Nearly half of American workers don’t earn enough to afford a one-bedroom (cont)(theguardian.com)
theguardian.com
Nearly half of American workers don’t earn enough to afford a one-bedroom (cont)
https://www.theguardian.com/society/2021/aug/12/housing-renter-affordable-data-map
130 comments
Anyone who didn't get a 20% raise this year lost money. As the fed pumped cash, the stock market gains kept the rich from feeling the inflation that is being handed to everybody else with a bow on it.
For months everyone has naysayed the idea that money printing would have a negative effect, now just Google "inflation" news articles.
For months everyone has naysayed the idea that money printing would have a negative effect, now just Google "inflation" news articles.
>Anyone who didn't get a 20% raise this year lost money.
but inflation (as measured by CPI) isn't anywhere close to 20%?
but inflation (as measured by CPI) isn't anywhere close to 20%?
I have tons of anecdata suggesting worse…
I just filled up a propane tank, 3lbs of fuel was almost $10 whereas a year ago it was $5-$6
The price of a California burrito most places here is almost $10, they were closer to $7/$8 before pandemic started spiking beef prices
It’s getting harder and harder to keep the bill at Costco under $100
Uber/Lyft rides that used to be $10 cost $15-$20 during non-surge hours
And so on…
I just filled up a propane tank, 3lbs of fuel was almost $10 whereas a year ago it was $5-$6
The price of a California burrito most places here is almost $10, they were closer to $7/$8 before pandemic started spiking beef prices
It’s getting harder and harder to keep the bill at Costco under $100
Uber/Lyft rides that used to be $10 cost $15-$20 during non-surge hours
And so on…
I like to anecdotally track burrito prices.
When I worked in Hawthorne in 2010, there was a $4 burrito option. When I left in 2013, it was a $5.50 burrito.
In the bay area, it seems like burritos with guacamole have been $9-11 for several years now.
Restaurant breakfast burritos have seemingly gone up from $8 to about $12 in the last two years.
Grocery store deli counter breakfast burritos have gone up from about $3.50 to about $4.50.
Microwave burritos have gone up from $not-worth-it to $not-worth-it + 2 over the last couple years.
The diner down the street from me makes the best breakfast burrito for about $9, enough to feed two people. It's pretty amazing, considering it would probably cost me $6 to recreate from the grocery store. My favorite coffee shop in 2019 had a $12 burrito that was a bit overpriced but worth it; they shut down months before the pandemic ramped up, though. I suspect it was partially because of the burrito price. Their food was expensive enough that my wife and I would always share an entree regardless of how hungry we were. We live in a touristy area, and there are local restaurants we won't even consider going to because it's so overpriced.
When I worked in Hawthorne in 2010, there was a $4 burrito option. When I left in 2013, it was a $5.50 burrito.
In the bay area, it seems like burritos with guacamole have been $9-11 for several years now.
Restaurant breakfast burritos have seemingly gone up from $8 to about $12 in the last two years.
Grocery store deli counter breakfast burritos have gone up from about $3.50 to about $4.50.
Microwave burritos have gone up from $not-worth-it to $not-worth-it + 2 over the last couple years.
The diner down the street from me makes the best breakfast burrito for about $9, enough to feed two people. It's pretty amazing, considering it would probably cost me $6 to recreate from the grocery store. My favorite coffee shop in 2019 had a $12 burrito that was a bit overpriced but worth it; they shut down months before the pandemic ramped up, though. I suspect it was partially because of the burrito price. Their food was expensive enough that my wife and I would always share an entree regardless of how hungry we were. We live in a touristy area, and there are local restaurants we won't even consider going to because it's so overpriced.
> I just filled up a propane tank, 3lbs of fuel was almost $10 whereas a year ago it was $5-$6
Great. And what was it 2 years ago? 3 years ago? In fact propane is still cheaper now than it was in 2018:
* https://fred.stlouisfed.org/series/WPU05320104
So yes, perhaps propane has gone up since last year. But last year it was the cheapest it's been since 1999. So of course the YoY change is going to go up.
Further, in regards to CPI, what percentage of propane purchases make up of your expenses, either on a monthly or annual basis? In the US, "Propane, kerosene, firewood" make up .076% of the CPI:
* https://www.bls.gov/cpi/factsheets/household-fuels.htm
In general, household energy makes up 3.605%, with electricity being 2.628%. So while you may feel like it's a big deal, how much of your budget is it really impacting?
What were your expenses in all the various categories of spending last year, and what are they this year? Cherry picking one data point that you just happen to notice does not necessarily mean your expenses are much different in total.
In Canada, StatCan has a personal inflation calculator where you can enter your own expenses for a personal basket of goods:
* https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020015...
I think if the BLS had a similar tool a lot of the "I think/feel inflation is more than x%" comments would be reduced, as people wouldn't be trying to extrapolate the average CPI to themselves.
Great. And what was it 2 years ago? 3 years ago? In fact propane is still cheaper now than it was in 2018:
* https://fred.stlouisfed.org/series/WPU05320104
So yes, perhaps propane has gone up since last year. But last year it was the cheapest it's been since 1999. So of course the YoY change is going to go up.
Further, in regards to CPI, what percentage of propane purchases make up of your expenses, either on a monthly or annual basis? In the US, "Propane, kerosene, firewood" make up .076% of the CPI:
* https://www.bls.gov/cpi/factsheets/household-fuels.htm
In general, household energy makes up 3.605%, with electricity being 2.628%. So while you may feel like it's a big deal, how much of your budget is it really impacting?
