. Rates will not rise. QE will not be scaled back. Asset and CPI inflation will shoot higher. Consumer prices will be rejected and to stave off the inevitable collapse, still more government transfers ("helicopter money") will be injected.
The result will be something common in third-world countries which follow this playbook with boring regularity, but quite new to the US. But the IMF won't be able to fix this.
Price rises without wage increases is a redistribution either away from wages towards profit, or more likely towards those workers in demand and away from those that are not. Or 'semi-inflation' as it is known.
And playing around with interest rates will affect neither issue, because, as it should be clear after more than a decade, interest rates aren't actually that effective a policy tool.
The economic rebalancing has to play out so that the new normal can re-establish.
Inflation refers only to the decrease in value of money, it has nothing to do with wages.
"In economics, inflation refers to a general progressive increase in prices of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduction in the purchasing power of money."
https://en.wikipedia.org/wiki/Inflation
It says "reduction in the purchasing power of money", not "people can now buy less stuff for their salary".
Inflation means you can buy less for the same amount of money, but how much money people earn is a separate matter.
An economic inflation is when wages and prices go up together so nothing much changes other than numbers.
If people can buy less stuff with their wages that's a redistribution away from the wage share and towards the profit share.
Guess which share pays people to write the definitions on Wikipedia?
I have also worked for many financial institutions over past 20 years including banks, brokerage houses and insurance companies. Currently for Citi Group as a tech lead for one of its risk systems. My work requires me to understand what inflation is because it has very deep impact on everything we do.
Here you have other reputable source: https://www.investopedia.com/terms/i/inflation.asp
"Inflation is the decline of purchasing power of a given currency over time."
That'll be your problem. Any training in economics or financial institutions leads to a skewed view of how the world actually works.
You don't understand what inflation is. You understand what financial institutions want to consider inflation to be because it affects the returns on the debt instruments.
For everybody else in the economy that isn't a problem. In fact it is of benefit to them since it redistributes away from financial institutions towards actual people doing stuff.
Inflation is more than just a narrow view of price changes.
"When a further increase in the quantity of effective demand produces no further increase in output and entirely spends itself on an increase in the cost-unit fully proportionate to the increase in effective demand, we have reached a condition which might be appropriately designated as one of true inflation. Up to this point the effect of monetary expansion is entirely a question of degree, and there is no previous point at which we can draw a definite line and declare that conditions of inflation have set in. Every previous increase in the quantity of money is likely, in so far as it increases effective demand, to spend itself partly in increasing the cost-unit and partly in increasing output."
The General Theory of Employment, Interest, and Money; John Maynard Keynes' Ch 21, V
Since the interest rates work by encouraging investment (usually long term), it doesn't look like interest rate changes will have any impact on inflation at least in the short term, since any investments in the labor market will take years to show results.
So the trillions printed out of thin air have nothing to do with the inflation currently experienced?
I do agree that asset price inflation has been a real thing, but if it's just money printing, then why didn't we see broad based inflation from 2008 onwards? (Serious question).
Monetary can't cause inflation since velocity of money drops. Fiscal can)
Also the overall consumption basket suddenly flipping from 60% services to 60% goods on a dime in April 2020)
Interest rate setting is an artificial market intervention that suppresses market prices by giving people a 'free money' alternative paid for by taxpayers.
As long as you are a bank of course.
It's offset by taxes collected and people saving in excess of borrowing (net financial savings).
If you want trillions in savings you have to have trillions in debt because the accounting needs to sum up to zero
Interest rates changes have nothing to do with investment.
Nobody who has ever risked their own money on a venture would ever say that a 0.1% change in the cost of liquidity changes the investment case.
The estimate error on the sales projections swamps that by several orders of magnitude.
It really doesn't matter what they will "tolerate." They do not have the power to stop it if it's coming, just like they don't have the power to stop the surge in inflation. The current economic situation was set in motion by policy decisions made months and over a year ago (as far back as April 2020), as well as the worst of the pandemic, that we are still feeling the effects of.
...which they undid, by adding a constant number?
