The USA Inflation Rate by Truflation Is 4.21%
truflation.com
truflation.com
I gave up before I could find details about their sources. Too many Blockchain Buzzwords to invest much time into reading more.
> we are sourcing from as many daily price providers as we can while others updates once a week or once a month.
No information about who the price providers are, and the coverage these higher frequency data streams provide v. what they use traditional BLS inflation sources for.
> We propose using the world’s vast data access, blockchain technology, and the enormous potential of decentralized systems and organizations to provide a developer solution to the inflation problem.
> Truflation is the first true US inflation index based on the independent data sources and metrics created by developers and crypto investors for developers and the crypto community.
> The US Truflation Index is available online, on-chain, via a Chainlink Oracle API for all the crypto products and projects that want to correct for the actual US inflation. The Truflation feed also provides daily updates as opposed to the monthly metrics reported by the US government. Truflation also allows transparent access to our underlying data and calculation methods.
It would be nice to get access to a small sample of the data points they're pulling, it's not immediately clear to me from their methodology what the data looks like or where the data is from.
https://whitepaper.truflation.com/background/what-is-truflat...
I... if I had to name groups of people I would not trust to build data sources and metrics for broad economic measures, “developers” and “crypto investors” would both be very close to the top.
But people in crypto tend to think they understand economics better than economists, so I think that the criticism of the article’s methodology is fair
For example, the restaurant who still offer you the same price for the meal but now clean the toilets and cutlery 80% less frequently than they did two years ago (to save on dishwasher energy cost, or recruiting 20% less cleaner hours). Or the school that charges you the same fee although they have quietly increased the student to teacher ratio.
I am wondering what is the current stat of the art to capture such hidden inflation, I guess you can track reviews to see if there is an uptick in negative reviews but then this is hard to translate quantitatively into how much it is contributing to inflation.
The Fed's measure of inflation is supposed to include this.
Also, it's not active for all categories. In the restaurant example from the parent post, it wouldn't be counted because that category has no quality adjustment applied.
I passed on it, then the pandemic hit.
In 2021 I decided I wanted to get the table and it was permanently out of stock because Pandemic, but still $199 on the site.
Because of its unavailability I ended up polling the site periodically, noting the price. Consequently this object became one of my reference points for pricing throughout the pandemic. As the price steadily rose, friends I'd mention it to would call out the lumber industry problems as why it's going up.
Well, as far as I can tell we're well past those lumber issues, and the price has only gone up further since...
10/2021: $199
11/2021: $229
4/2022: $259
6/2022: $279
10/2022: $299
2/2023: $319
3/2023: $349
[0] https://www.ikea.com/us/en/p/norden-gateleg-table-birch-9042...
People were staying home more and spending less on going out. Budgets went toward improving homes.
Furniture was out of stock everywhere. Companies raised prices but demand continued, so they kept raising.
... "one of" ...
"The IKEA Norden gateleg table has been one of IKEA’s best sellers for a while, and it’s for good reason." [0]
I fail to see how this is a "quirky piece of furniture". Judging by the frequency they appear on CL and how many of my personal contacts either had one or knew family/friends having one, I can believe the above quote regarding its best-seller status. They're quite common.
Now with the first year passed, we compare today’s prices to after war prices a year ago, which were already high.
I’m expecting the rate go down further the next months.
EDIT: of course I’m not suggesting inflation started on the day bullets started flying. Things were heating up before with Russia slowing down exports strategically well ahead of time and tensions were on the rise for some time.
Inflation was 7.5% and trending upwards a month before the invasion, so your supposition is incorrect [0].
[0] https://www.bls.gov/regions/mid-atlantic/data/consumerpricei...
How is that going to make inflation go down?
You ain't seen nothing yet. Hyperinflation is coming.
If we can weather these last few blips, we might be back to smooth sailing soon. The economy is buzzing along by all other measures.
If you want to predict Fed movements, your best bet is probably the Core PCE:
https://www.bea.gov/data/personal-consumption-expenditures-p...
Truflation says the housing data the fed uses is 9 months behind them.