What were your expenses in all the various categories of spending last year, and what are they this year? Cherry picking one data point that you just happen to notice does not necessarily mean your expenses are much different in total.
In Canada, StatCan has a personal inflation calculator where you can enter your own expenses for a personal basket of goods:
* https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020015...
I think if the BLS had a similar tool a lot of the "I think/feel inflation is more than x%" comments would be reduced, as people wouldn't be trying to extrapolate the average CPI to themselves.
A lot of this stuff is transitory, and there are signs it's starting to come down. However with the rise of delta, I think we're in for a rocky ride ahead.
Edit: in the spirit of worker solidarity though, if you can convince your boss to give you a 20% raise by showing them the M2 money supply, I fully support you in that.
https://www.forbes.com/sites/simonmoore/2021/08/12/cpi-data-...
Edit: in the spirit of worker solidarity though, if you can convince your boss to give you a 20% raise by showing them the M2 money supply, I fully support you in that.
https://www.forbes.com/sites/simonmoore/2021/08/12/cpi-data-...
> I have tons of anecdata suggesting worse…
And that's flawed due to https://en.wikipedia.org/wiki/Availability_heuristic
[thing] increases in price: "omg inflation!"
[thing stays the same]: "meh"
result? "omg inflation!"
And that's flawed due to https://en.wikipedia.org/wiki/Availability_heuristic
[thing] increases in price: "omg inflation!"
[thing stays the same]: "meh"
result? "omg inflation!"
But… that is inflation. Prices are going up. Such is the anecdata?
Is this effect global? Who knows, it’s anecdata
Is this effect global? Who knows, it’s anecdata
I've been feeling the price rises too, I second the Costco thing entirely too. I have a ton of receipt data I can analyze. I've been curious to track my personal expenses for things like milk, take out burgers, and other stuff I regularly purchase and have lots of data points on over time. I think the anecdata speaks, very loudly for the individual visibly paying more.
I would like to know more. My first suspicion is that most people don't track this data closely enough. Unfortunately after tracking this data for about 15 years, I stopped in 2018 (too cumbersome). I was able to tell you exactly how much money we spent on alcohol vs. dairy vs. veggies etc.
If only I had continued, I could've provided great anecdata here, because we never really "go out". And herein lies the crux. Many if not most other people I know go out regularly. Rain or shine, recently got kids or not etc. So the pandemic hitting would drive up their Costco bills even if prices stayed flat.
Happy to learn that the anecdata presented in this thread is from people like me. But otherwise my "felt" Costco bill has stayed almost the same (minus "normal" inflation).
If only I had continued, I could've provided great anecdata here, because we never really "go out". And herein lies the crux. Many if not most other people I know go out regularly. Rain or shine, recently got kids or not etc. So the pandemic hitting would drive up their Costco bills even if prices stayed flat.
Happy to learn that the anecdata presented in this thread is from people like me. But otherwise my "felt" Costco bill has stayed almost the same (minus "normal" inflation).
yah the cumbersome part is for real; for the longest I never itemized groceries, just lump sums spent. I've been slowly automating more of the process. For online purchases I write some chrome extensions that scrape the order pages and downloads a Json file for me. Works for the most part and I'm looking to extend to a few more vendors:
https://github.com/jxramos/webOrders.
All the data captured over the years omits very fine detail for the most part; things like weights and volumes and stuff. The data is fairly messy but there should have some signal within it however. This motivates me to revisit what sort of receipt OCR stuff is out there, it's been a TODO for a long time. I'm looking for mainly partially automated stuff, fully automate the frequent vendors, manual entry the rest: https://gist.github.com/jxramos/db8195d1972b6d7f7eb0e97be51d...
All the data captured over the years omits very fine detail for the most part; things like weights and volumes and stuff. The data is fairly messy but there should have some signal within it however. This motivates me to revisit what sort of receipt OCR stuff is out there, it's been a TODO for a long time. I'm looking for mainly partially automated stuff, fully automate the frequent vendors, manual entry the rest: https://gist.github.com/jxramos/db8195d1972b6d7f7eb0e97be51d...
Yeah before giving up completely I checked into OCR as well. However I haven't found solutions that are both easily usable by consumers (e.g. a mobile app) and actually is able to itemize and categorize. Everything I found was only able to figure out that something is a say Costco receipt and then categorize that whole receipt say as "groceries". That doesn't help at all.
I even went as far as building a small mobile app using AWS OCR. I was able to itemize and categorize using that but it still required manual "fingerprinting" of each receipt type. Basically figuring out that something was a Costco receipt and in Costco receipts this column in the OCR'd text was the name of the item etc and then also defining the mapping of item name to category.
Worked well enough but I wasn't willing to pay for this after all the free trials and such if it couldn't be monetized by releasing the app. And since the fingerprinting is pretty cumbersome and error prone (Costco doesn't even have a global standard for their receipt format, never mind different gas stations etc) and I neither have the expertise nor the necessary training data for a machine learning approach.
I even went as far as building a small mobile app using AWS OCR. I was able to itemize and categorize using that but it still required manual "fingerprinting" of each receipt type. Basically figuring out that something was a Costco receipt and in Costco receipts this column in the OCR'd text was the name of the item etc and then also defining the mapping of item name to category.
Worked well enough but I wasn't willing to pay for this after all the free trials and such if it couldn't be monetized by releasing the app. And since the fingerprinting is pretty cumbersome and error prone (Costco doesn't even have a global standard for their receipt format, never mind different gas stations etc) and I neither have the expertise nor the necessary training data for a machine learning approach.
