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According to the gov, consumer price inflation has been 3.7% in the last 12 months. Most people whom you ask “how much has your cost of living gone up in the past 12 months?” will answer somewhere between 10% and 20%. Now granted that’s a “seat of the pants” number as most people don’t crunch numbers to the degree that would be needed, but still, when confronted with “3.7%” pretty much everybody will tell you to GTFO. For many people homeowner’s insurance has gone through the roof. Same with car insurance. Same with homes (or rent) and cars. Same with food. Same with health insurance and medical bills. Same with many other things we need to buy. So why isn’t there an alternative source of price inflation? I mean, this is information that is easy to gather, and you don’t need a proton collider to process it, just a spreadsheet. I’m only aware of shadowstats as an alternative CPI but for whatever reason it seems to get a lot of criticism from “pundits”. I remember years ago I think it was google that was sponsoring something called the “million price project” or something like that, where they were gonna track prices, but I never heard about it again. Does every effort to track price inflation independently get squashed by government goons in black vans or what’s the deal here?
First, you are incorrect when you say everyone thinks the CPI is rubbish.
Measures of inflation are tools, and different tools are appropriate for different jobs.
There's always been something of a controversy over which measure of inflation is best in any given circumstance:
the CPI-U,
the CPI-W,
the GDP deflator,
the chain-weighted CPI,
the producer price index,
or even the trendy personal-consumption expenditures index
Each of the above measures typically shows an inflation number within 0.3 to 0.4 percentage point of the others. While that isn't much, over time the difference compounds.
EVEN SO, essentially all economists agree that the CPI actually overstates true inflation because of its failure to incorporate the following:
Substitution bias: When the price of a product in the consumer basket increases substantially, in the real world we consumers tend to substitute lower-priced alternatives. Thus, since the CPI is a fixed-weight price index, it would not accurately predict the impact of the price increase on the consumer’s budget.
Quality bias: Over time, technological advances increase the life and usefulness of products, but the CPI does not reflect such improvements.
New Product Bias: New products are not introduced into the index until they become commonplace, so the dramatic price decreases often associated with new technology products are not reflected in the index.
Channel bias: the consumer shift to new outlets such as wholesale clubs and online retailers is not well-represented by the CPI. Therefore, it tends to overstate inflation due to an adjustment for channel.
One of the simplest examples: the first cellular telephones came out nearly 40 years ago, were the size and weight of a brick, were really crummy products with extremely limited capabilities, and cost about $13,000 in today's dollars. Over the following 15 years, the price declined by well over $12,000, it shrank to be small enough to fit in your pocket, and its quality increased by two orders of magnitude to become useful.
But that huge price decline was not captured in the CPI numbers because cellular telephones were not included in the market basket of goods until much, much later. Ditto for other once-new products including personal computers.
Look, prices are high and that sux, even though inflation is coming down slowly but surely.
There isn't an alternative because there isn't one.
No private company would compete with the US government.
The difference between a 3.2% COLA and your 3.7% figure is enough. Shows how well or badly the COLA is.
The FED may have it's own data but may not be shared with the public.
Inflation data may not be as easy to collect as you think. For all we know the Labor Department may need a new computer system to process all the data.
The CPI is not "rubbish" but it measures the rate of inflation, and you have to view it as a rate. In 2021, the inflation rate was 4.7%, and in 2022 it was 8%. That means overall prices went up 12.8% in just two years. If the 3.7% holds for the year, it means actual inflation will have been 16.5% over three years. That seems pretty accurate to me when considering it is for overall prices.
Of course, individual lines within that average vary wildly, but as a general gauge, it works pretty well. Individual lines may have large increases in prices, but others may actually have disinflation (declining prices). Used and new cars comes to mind as of late.
the cpi is a price change index that measure price changes across the 1500 mini economies that make up this country .
it reflects no one in particular, has loads of items you may not use and does not account for how many times you use something , the quality of what you buy as higher end products see bigger price jumps but tend to last longer .
the cpi does not reflect the things we no longer do or buy as we age that offset costs of what we do use and buy .
so it in no way reflects a cost of living of anyone in particular
According to the gov, consumer price inflation has been 3.7% in the last 12 months. Most people whom you ask “how much has your cost of living gone up in the past 12 months?” will answer somewhere between 10% and 20%. Now granted that’s a “seat of the pants” number as most people don’t crunch numbers to the degree that would be needed, but still, when confronted with “3.7%” pretty much everybody will tell you to GTFO. For many people homeowner’s insurance has gone through the roof. Same with car insurance. Same with homes (or rent) and cars. Same with food. Same with health insurance and medical bills. Same with many other things we need to buy. So why isn’t there an alternative source of price inflation? I mean, this is information that is easy to gather, and you don’t need a proton collider to process it, just a spreadsheet. I’m only aware of shadowstats as an alternative CPI but for whatever reason it seems to get a lot of criticism from “pundits”. I remember years ago I think it was google that was sponsoring something called the “million price project” or something like that, where they were gonna track prices, but I never heard about it again. Does every effort to track price inflation independently get squashed by government goons in black vans or what’s the deal here?
actual inflation for us is about 3-4% …the stuff that went up a lot went up for other reasons , like our long term care premiums jumped 4k because usage is way higher then stats from a generation ago showed .
our auto insurance jumped because we bought an 80k car .
our prescription costs jumped 2500 a year because i am on a drug that cost 1k a month now and i pay 250 a month out of pocket ,almost 4k in dental work this year for my wife and i …
the list goes on and on , but most jumps are things we changed…our food jumped a lot and rent jumped about 3% but overall we are in range of 3-4% based on total budget not counting the items that changed for reasons other than inflation
Last edited by mathjak107; 10-25-2023 at 07:19 AM..
According to the gov, consumer price inflation has been 3.7% in the last 12 months. Most people whom you ask “how much has your cost of living gone up in the past 12 months?” will answer somewhere between 10% and 20%. Now granted that’s a “seat of the pants” number as most people don’t crunch numbers to the degree that would be needed, but still, when confronted with “3.7%” pretty much everybody will tell you to GTFO. For many people homeowner’s insurance has gone through the roof. Same with car insurance. Same with homes (or rent) and cars. Same with food. Same with health insurance and medical bills. Same with many other things we need to buy. So why isn’t there an alternative source of price inflation? I mean, this is information that is easy to gather, and you don’t need a proton collider to process it, just a spreadsheet. I’m only aware of shadowstats as an alternative CPI but for whatever reason it seems to get a lot of criticism from “pundits”. I remember years ago I think it was google that was sponsoring something called the “million price project” or something like that, where they were gonna track prices, but I never heard about it again. Does every effort to track price inflation independently get squashed by government goons in black vans or what’s the deal here?
since last year it has been 'gerry mandered' to not include stuff people buy, in order to justify the criminally low COLA's.
who takes it on the chin the most?
1) SS recips - but who cares - hurry up and die right?
2) military - but who cares
3) feds - but who cares
Everyone knows what the checking balance is. Everyone knows reality. Whether or not they are willing to be honest about it is a different story.
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