>Responding to prior criticisms made by economist James Hamilton, John Williams explained in a private phone call that Shadowstats does not actually recalculate BLS data, rather, the Shadowstats CPI merely adds a constant to the officially reported numbers.[25]
>I’m not going back and recalculating the CPI. All I’m doing is going back to the government’s estimates of what the effect would be and using that as an add factor to the reported statistics.
On top of that, they have their methodology described on their website[1] and the charts match that.
Here is another random quote from Wikipedia[2]:
"Wikipedia is not a reliable source for citations elsewhere on Wikipedia. Because it can be edited by anyone at any time, any information it contains at a particular time could be vandalism, a work in progress, or just plain wrong"
1. http://www.shadowstats.com/article/no-438-public-comment-on-...
2. https://en.wikipedia.org/wiki/Wikipedia:Wikipedia_is_not_a_r...
The "random person" is a Professor of Economics at the University of California, San Diego.
The "another person" is the owner of the site.
>On top of that, they have their methodology described on their website[1] and the charts match that.
So are you conceding that it's a constant number being added or not? It sure looks that way according to one of the tables in the page you linked. The "Cumulative Annual Inflation Shortfall" has been ~5.1% for more than a decade. Eyeballing the more recent figures (raw figures are paywalled) seems to confirm this as well.
Beside, after having seen the table you should know very well that you're wrong and have some decency.
https://www.bogleheads.org/forum/viewtopic.php?p=1025266#p10...
I am not reading a phpBB called bogleheads.com, could you please provide some actual arguments to your claim?
1. https://www.reuters.com/business/euro-zone-housing-cost-may-....
If your argument is that the calculation of CPI has changed, that is not controversial. If it is the information on Shadowstats about how it has changed is real, you may want to read the link I provided.
Inflation is not likely to take 12 years to show up. Markets and people are not that slow or dumb.
https://thehill.com/business-a-lobbying/576456-more-than-100... (edit: better source)
The nursing union's own ask is +4% per year, and even that would have been real-negative over the past 12 months (according to OP's +6.2% CPI figure).
These trillion dollar packages put forth by politicians probably aren’t helping either.
Don't be like Argentina, keep a healthy economy.
Really, I don't understand how in this site, where so many intelligent people participate, there are so many comments about trying to disregard the link between inflation and money supply.
"inflation is the goverment printing (inflating) currency to the market in order fund it's agenda by stealing your savings"
You are summarizing a policy theory called "monetarism" and presenting it as the consensus theory that is only now being departed from. This is inaccurate.
There is still plenty of time to opt out of government fiat money. Get off zero or HFSP.
What's a plausible, non-doomsday scenario in which things turn bad; what does it look like?
On the other hand I can't help but wonder if exponential population growth is now starting to influence things in a way we haven't seen before.
I remember the analogy they used to explain exponential growth in middle school - most have heard something similar - where 1 bacteria is in a jar at 11am, and it's doubling in quantity every minute and will fill up the jar by noon. Students are asked to guess when the jar is half full, and most believe it would be around 11:30. They're shocked to discover that it hits the halfway point at 11:59, and by then it's too late to fix.
Roughly, it took from the time of Columbus arriving to the new world 'till the Civil War to go from a population of a few million Europeans to 30M, and we had a whole continent to expand and extract resources.
We'll increase more than that in just the next 10 years.
What was normal for even lower class Americans historically - single family home, couple kids, fossil-fuel burning car with big, open roads and lots of high-energy consumption may just not be possible anymore for anyone but the wealthy.
And that new normal is being manifested by massively rising home, car, food, etc. costs that won't necessarily cool off, even when the money supply is constrained. There's just too much demand, and not even natural resources to supply it.
Prices go down 40-50%?
Normalizing for household leverage and disposable income, a 3% mortgage in 2021 is close to a 6% mortgage in 2007. Assuming it scales linearly (not sure it does), what you're talking about would mean an equivalent effect of around a 15% rate in 2007 against 2007 prices.
I tried to track down where I saw these slides but couldn't find them, I think it was a morgan stanley presentation looking at comparison rates and leverage normalization to predict how bad different rises in rates would be in terms of how the rate "feels" to the average mortgage holder.