>But… that is inflation
did I say it wasn't? The BLS freely admits that inflation is higher than usual at 5.4% YOY. What's being disputed is whether it's 5.4% as the BLS claims or 20% as GGP claims.
>Is this effect global? Who knows, it’s anecdata
The problem is that listing a bunch of things that's gone up by 20% doesn't mean the overall CPI went up 20%. CPI is a weighted measure, so the things you listed only contribute 1% to it, then it can go up 2000% and the CPI wouldn't be anywhere close to the claimed 20%.
did I say it wasn't? The BLS freely admits that inflation is higher than usual at 5.4% YOY. What's being disputed is whether it's 5.4% as the BLS claims or 20% as GGP claims.
>Is this effect global? Who knows, it’s anecdata
The problem is that listing a bunch of things that's gone up by 20% doesn't mean the overall CPI went up 20%. CPI is a weighted measure, so the things you listed only contribute 1% to it, then it can go up 2000% and the CPI wouldn't be anywhere close to the claimed 20%.
I read the gp comments as questioning the relevance of the CPI. From my experience it understates the very real price increases I am seeing where I am
The prices faced by the average tech worker are very different. Restaurant prices in SF have one of the highest increasing prices indices in the country, you can look it up.
Ubers have also increased in price.
Groceries.. have not.
Ubers have also increased in price.
Groceries.. have not.
>From my experience it understates the very real price increases I am seeing where I am
the "very real price increases" you're seeing is clouded by the https://en.wikipedia.org/wiki/Availability_heuristic. The CPI uses a fixed basket to weigh the different price increases. Meanwhile in your head, your brain weighs price increases based on the shock factor. That lyft ride that got 2x more expensive? That's going to have much more mental weight than your rent that stayed about the same, even though the rent makes up 40% of your monthly spend and your lyft rides makes up 5%.
the "very real price increases" you're seeing is clouded by the https://en.wikipedia.org/wiki/Availability_heuristic. The CPI uses a fixed basket to weigh the different price increases. Meanwhile in your head, your brain weighs price increases based on the shock factor. That lyft ride that got 2x more expensive? That's going to have much more mental weight than your rent that stayed about the same, even though the rent makes up 40% of your monthly spend and your lyft rides makes up 5%.
Also good old fashioned confirmation bias. If someone thinks inflation must be through the roof and the government is lying about it, then they're going to notice things that get more expensive, while ignoring things that get cheaper or stay the same.
> Is this effect global? Who knows, it’s anecdata
You say this like no one measures inflation, but in fact we do measure inflation quite carefully, and it's nowhere near 20%.
You say this like no one measures inflation, but in fact we do measure inflation quite carefully, and it's nowhere near 20%.
Ehh, not _that_ carefully. Real inflation is notoriously difficult to track, as you need to take into consideration things like decreases in manufacturing quality, ingredient substitutions, planned obsolescence, etc.
Ehh, they try pretty damn carefully. They absolutely do take into consideration things like changing quality and ingredients.
> Pricing information is then sent to our national office, where specialists who have detailed knowledge about the particular goods or services review the data. These specialists check the data for accuracy and consistency, and make any necessary corrections or adjustments. Adjustments can range from an adjustment for a change in the size or quantity of a packaged item, to more complex adjustments based upon statistical analysis of the value of an item's features or quality. Thus, commodity specialists strive to prevent changes in the quality of items from affecting the CPI's measurement of price change.
> Hedonic quality adjustment is one of the techniques the CPI uses to account for changing product quality within some CPI item samples. Hedonic quality adjustment refers to a method of adjusting prices whenever the characteristics of the products included in the CPI change due to innovation or the introduction of completely new products.
https://www.bls.gov/cpi/questions-and-answers.htm#Question_1...
https://www.bls.gov/cpi/quality-adjustment/questions-and-ans...
> Pricing information is then sent to our national office, where specialists who have detailed knowledge about the particular goods or services review the data. These specialists check the data for accuracy and consistency, and make any necessary corrections or adjustments. Adjustments can range from an adjustment for a change in the size or quantity of a packaged item, to more complex adjustments based upon statistical analysis of the value of an item's features or quality. Thus, commodity specialists strive to prevent changes in the quality of items from affecting the CPI's measurement of price change.
> Hedonic quality adjustment is one of the techniques the CPI uses to account for changing product quality within some CPI item samples. Hedonic quality adjustment refers to a method of adjusting prices whenever the characteristics of the products included in the CPI change due to innovation or the introduction of completely new products.
https://www.bls.gov/cpi/questions-and-answers.htm#Question_1...
https://www.bls.gov/cpi/quality-adjustment/questions-and-ans...
> But… that is inflation. Prices are going up. Such is the anecdata?
But what proportion do [thing] and [thing stays the same] make up of your budget? That's why the CPI uses a basket of goods, each in proportion to what the average person uses in their lives to find the average inflation.
And some [thing]s may be more noticeable than others: yes, gas may have gone up, but your care insurance perhaps hasn't, and so perhaps hasn't parts and maintenance. But you fill up more often so you notice those prices more and suffer recency bias.
In Canada, StatCan actually has a "Consumer Price Index Personal Inflation Calculator" so that you can find the quantitate number to your personal experience of inflation give your personal basket of goods, versus the average one:
* https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020015...
But what proportion do [thing] and [thing stays the same] make up of your budget? That's why the CPI uses a basket of goods, each in proportion to what the average person uses in their lives to find the average inflation.
