Comment by verteu | Hacker News Reader

Comment by verteu | Hacker News Reader

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Is this economic pessimism supported by data?

Online, I see lots of complaints about rent burden, but it barely increased from 25%->27% from 2001-2024 [a].

Median wages are growing faster than inflation, too. The easiest numbers to pull up are Wolfram Alpha's [1]:

CPI (2001-2022): +68% (+2.5%/yr)

Median wage (2001-2022): $27060 -> $46310 (2.6%/yr)

Mean wage (2001-2022): $34020 -> $61900 (2.9%/yr)

Bottom 10% wage (2001-2022): $14070 -> $27340 (3.2%/yr)

I think there was a temporary spike in rent burden [2] [3] which quickly reversed [4].

It generated lots of headlines, but nobody paid attention to the decline.

[a] https://cre.moodysanalytics.com//app/uploads/2024/02/image-1... , from [4]

[1] eg: https://www.wolframalpha.com/input?i=median+US+wage+2022

[2] https://www.moodysanalytics.com/about-us/press-releases/2023...

[3] https://fred.stlouisfed.org/series/DP04ACS006037

[4] https://cre.moodysanalytics.com/insights/market-insights/q4-...

EDIT: A commenter below led me to the following stat: 32% of American adults can't afford a $500 expense with their savings (Table 12): https://www.federalreserve.gov/publications/2023-economic-we...

Good info. Yeah I think a lot of the grief centers on housing costs and, most acutely, consumer inflation.

What's mysterious about the inflation to me is that there's very little discussion exploring an inflation rationale that links it to record corporate profits and a record raging bull market.

That lack of emphasis reads political to me. The people being most harmed by increased consumer prices are generally not the ones who are most benefiting from them.

"When workers get pay increases, they think it's their own work; when they see inflation, they think that's bad policy" - Dean Baker

I think both wages & prices around the time of covid, and it's easy to manufacture dissent over this (due to the above quote).

I'm not referring to policy as much as actual economic activity and firm behavior, including pricing.

It's true that prices and wages increased through COVID, but I don't believe the full explanation is quite so neat. For instance, this article lays out some additional details.[0]

Essentially, commodity pricing and other production inputs have stabilized, however, companies are charging their customers higher prices and enhancing their margins.

This is yielding record corporate profits and helping to fuel the bull market while consumers end up eating the resulting inflation. Yet, there's relatively little discussion about it when the issue of inflation is raised.

[0] https://archive.is/ZTkw3

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