It's one of those times where viewing economics in terms of its steady state behaviors missed out on the true dynamics.
This is from last month's report. Am waiting for it to be updated.
https://econbrowser.com/archives/2021/11/economic-activity-a...
PCE went up too (as nowcast)
Massive spending, government cash handouts, purposeful restrictions on energy commodities.... this seems predictable.
So who gets hurt, and who gains?
Younger earners (who will get pay raises) and equity holders (who hold businesses that will pass along the costs) surf the wave upward.
People on fixed or inelastic incomes get burned.
But the $15 wage won't seem unreasonable shortly.
Additionally if you invest the debt into something that beats your loan’s interest rate then you’ll make money, which is more likely now, since any worthwhile investment would have a rate at least inflation (for example, I-bonds).
(Well, I want car production to be far lower for political reasons, but I'd rather change city structure to accomplish that, not artificially limit car production because of supply chain effects. That's a completer separate issue.)
Additionally, we are flushing out a lot of low-productivity employers, and bringing far more people into the workforce. This is a recipe for a far stronger economy in the future, with happier and wealthier people. I'm optimistic of the course of the future.
We've literally just come off the biggest DEFLATIONARY shock of our lifetimes (the pandemic), of course you're going to see tailwinds the year after unprecidented stimulus and consumer demand.
I recommend people focus on the long term trends rather than looking at outliers to predict the future. You could very well argue wage inflation couteracts these effects, on top of supply chain shortages.
This inflation is real, and isn't just a COVID rebound. It's bad policies leasing to lack of business confidence leading to fear of the future.
If you are posting here, odds are you work in software. Seek out some friends who work in hardware and ask them what they are seeing.
It would have been.
For hardware: Demand goes up, supply goes down, prices go up. Inflation, but not related to monetary policy.
Do you think that free / easy money had anything to do with this?
Where? On what? Prices everywhere stayed flat or increased.
Both short and long term trends are important. Short term trends help us understand current situation that is different from what was happening maybe a year ago. If you only look at long terms you are blind to a lot of important processes.
The fact is understanding the common underlying reason for the price increase is very valuable and that is why we measure short term inflation.
Would you prefer the government wait now and ignored the situation until later when it is going to be more difficult to deal with it? I thought most people usually argue the other way and claim governments are too slow to react.
I agree it's an odd year, but it's fairly clear that the Jan 2020 to Jan 2023 inflation will be materially higher in the US than any other 3 year period since the 70s. I think most likely it will land about 40% increase over that period.
That would indeed be unprecedented, and highly highly unlikely. Remember housing isn't the only factor in CPI calculations.
We're currently seeing ~6% annualized this year. Target goal of ~2-3%.
Prices in popular or economically booming areas were increasing for many years before the pandemic, at a greater rate than whatever national government statistics were claiming.
Nothing about the pandemic was deflationary, money did not become more valuable at any time delta during the pandemic.
It's not the case with inflation, but for example with deflation economists are very scared about prices collapsing , but if that's due to a positive supply shock with quantities sold rising then it's a good news which doesn't warrant any correction.
An example is cars. Sure the price of cars maybe is rising slightly compared to the 70s-80s-90s-00s....but you are buying a totally different animal in terms of metal mass, semiconductors mass and so forth.
The term "car" is just not enough to properly describe a vehicle in 2021, because it's the exact same term used in 1970 but the they are not the same thing.
BLS uses hedonic adjustments to account for this.
The periodic chart doesn't lie. Each and every element on that has a price.
If there is sand in the cogwheel that transforms raw materials into products that is surely of social nature and once you are in that realm, then all predictions and analysis capability are off. You'd be better off throwing darts in a pitch black room
Collecting aggregate sales data has to be done at a different point - more easily done by surveying companies or collecting export/import volume data. This is done too - but only quarterly and only published way after the end of the quarter, rather than prices that are collected monthly and published after 2 weeks.
It is also done by a different agency, the BEA calculate Personal Consumption Expenditure (the volumes consumed) while the BLS collects CPI (price inflation data).
All governments in the world are printing money. When the money supply increases a lot, the purchasing power is deminished for sure