And some [thing]s may be more noticeable than others: yes, gas may have gone up, but your care insurance perhaps hasn't, and so perhaps hasn't parts and maintenance. But you fill up more often so you notice those prices more and suffer recency bias.
In Canada, StatCan actually has a "Consumer Price Index Personal Inflation Calculator" so that you can find the quantitate number to your personal experience of inflation give your personal basket of goods, versus the average one:
* https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2020015...
Uber/Lyft have IPOd and no longer are being pumped artificially, and they need to make up after a year of drastically lower revenue. Lots of things increased in price but that doesn't always mean it's tied to something larger.
So you’re saying they will lower prices after they’ve made up for the shortfall? I doubt it. That would be leaving money on the table, and that’s positively unamerican!
That's not what I'm saying. I'm saying that not only do they not have VC cash mania going on, they're also really hit by Covid. The only way they'd start lowering prices is if demand spikes, things normalized out, and Uber/Lyft wage war on each other as capitalism is supposed to work (but in reality they'll just pick turfs).
They're also still losing money. I'd be surprised to ever see cheap prices again from them.
Ironically I have been riding with the local Yellow Cab again, the fixed prices they quote on their app consistently undercut Uber/Lyft and the drivers actually show up in a reasonable amount of time
The CPI includes propane and food. Uber / Lyft prices used to be artificially cheap due to VC subsidies but most regular people barely use those services anyway.
Why is that inflation and not things like supply chain problems or availability?
>supply chain problems or availability
If supply chain problems or availability cause prices to go up, that's still inflation. They might call it transitory inflation or whatever, but they won't say "well that's just supply chain problems so we won't count it for this month".
If supply chain problems or availability cause prices to go up, that's still inflation. They might call it transitory inflation or whatever, but they won't say "well that's just supply chain problems so we won't count it for this month".
I see, guess it was a bad question. In the context of this discussion the comment chain seems to be talking about money supply as being the source of inflation. Seems like there's different types of inflation. I see some other comments trying to clarify that too
The Cali Burrito increase has been insane.
I don't know where you've been buying them, but $10 is the normal price from the places I'd buy them and has been for ages.
San Diego man, only place it can truly be called a Cali Burrito. That shit in LA is gross.
Most places have gone up about $3 since start of the pandemic.
Most places have gone up about $3 since start of the pandemic.
Not sure why you're being downvoted but yes I am speaking about SD.
As for the LA cali burrito heads: don't step dudes. Y'all got plenty of great food that kicks our asses. But we have the best calimex, hands down. "Don't ever argue with a San Diegan about Mexican food"
As for the LA cali burrito heads: don't step dudes. Y'all got plenty of great food that kicks our asses. But we have the best calimex, hands down. "Don't ever argue with a San Diegan about Mexican food"
He's probably been paying our new price for his subpar tier burritos the entire time.
I'd almost shed a tear.
I'd almost shed a tear.
20% of dollars in circulation were printed in 2020 and the inflation is filtering down. Also inflation statistics are intentionally blurred. Look at housing prices or other individual metrics.
Inflation isn't directly (that is one-to-one) tied to the amount of money printed. That's a simplistic view of a complicated phenomena. What matters is demand aggregated among many individuals. You can print any sum of money and if the person you give it to decides not to spend it, it doesn't affect demand and thus doesn't cause inflation. Meanwhile you can stop printing money, and if demand increases inflation can still occur.
But what if we handed the printed dollars to a large number of individuals to spend immediately to cover their income shortfalls in unprecedented government largess?
If it's covering an income shortfall, it doesn't seem like that would cause inflation.
If I normally spend $2k a month, but then lose my job and get $2k from the government, that's not going to cause inflation.
From what I understand, much of the stimulus money was saved. https://fred.stlouisfed.org/series/PSAVERT
If I normally spend $2k a month, but then lose my job and get $2k from the government, that's not going to cause inflation.
From what I understand, much of the stimulus money was saved. https://fred.stlouisfed.org/series/PSAVERT
> If I normally spend $2k a month, but then lose my job and get $2k from the government, that's not going to cause inflation.
That $2k a month that you used to earn is still out there somewhere unaccounted for.
That $2k a month that you used to earn is still out there somewhere unaccounted for.
Except the money you would have been paid previously still exists somewhere and will go somewhere else.
>>You can print any sum of money and if the person you give it to decides not to spend it, it doesn't affect demand and thus doesn't cause inflation.
In short this is the equivalent of not printing money.
The very reason why you print money is to spend it. If you didn't want to spend money. Why print it?
In short this is the equivalent of not printing money.
The very reason why you print money is to spend it. If you didn't want to spend money. Why print it?
M2 money supply doesn’t correspond very closely with inflation. https://www.longtermtrends.net/m2-money-supply-vs-inflation/
Your link doesn't support your conclusion. Growth in M2 clearly precedes increases in inflation by 1-3 years.
Look at the second chart:
"M2 Money Supply vs. CPI and GDP"
220x increase in the money supply vs 18x increase in CPI
"M2 Money Supply vs. CPI and GDP"
220x increase in the money supply vs 18x increase in CPI
Did you expect them to be the same, in order for there to be a causal effect?
I expect them to have some actual correlation over time for a causal effect look at say 1960 to 1970 and the graphs have nothing in common. Hell some peaks look years early others late but most don’t have anything to do with each other.
Bretton Woods ended in 1973. Any time before then, the money supply was strongly impacted by the government's gold reserves.
The only real anomaly in that chart is 2011, which is concealed by the fact that CPI is a terrible inflation metric when wealth inequality is changing (see the increase in equities and real estate during that period).