(FWIW, the Fed does look at a variety of data sources, and the lag in housing numbers is well known to them. However, y'know who also uses lagging data when setting prices? Real estate agents. Comps usually go back a year or so, and anything sold in that time period is fair game. Y'know who else? Employees, when figuring out how much of an annual raise is fair. And so the Fed's decision-making process isn't strictly incorrect; if they don't hold rates high enough to actually see the inflation numbers go down, then the firms who set prices also aren't going to see the numbers go down when deciding how much to ask for.)
Even the official rate is vastly underestimated. 4% is a joke.
They know that 6% is too high, so they'll keep trying to push inflation down. They'd do roughly the same if it were 4%; the margins of error are too large to distinguish.
If the number were 1% that would raise eyebrows, and you'd wonder if one metric or the other was a failure. Same if the number were 15%.
But no economist is worrying too much about somebody else going "... but it's really 4%". Especially if they don't have a track record for that number.
So they don't put too much stress on that 2% number. If the number were at 1.9% or 2.1%, they'd assume it's all in the margin of error. If it gets below 1% or above 4% for a while, they apply some tools in the direction of 2%, but not trying to overshoot.
[1] https://www.stlouisfed.org/open-vault/2020/january/what-is-p...
Here is a real alternative - John William's shadow stats. He simply measures inflation as the government used to in the 80s and 70s, and surprise surprise its more like 10% or 14% - no phony "Owner's equivalent rent".
Shadow stats is comically bad economics.
I think the FED and our banking regulations are the true "bad economics" and if you trust that, just go ahead and leave your deposits in the bank or invest in 4% yielding bonds : P
I don’t understand how anyone who knows about basic compound growth can take this seriously.
10% annual inflation from 1970 would mean prices have increased by 150X since 1970.
That would mean houses would have cost a couple thousand dollars and a dozen eggs would have been about four cents.
And that’s only using the lower 10% estimate, not the higher 14% estimate. It’s obviously not even close to reality.
It’s a quack website that can’t even hold up to the most basic scrutiny.
Well, that is not how the government does it now. It currently uses a metric called "owner's equivalent rent". Where instead they call up people who own there houses and ask them how much they would rent it for. It is essentially a survey instead of hard data. This has the effect of hugely underestimating the value of housing - and thats just housing!
Lets talk about measuring food prices, well according to the US government you can have "substitutions". If you think measuring the price of steak is as easy as comparing the number between the years you'd be wrong again, because what they currently do is say "well people are really buying ground beef instead of steak so well use those prices instead". What's next substituting in dog food?
Thats not even to mention "hedonic adjustments"...
When the government relies on a statistic for policy it stops becoming a reliable statistic because the incentive is just too high to not manipulate the numbers
Except, in fact, it actually is how they do the rent portion of CPI. (Well, its not city rent averages, they do same-unit rent changes and average those.)
> It currently uses a metric called "owner's equivalent rent".
No, OER is used for...OER. Rent is used for rent. They are two separate subcomponents of the housing component of CPI.
More complete description:
https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
I see no purpose for it besides the government liking the C) part...
Remember folks, inflation is "temporary" or, i mean, "transitory", or I mean, yes we have inflation, but its the COVID supply chain, OH oh sorry its Putin's fault. Yes lets stick with that...
The merit of OER is that is a measure of the cost of using owned housing as housing instead of renting it out.
> Why use it if its A) not really what people are paying
It is a measure of what people are paying, as an opportunity cost.
> B) relying on people not in the market to guess what the going rate is
Potentially a legitimate concern.
> C) consistently underestimates actual rent.
Its not trying to measure actual rent and is not consistently below actual rent (which, again, is tracked separately.)
I don't follow - can you help me understand? To me there are two metrics that matter: the price of property, and the price to rent property.
Hypothetical: If 50% of the houses in the US were bought by older folks in the 1970 - 1990 (when housing prices were more propositional to income) and they generally don't plan to sell until 2030 - what does it matter what they would rent at today?
I just don't understand the logic here, and to the fact that they are included in the CPI at all means that the CPI is necessarily skewed when it comes to housing imho
https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
The specific reasons sum up to cause inflation, not the other way round.
"Inflation: The Biggest Scam In The History Of Mankind" https://youtu.be/iFDe5kUUyT0
Is there anything incorrect in that presentation? John William's shadowstats is mentioned.