[farseer]

For the average Joe, inflation is usually the price of milk, bread and eggs going up. America being an agricultural colossus with plenty of farm subsidies mean the price of essentials will not rise. Hence the unique manifestation of inflation in asset prices will not bring masses on the streets unlike most other countries. Coupled this with the fact that other countries are also printing money and are in worse shape ensures there isn't much to worry about yet..

[pstrateman]

The true increase in the cost of living is much higher than the official CPI.

CPI is nearly completely worthless for identifying inflation in the cost of living, which is what actually matters.

[dragonwriter]

> The true increase in the cost of living is much higher than the official CPI.

There's a decent argument that it's slightly higher, especially when you talk about the minimum cost at the low end, because of hedonic adjustments included in the CPI.

There's not, that I've seen, a good argument that it is “much higher”.

> CPI is nearly completely worthless for identifying inflation in the cost of living

This claims is desperately in need of supporting evidence or at least argumentation.

[Supermancho]

https://chapwoodindex.com/

There are resources outside the CPI or individual verticals, to measure inflation.

[throw0101a]

> There are resources outside the CPI or individual verticals, to measure inflation.

No, there are not. CPI is about measuring consumables that one needs to live: food, shelter (either rent or mortgage carrying costs), utilities, clothing, etc. If you want to measure something outside of this basket of goods, then use another word, because "inflation" / CPI is already taken and you're overloading it and causing confusion by conflating different things.

This "index" is garbage. Please see "Inflation Truthers":

> But if we take away the outlier 2020 data points, the average real annual GDP growth from 2010-2019 was 2.3%. The inflation rate in that time averaged roughly 1.8% per year.

> If you’re one of the conspiracy people who believe inflation has actually been running at 5-6% per year, that would assume the economy has been contracting by 1-3% per year over the past 10 years.

> And if you’re a full tinfoil hat person who assumes inflation is actually 10-12% per year, that’s like saying we’ve been in a full-blown depression and the economy has lost 80% of its value.

* https://awealthofcommonsense.com/2021/01/inflation-truthers/

* https://news.ycombinator.com/item?id=25644580

So if the GDP grew "only" ~2.5%, then any inflation above that (as the 'truthers' claim), would mean were actually in a recession/depression for the last decade… which makes no sense. If inflation is >5% (per the truthers), then the economic growth would have had to been on top of that, for a nominal growth rate of >7%.

Has anyone been claiming a US GDP growth of 7% or more?

[Supermancho]

> No, there are not.

Yes, there are. What a tiresome exchange.

What the CPI represents is rather narrow, which is described right in the CPI reports, along with links to their numbers https://www.bls.gov/news.release/cpi.nr0.htm

Ultimately the faith in the CPI depends on what you want to ignore. The sampling is 29% of the wage earners from the most populated centers. https://www.investopedia.com/articles/07/consumerpriceindex.... Of course it's biased toward consumerism, but that's a huge problem with calculating the cost of anything today. Even with that caveat, is that a 1.8% increase in shelter cost from 2019-2020? That's not realistic.

Like the unemployment rate, these stats have long ago become politicized to the point they are a reflection of what needs to be portrayed. These numbers (CPI, GDP, Unemployment, etc) can and are manually changed by whatever ad-hoc method that is convenient. It's important to have some insight as to what's going on that would result in a huge disconnect, rather than handwave off the "cranks" who must be complete morons because they are "the other side".

> So if the GDP grew "only" ~2.5%, then any inflation above that, would mean were actually in a recession/depression for the last decade

What you consider a recession and I consider a recession are different things. Consumerism skyrocketed and domestic manufacturing cratered. Commercial property has also bottomed out. The velocity of money has slowed ~2012 until we're at the height of efficiency in velocity...which is molasses. Money doesn't move on anything that isn't land, because that's the lowest risk at this time and middle markets/individuals are failing or barely subsiding.

> If inflation is >5% (per the truthers), then the economic growth would have had to been on top of that, for a nominal growth rate of >7%.

Economic growth is about debt growth, like it or not. All the new debt is in real estate (stocks and bonds for companies and individuals), which is where the inflation is living. see property prices in Los Angeles growing at about 7% year over year, same as a bag of cheetos and wholesale soda costs...but the monopolies are still duking out loss leading with $1 fountain sodas so nobody cares.

Property is immune to the deflation (cannot be outsourced, et al) and the only debt that banks are interested in, on a risk basis. Due to the ungodly improvements in efficiency (and outsourcing) most goods have been subject to massive deflation and have made the functional monopolies (and new tech) look super valuable, driving the tech stock frenzy. Unfortunately, those efficiencies have been maxxed out, more or less. You won't be seeing TVs drop from 700 to 70 (like they did from 7k to 700), the will go back up along with the food prices that have been slowly rising. This rise has been balanced out by the fantastically low prices of goods (eg 40oz Bag of Cheetos have risen just under 10% year over year) or loss leaders duking it out ($1 sodas from Hardees/McDs). Too bad your fast food is still routinely over 15$ a person.

I don't think it's prudent to throw my hands up and say "I just don't understand why things are the way they are, when I have a single number to tell me everything is ok." The CPI is a garbage index. There are reasons why the markets are the way they are and it's not hard to see, regardless of what the US gov wants to say about it.

[SpicyLemonZest]

This index doesn't pass the sniff test. 10% annual inflation would mean that someone making $100k today has the same standard of living as someone making $40k in 2010.