For reference: CPI is based on a survey to see what median Americans are buying, the prices of those things, and how much of them they are buying. Naturally, people change their spending habits when prices rise to buy cheaper items, and this cancels out the how much of them they buy to end up with an effective metric of "how much are median Americans spending" (hint: basically all of their money). So CPI measures the median American's income, which is why there can never be any changes in "real wages" [0].
[0] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
The only real anomaly in that chart is 2011, which is concealed by the fact that CPI is a terrible inflation metric when wealth inequality is changing (see the increase in equities and real estate during that period).
For reference: CPI is based on a survey to see what median Americans are buying, the prices of those things, and how much of them they are buying. Naturally, people change their spending habits when prices rise to buy cheaper items, and this cancels out the how much of them they buy to end up with an effective metric of "how much are median Americans spending" (hint: basically all of their money). So CPI measures the median American's income, which is why there can never be any changes in "real wages" [0].
[0] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
How about 1980 to 1986 where inflation tanked 90% and M2 started at 8% peaked at over 12% then fell back to 8%. The charts for those years have nothing in common.
I get it, M2 really seems like it should correspond with inflation but at minimum you need to adjust for economic growth. As we produce and consume more we need more money handle those transactions.
I get it, M2 really seems like it should correspond with inflation but at minimum you need to adjust for economic growth. As we produce and consume more we need more money handle those transactions.
Recommend you take a look at this to see more factors involved in inflation, in a more quantitative light: https://www.lynalden.com/inflation/.
The reason CPI is a terrible metric is because measuring inflation is very difficult and somewhat arbitrary (see for example: hedonic adjustments). M2 is a significant, consistent, and logical factor. Even from 1980-1986, rapid changes in M2 consistently correspond to a change in inflation. But there are other factors, like real economic growth, population growth, changes in size of the labor force and velocity of money.
The reason CPI is a terrible metric is because measuring inflation is very difficult and somewhat arbitrary (see for example: hedonic adjustments). M2 is a significant, consistent, and logical factor. Even from 1980-1986, rapid changes in M2 consistently correspond to a change in inflation. But there are other factors, like real economic growth, population growth, changes in size of the labor force and velocity of money.
Look I am aware of a host of factors that in theory influence inflation and the multiple different ways it’s measured. I am also perfectly willing to acknowledge there is a connection between M2 and inflation. But, when historical correlations are this weak you can’t suggest A predicts B when it simply hasn’t.
Who needs facts when they have feelings?
What I feel is prices on everything in every store and online going up, while packaging shrinks. Who's doing your shopping? There's a big difference between facts and government published statistics.
I was just noticing the price of beans appears to have gone down. Perhaps you’re buying the wrong thing at the grocery.
There's a bit of dissonance between this:
> What I feel...
versus:
> facts...
> What I feel...
versus:
> facts...
>Who's doing your shopping? There's a big difference between facts and government published statistics.
CPI adjusts for package sizes.
CPI adjusts for package sizes.
I identify as inflation
Housing prices across the board have jumped 40% on average -- in the past year. In the insane prop 13 fueled market that is california bay area increases are closer to 65% in the past year.
The Case Shiller index shows a significant price increase but nowhere near 40%.
https://fred.stlouisfed.org/series/CSUSHPINSA
https://fred.stlouisfed.org/series/CSUSHPINSA
No they haven’t.
“According to Zillow, the typical value of U.S. homes is $269,039 as of January 2021, a 9.1% increase from January 2020. Between 1999 and 2021, the median price has more than doubled from $111,000 to $269,039.”
“According to Zillow, the typical value of U.S. homes is $269,039 as of January 2021, a 9.1% increase from January 2020. Between 1999 and 2021, the median price has more than doubled from $111,000 to $269,039.”
What about only including data from places people want to live? You can buy a house in South Dakota for 25,000, but that not useful information when looking at national housing inflation.
South Dakota would be nice. We were up there for a couple days this spring and it was tempting. Nice people, little bit of scenery, cost of living is reasonable. Definitely beats moving to someplace that's crowded and hectic or at high risk for flooding or wildfires.
Median cuts things in half, it’s effectively the middle of housing desirability. You might want to live in NYC or SF, but most of the US doesn’t.
>What about only including data from places people want to live
Shouldn't the median sale account for this? If there's a buyer presumably somebody wants to live there, and if there are 1000 sales in CA but 10 in SD that would be accounted for as well.
Shouldn't the median sale account for this? If there's a buyer presumably somebody wants to live there, and if there are 1000 sales in CA but 10 in SD that would be accounted for as well.
> Anyone who didn't get a 20% raise this year lost money
Inflation numbers that just came out measure year-over-year inflation at 5.4%. And last July we had artificially depressed demand during the pandemic.
Inflation numbers that just came out measure year-over-year inflation at 5.4%. And last July we had artificially depressed demand during the pandemic.
Inflation statistics are lies. Look at individual metrics in housing and food.
The fact that inflation is going up exactly as much as it should kind of destroys that idea. There are lots of conspiracy theorists that say real inflation is something like 10% per year and the government is suppressing it into a convenient range for the sake of specific policies.
Well, if it were that simple they would simply report another manipulated inflation number and sleep well at night.
Let's assume we accept that there is actually double digit inflation of some sort then what meaning would it have to the economy or monetary policy? Honestly, I'd say it would have zero relevance. Ok, houses went up and now we have to make money scarce and make people unemployed because of that? Building a house creates jobs, selling a house doesn't.
Well, if it were that simple they would simply report another manipulated inflation number and sleep well at night.
