[kpierce]

Thanks for posting the url. You start looking at the numbers on a sub level and its not as shocking. 12 month change.

Gasoline (all types) 42.7% - Huge dip when the pandemic happened now its back to pre covid prices.

Natural gas (piped) 21.1% - Same issue.

Used cars and trucks 31.9% - New cars are being made because of a ship shortage.

Meats, poultry, fish, and eggs 8.0% - a labor problem because its hard to get that many people to work in spaces like that and not get sick.

[landa]

I'm sorry, but this is just wrong. Natural gas prices are higher than I've ever seen them, only comparable to one very cold winter year. This is not just a return to pre-Covid prices, this is due to government policy. Same with crude oil prices. Just look at the five year chart for NG1:

https://www.bloomberg.com/quote/NG1:COM

[ceejayoz]

Zoom the chart out a bit more (https://www.marketwatch.com/investing/future/ng.1). 2009 and 2014 see higher prices than we're at now.

[landa]

This is because of the shale revolution, so you can't go back that far. They're different eras. As for 2014, it was because of the polar vortex. The current high prices are in the summer.

https://en.wikipedia.org/wiki/Early_2014_North_American_cold...

[ceejayoz]

"Highest in five years" didn't have quite the doomsday ring to it, eh?

There's a lot of idle capacity ready to go right now, but the energy companies are enjoying the higher prices. https://www.texasmonthly.com/news-politics/natural-gas-price...

[landa]

Five years is not the only thing -- it's also summer prices, whereas the other peaks were during very cold winters. Natural gas is very very seasonal, so winter gas and summer gas are different commodities almost.

Production is higher than ever before. Anyone can write any article that they wish. The only public data available right now from the EIA is a little lagged, but keep an eye on the September number when it is available.

https://www.eia.gov/dnav/ng/hist/n9070us2M.htm

[bumby]

As you say, much of the low gas prices that have occurred in recent memory is due to fracking. Those of us who are a bit older remember when natural gas used to be much higher than we're currently seeing, even before adjusting for inflation.

The energy companies used to also ramp up production in areas like the Permian Basin as soon as oil/gas reached certain thresholds. They are generally being much more disciplined right now because of uncertainty about the pandemic. From that perspective, the prices are more indicative of the "post-pandemic" economic recovery than inflation. If there was less uncertainty about the pandemic recovery, they would be more likely to invest in additional drilling and the price would come down from current levels. They just don't want to be caught ramping up production while seeing a simultaneous pandemic-driven downturn in demand.

[whimsicalism]

Ah well, as for 2021, it was because of the ongoing global pandemic.

[bko]

Just look at the personal savings rate. It shot up from less than 10% to over 30% and now back down. This was the stimulus checks which people pocketed and used to buy financial assets. That's another form of inflation but the "good" kind that us rich capital holders like. Eventually this money will re-enter the market and push up prices for every day goods.

Also official inflation rate isn't based on a fixed basket of goods, but changes. For instance, if chicken becomes more expensive, they weigh beef more. But pretty much anyone that's been to a restaurant in the last 6 months can tell you that prices are up a lot more than 5%. I guess just eat out less, right?

https://fred.stlouisfed.org/series/PSAVERT

[OldHand2018]

> I guess just eat out less, right?

Yes.

Adjusting behavior based on increasing prices (or, alternately, increasing wages) is normal.

[bko]

That's fine, but I don't want my inflation measure to make those decisions for me because its obviously gamed. Just tell me how much stuff costs relative to the past.

[OldHand2018]

It's not obvious that it is gamed.

In the short-term these adjustments feel wrong. But at what point does a no-adjustment inflation measure stop measuring inflation?

Buggy whips and hats are not in current inflation measures. Long ago, computers and airline tickets weren't in inflation measures. When did "eating at restaurants" become enough of a thing that it became part of inflation measurement? Restaurants have existed a really long time, no? Ancient Romans had "fast food".

Zoom out and think about it. Entire product categories come and go from our daily lives. Is there any possible method for understanding "how much stuff costs relative to the past" that doesn't look janky in the short run? This is a hard problem.

FYI - there are 100 or more different CPI series that are published. The news reports on a single one - the one that applies to the largest number of people in the US. You may find that a different one is more applicable to your particular circumstance.

[gibsonf1]

Adding trillions to the money supply, of course, has no impact whatsoever?

[whimsicalism]

People understand that inflation is a function of both money supply and velocity right?

Well I guess no, as almost every comment on this thread seems to have no idea.

https://fred.stlouisfed.org/series/M2V

[wbsss4412]

Money supply, velocity, and GDP growth*

Just wanted to add, if all else is held equal amount those factors, growth in gdp, without and subsequent changes in the money supply or velocity, would lead to deflation.

[dragonwriter]

> Money supply, velocity, and GDP growth

consumer price level should be proportional to Money supply × velocity ÷ (real GDP + value of net consumer imports)

[whimsicalism]

Yep!

Price Level = Money Supply * Velocity / Real GDP

If you improve real output without an increase in money supply or velocity, things'll get cheaper.

[martinko]

Economists would argue that the 'printed' money is actually reserves at the central bank, and thus has no impact on price levels. I myself am less certain about the overall dynamics.