Let's assume we accept that there is actually double digit inflation of some sort then what meaning would it have to the economy or monetary policy? Honestly, I'd say it would have zero relevance. Ok, houses went up and now we have to make money scarce and make people unemployed because of that? Building a house creates jobs, selling a house doesn't.
All food CPI is up 2.1% this year, housing of course is much more but that's what the article is about so where's the lie?
Food items are swapped out for lower cost 'substitutes'. I can't imagine someone cooking those numbers
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Prices up 2.1%, I would like to see the average package size change. Shrinkflation is happening to everything on the shelves.
package size is factored into inflation.
Package constituents are not.
Most of the food items counted are regulated or graded eg beef. So the package constituents are being considered generally.
What does that mean? Can you elaborate, or provide an example?
Read: cherry pick whichever values are highest to keep the inflation narrative going.
The data disagrees with my hypothesis, therefore the data must be wrong.
Inflation numbers are politically controlled. Simply look at how much buying power you have today vs. a few years ago and you will get a much more accurate picture of what the reality is.
The problem is that worries about inflation are only ever trotted out when relief for individuals is being considered. Money printing to juice the markets happens without concern or debate.
The bailout that caused all the current asset inflation happened reflexively after a single day drop in the stock market at the start of Covid. Executives had looted companies by loading them up with debt that relied on optimistic cashflow, gave themselves bonuses for that "optimization", and then got bailed out when the cashflow slowed. These companies should have been restructured in bankruptcy, with the executives going to jail for violation of fiduciary duty. Instead, they were rewarded.
The direct price inflation we're seeing lately is actually a good thing in that it will force the Fed to use the brakes. When they only give money to the financial industry, it takes a while for price inflation to occur. But by giving the new money directly to consumers instead, price inflation occurs much quicker and thus precludes asset inflation.
The bailout that caused all the current asset inflation happened reflexively after a single day drop in the stock market at the start of Covid. Executives had looted companies by loading them up with debt that relied on optimistic cashflow, gave themselves bonuses for that "optimization", and then got bailed out when the cashflow slowed. These companies should have been restructured in bankruptcy, with the executives going to jail for violation of fiduciary duty. Instead, they were rewarded.
The direct price inflation we're seeing lately is actually a good thing in that it will force the Fed to use the brakes. When they only give money to the financial industry, it takes a while for price inflation to occur. But by giving the new money directly to consumers instead, price inflation occurs much quicker and thus precludes asset inflation.
> Executives had looted companies by loading them up with debt that relied on optimistic cashflow, gave themselves bonuses for that "optimization", and then got bailed out when the cashflow slowed. These companies should have been restructured in bankruptcy, with the executives going to jail for violation of fiduciary duty.
By "optimistic cashflow", do you mean the assumption that the government wouldn't suddenly ban most companies from doing anything that would earn them any money for months on end? Because until they did, that seemed like a totally reasonable assumption.
By "optimistic cashflow", do you mean the assumption that the government wouldn't suddenly ban most companies from doing anything that would earn them any money for months on end? Because until they did, that seemed like a totally reasonable assumption.
No, I mean they assumed that there would not be a significant slowdown of economic activity due to something like a pandemic, recession, depression, natural disaster, or even a market shift. Trying to pin the blame on the government is a bit disingenuous when there was an overarching condition that everybody was responding to.
This reminds me of the overseas cash reserves that corporations hold. They basically wait for a tax holiday. Now that inflation is there, that strategy has an obvious problem.
You're right about consumer stimulus. The worst thing about inflation is that it is unpredictable. Pumping the markets with trillions without meaningfully impacting inflation just causes more unpredictability. Just do "QE for the people", hit your inflation goal and then never talk about low inflation again.
You're right about consumer stimulus. The worst thing about inflation is that it is unpredictable. Pumping the markets with trillions without meaningfully impacting inflation just causes more unpredictability. Just do "QE for the people", hit your inflation goal and then never talk about low inflation again.
> For months everyone has naysayed the idea that money printing would have a negative effect, now just Google "inflation" news articles.
I did, they all say inflation is transitory largely due to supply chain issues, and that it looks like it's starting to come down.
I did, they all say inflation is transitory largely due to supply chain issues, and that it looks like it's starting to come down.
Interesting that you say that. I took a 10% raise in March and I was content with it. Last Friday, very unexpectedly, my manager (an SVP) gets me onto an ad-hoc 1:1 to tell me that I was approved for a 15% raise. Hush, hush, don't tell others -- of course, I spoke with some colleagues about it; I've worked very closely with a few of these people for over 7 years, there aren't many work secrets between us, pay included, and many of them, but not all of them, also received significant mid-year bumps this year, as well). I've never had a mid-year adjustment... Never.
This explains what occurred in a very neat and tidy package and also confirms my own suspicions.
This explains what occurred in a very neat and tidy package and also confirms my own suspicions.
It appears that it was like that for a while… S&P 500 had 4 out of 5 last years with at least 15% annual returns (2018 had negative returns).
You clearly don't know what inflation is.
LOL now this is fearmongering at it's best (worst?). You don't have to count the number of articles to measure inflation (surely this is a joke, right?), instead you can go straight to the source to see that prices rose 0.9% in June and 0.5% in July. It's at 5.3% for the year[0]. Come on @Grakel, do better
[0]https://abcnews.go.com/US/wireStory/us-consumer-prices-rose-...
[0]https://abcnews.go.com/US/wireStory/us-consumer-prices-rose-...
Ahh yes, those government published facts, love it.
Ahh yes, those conspiracy-based "alternative facts", love it. Post some evidence or GTFO.
You're the one losing out on useful statistics.
where is this 20% inflation conspiracy theory coming from? it seems to be particularly common among nerds who don't know anything about finance.
I was repeatedly downvoted for pointing this out on HN. In fact, ridiculed with "Good ol' trickle up economics" snark.
It's because the "secret inflation" theory is incredibly prevalent in tech-y circles (something around bitcoin maybe) without any real evidence to back it up - except "something something asset inflation"
Inflation is a complex metric. I don't there is a meaningful way to summarize it.
If your argument consists of "it's too complicated for anyone to understand why I'm right", that might explain some of the responses you get.
It wasn't and you're mischaracterizing. You haven't seen my comments from last year. Without repeating the arguments, the Economist wrote an article about why measuring inflation is complex and you can't just look at CPI: https://www.economist.com/the-economist-explains/2017/09/05/...
Point is that HN was so gung-ho about covid stimulus package, that any comment that pointed out inflation issues that we're going to have in the future were ridiculed. And, now here we are.
Point is that HN was so gung-ho about covid stimulus package, that any comment that pointed out inflation issues that we're going to have in the future were ridiculed. And, now here we are.
> now here we are.
And we're right back to the secret inflation theory that your parent referenced. The main point of contention regarding the current numbers is that it's too early to know where we are, that is, to know whether the inflation we've seen this year is transient.
There was a steady stream of inflation scaremongering throughout the Obama years which never made economic sense, and of course never came to fruition. I heard the same arguments about it then: "inflation is here, it's just complex and the government is hiding it".
Of course you could be right this time, but it also shouldn't surprise you that an attempt to support this prediction by rehashing the old secret inflation theory attracts a few eye-rolls.
And we're right back to the secret inflation theory that your parent referenced. The main point of contention regarding the current numbers is that it's too early to know where we are, that is, to know whether the inflation we've seen this year is transient.
There was a steady stream of inflation scaremongering throughout the Obama years which never made economic sense, and of course never came to fruition. I heard the same arguments about it then: "inflation is here, it's just complex and the government is hiding it".
Of course you could be right this time, but it also shouldn't surprise you that an attempt to support this prediction by rehashing the old secret inflation theory attracts a few eye-rolls.
Your article identifies issues with Britain's inflation basket that caused them to overestimate inflation by 0.6% a year, and you are using it as an argument that we underestimated inflation by >15%.
That is the bottom line, I'll let other readers draw their conclusions about what is reasonable.
That is the bottom line, I'll let other readers draw their conclusions about what is reasonable.
At some point people are just going to stop paying rent.
The American dream is to become a property owner.
Not far off from an old European dream - https://en.m.wikipedia.org/wiki/Landed_gentry
> "The report’s Housing Wage is an estimate of
the hourly wage full-time workers must earn
to afford a rental home at HUD’s fair market
rent without spending more than 30% of their
incomes. Fair market rents are estimates of what
a person moving today can expect to pay for
a modestly priced rental home in a given area.
The kind of home that can be rented for the fair
market rent is in decent condition, but it is not
luxury housing."
Basically, unless I am reading the chart wrong (https://nlihc.org/sites/default/files/oor/2021/Out-of-Reach_...) the price of a 1 bedroom home is in fact affordable to 50%+ of the population.
its kind of like duh, the average house is affordable to the average person, and people below that average (nearly half) would have to spend more than 30% of their income to pay for the average 1br by the very fact they are in the lower tier.
they also try to make it sound like 'unaffordable' means they can't ever pay those prices, they could, it would just take more of their take home.
Basically, unless I am reading the chart wrong (https://nlihc.org/sites/default/files/oor/2021/Out-of-Reach_...) the price of a 1 bedroom home is in fact affordable to 50%+ of the population.
its kind of like duh, the average house is affordable to the average person, and people below that average (nearly half) would have to spend more than 30% of their income to pay for the average 1br by the very fact they are in the lower tier.
they also try to make it sound like 'unaffordable' means they can't ever pay those prices, they could, it would just take more of their take home.
This is a good point, when you take into account two income households, more then half can afford the average apartment.
It would make sense that the lowest 10% of paid workers would live in the cheapest 10% of apartments. I wonder how that picture looks.
I don't think it follows that "the average house is affordable to the average person." A 1br apartment is certainly not the average home. And paying more than 30% of your income on housing might sound like it'll reduce your savings and investments if you are earning a high income where other essential expenses might only take another 20% of your income, but for a low income person, it would mean not being able to afford healthcare, food, transportation. If you can't see the problem, then you don't know much about how the other half lives.
Living conditions for the working class will eventually equalise with that of Mexico. With the scale of immigration into the country, its inevitable. Labour rates will be driven down, and housing prices (in markets with supply restrictions) driven up.
This should at least be controlled with legal temporary migration and removal of birth citizenship (which very few Western countries have), instead of a free-for-all with a large criminal element.
This should at least be controlled with legal temporary migration and removal of birth citizenship (which very few Western countries have), instead of a free-for-all with a large criminal element.
It used to be understood in the 2nd half of the 20th century that a modern western society needs a strong middle class.
That's the proof that the west actually works, and at the time was the only way to fend off the communist hordes.
I wonder what happened to that strategy?
That's the proof that the west actually works, and at the time was the only way to fend off the communist hordes.
I wonder what happened to that strategy?
we’re not in charge anymore
A one bedroom where ?
The issue of cost relativism is key.
In low cost flyover country, mortgages can be cheaper than rent. This is why CAP [1] rates in Middle America are so attractive.
20 an hour would be fine for a one bedroom in many places in lower cost areas.
I don't think 20 an hour will cut it in LA, SF, Seattle, Chicago, Boston, DC, or NYC, but you can always double up.
[1] https://corporatefinanceinstitute.com/resources/knowledge/va...
The issue of cost relativism is key.
In low cost flyover country, mortgages can be cheaper than rent. This is why CAP [1] rates in Middle America are so attractive.
20 an hour would be fine for a one bedroom in many places in lower cost areas.
I don't think 20 an hour will cut it in LA, SF, Seattle, Chicago, Boston, DC, or NYC, but you can always double up.
[1] https://corporatefinanceinstitute.com/resources/knowledge/va...
Didn't people start America because the places they came from hundreds of years ago, Britain, Germany, France etc. were so oppressively unequal with respect to wealth and liberty?
So, hundreds of years later, what have they created? Something better? Something similar? Something same same but different?
https://www.thebalancecareers.com/top-worst-paid-jobs-206169...
So, hundreds of years later, what have they created? Something better? Something similar? Something same same but different?
https://www.thebalancecareers.com/top-worst-paid-jobs-206169...
> Didn't people start America because the places they came from hundreds of years ago, Britain, Germany, France etc. were so oppressively unequal with respect to wealth and liberty?
No not really. As far as I understand it was religious freedom which brought the pilgrims, and then the American revolution was about tyrannical government.
No not really. As far as I understand it was religious freedom which brought the pilgrims, and then the American revolution was about tyrannical government.
The pilgrims and Puritans wanted to practice their own interpretation of Christianity. They did not support any wider concept of religious freedom and had no qualms about persecuting other religious groups like Baptists and Quakers.
If I recall my history classes right, the sorta-free-market startup culture for English new-world colonies to suit each religion is why there were 13 different ones, right? PA for Quakers, MD for Catholics, etc.
It's interesting that the map for minimum wage earner housing affordability is what you might expect (really unaffordable near big metro areas), and kind of smooth gradations. But the "average renter" map has a lot more local variability, with extremely unaffordable metrics for some counties that are really out of the way. What's special in Skamania County, WA, or Pike County, PA, or Park County, CO?
Park County Colorado is in ski country. Low-paying jobs and rich people bidding up what little housing there is.
Ah, I was wondering b/c it's adjacent to Lake County which has both higher median renter wages and substantially cheaper rent.
To add a little to the grandparent, Park County's figures are skewed to the extreme by the Breckenridge/Frisco/Dillon metropolis, which isn't actually in Park County, but rather on its border in neighboring Summit Co.
Breckenridge, Frisco, Dillon, Silverthorne, Keystone, and to some extent Copper Mountain are radiating an insatiable demand for affordable housing. Building is slow due to the mountainous terrain and lots of NIMBYs.
Park county, in contrast, is still a working man's county. The Placer Valley, which lies over Hoosier Pass to the South of Breckenridge, is full of active mines from top to bottom, and South of that lies the vast mountain meadow called South Park. The valley and park can hold Summit's bedroom communities, and they inevitably will. It's just going to take a while to build them up.
Breckenridge, Frisco, Dillon, Silverthorne, Keystone, and to some extent Copper Mountain are radiating an insatiable demand for affordable housing. Building is slow due to the mountainous terrain and lots of NIMBYs.
Park county, in contrast, is still a working man's county. The Placer Valley, which lies over Hoosier Pass to the South of Breckenridge, is full of active mines from top to bottom, and South of that lies the vast mountain meadow called South Park. The valley and park can hold Summit's bedroom communities, and they inevitably will. It's just going to take a while to build them up.
In Park County, CO, a lot of what's available for rent are vacation homes.
And the number of singles is projected to continue to increase. We need to go back to committed relationships again, life is so much easier with 2 incomes.
or we could pay people more so they earn a living wage
This is why using the minimum wage statistics is so misleading.
The minimum wage in my state is just the federal $7.25, but even fast food and big box retail hire people at a minimum of $16/hr, if they can even get them to show up for that anymore.
Nowhere, and I literally mean nowhere, in my area is hiring anyone for "minimum" wage.
The minimum wage in my state is just the federal $7.25, but even fast food and big box retail hire people at a minimum of $16/hr, if they can even get them to show up for that anymore.
Nowhere, and I literally mean nowhere, in my area is hiring anyone for "minimum" wage.
Alternative title: approximately half of workers can't afford an apartment that costs more than average.
If anyone is more knowledgeable than me wrt economics and supply and demand feel free to correct my intuition here:
As long as there's a distinction between "luxury", "average", and "barebones" apartments, it seems unlikely that we'll ever reach a point where everyone (or even, say, 90% of people) can afford a better-than-median apartment. If the number of people who can afford a nicer than average one becomes significantly greater than the supply of above average apartments, some luxury apartments will just increase prices until they hit a more profitable equilibrium.
If anyone is more knowledgeable than me wrt economics and supply and demand feel free to correct my intuition here:
As long as there's a distinction between "luxury", "average", and "barebones" apartments, it seems unlikely that we'll ever reach a point where everyone (or even, say, 90% of people) can afford a better-than-median apartment. If the number of people who can afford a nicer than average one becomes significantly greater than the supply of above average apartments, some luxury apartments will just increase prices until they hit a more profitable equilibrium.
Maybe it's a geographical problem. We live near a mid-sized city (300k people), rents don't seem so bad here. Perhaps it's the bigger cities that have the outrageous rents?