Inflation Appears to Be Over

[throwitaway222]

The groceries I'm buying now for $4.79 now were $2.49 in 2019. Roughly 90% overall inflation rate for everything I buy since 2019. That being said I decided not to change my habits and preferences - but it's hurting to say the least.

[Dylan16807]

What about all the things you buy that aren't groceries?

[hncensorship69]

I don't understand why this is being downvoted. I'm surprised that people on this site could have lived through covid and still trust anything that comes out of government.

The government has always been incentivized to make inflation numbers lower than they are. There have been numerous changes to CPI methodology, many in just the last few years. Hedonistic adjustments are questionable at best.

Moreover: inflation is a gradient, not a singular vector. You will experience inflation differently depending on where you are in that gradient. Reporting a single number for inflation is about as useful as reporting a single number for the temperature of the planet.

[roflyear]

Well, sure. If you buy the exact same thing and cherry pick - some things are up 100% (or even more!).

But not on average.

[xnx]

I still hold that a huge part of the frustration with price changes over the past four years is people hearing news about inflation and thinking it means prices.

Inflation has returned to normal levels, but I don't think most economists expect prices to broadly decrease. Decreasing prices can be a (very) bad thing.

[glitchc]

Inflation is quite a misunderstood little number. It is actually a measure of the rate of increase in prices i.e. it's a velocity, not a position.

When inflation is low, prices grow slowly over time. When it is high, they grow quickly over time. High inflation over a sustained period of time leads to a meteoric increase in prices.

For prices to decrease, the inflation rate would have to be negative. For them to decrease to pre-pandemic levels, inflation would have to be negative for a sustained period of time.

[rkagerer]

>> hearing news about inflation and thinking it means prices

Well the article does start with "Wholesale prices in October posted their biggest decline in 3½ years, providing another indication that the worst of the inflation surge may have passed".

I don't think anyone expects prices to go down, just to stop going up so fast.

[smeeth]

A little deflation can be fine, good even. Inflation oscillated around 0 for most of American history and our economy did great.

Most gut aversion to deflation comes from great depression PTSD.

[throwitaway222]

People know that, that's not the issue. The issue is that wages over 4 years have not kept pace, which means that not only did they go in the hole (debt) during this time, but they're still either adjusting what they purchase or continuing to slide.

Debt has skyrocketed if anyone's had their head under a rock.

[ActionHank]

Could you please let grocery stores know this, because they think prices are going to the moon.

[recursive]

> people hearing news about inflation and thinking it means prices

Does it not mean prices? Anyway, prices are up. A lot of people are frustrated. I believed inflation was a measure of that, but if inflation is actually something else, it wouldn't make people any less frustrated.

[John7149]

That is BS mantra by economist that failed as entrepreneurs. 1990 to 2010 American booms largely help by lower production prices from China. Your average laptops and computers from the 90s tend to drop prices bigly from $10K mac to somewhere around $2K. Let me know how bad Apple did. Let le know how worst off Americans during those low gas prices and cheap GPUs.

[partiallypro]

Also, prices in some instances increased drastically, let's say something went up 15%-25% in price, and now is going to only go up 3%. That 3% gain is MUCH more than it was before the 15%-25% price increase. Like interest, inflation compounds. This is one reason people are still feeling the pinch of inflation even as it has slowed.

It's hard to explain to people as you've said that prices aren't going to decrease in 95% of instances. Prices are sticky and outside of some goods with high volatility, the prices of 2019 are never coming back. That's a tough position politically too, and one reason I feel despite the economy having done pretty well that Biden is underwater on the economy as a whole. Especially coupled with interest rates rising.

[tempsy]

long term deflation is bad, but a house going from $400k to $1m back to $600k in a few years isn't "a bad thing". same with rents decreasing.

[stuckinhell]

That's because people don't care about the academic definition, they care about direct impact on their lives.

[readthenotes1]

Not credible.

The BLS changed how it measures things so of course inflation went down

https://www.bls.gov/cpi/additional-resources/improvements-cp...

[chrismcb]

Unfortunately inflation will never be over. Some economist somewhere came up with the idea that people need to be encouraged to spend our invest their money. And you can do that by slowly making the cost of things go up, reducing the buying power of a dollar. Which forces you to spend it or save it, Rather than stick it under your mattress. But why? I think most people will want to invest their money. And a few will suck it under their mattress, but enough will want to invest it, to keep it circulating. We really need to stop forcing inflation

[hncensorship69]

Um...inflation is still over 3%. That's using bogus government computed CPI. Well in excess of the 2% target.

Since the fed moved to an average inflation target, shouldn't the fed be targeting sub-2%?

[object-a]

The article is reporting that wholesale prices (measured by the PPI) have declined 0.5% Y/Y. It might take a while to affect CPI, but that would strongly suggest that inflation has reached a turning point.

[ruined]

i'm looking for a new apartment at the moment, and i'm noticing that prices seem to actually be in decline. vacancies are staying open, property managers are anxiously calling me for follow-up if they don't hear back, and generally have a less dismissive attitude than before

i'm not sure if it's just this city (i've moved recently) or if it's something broader

[roflyear]

Commercial RE is a real buyer's market.

[it]

Well sure, because inflation comes from loans, and with high interest rates people are less inclined to take out loans.

[macinjosh]

The damage is here to stay though. Prices stopped going up but they did not go back to where they were.

[norwalkbear]

Only when you manipulated the stats heavily.

The average person is hit hard. at happy hour in the city, tons of white collar workers are bitching about two things inflation and layoffs

[stuckinhell]

Like hell it is, my groceries doubled in price from the orange man era. Eggs in my neighborhood went from $2-5 to now $5-10 dollars.

Inflation is only over if you manipulate the stats, the average person is absolutely reeling. Tiktok is full of videos of people asking how they are coping. Mommy net is the exact same, with people asking for diaper donations at a pace I've never seen before. I've been blessed to work in tech, so I've been donating a couple hundred bucks of diapers!

[alexb_]

The average price of eggs hit a high of $4.83. Eggs were extremely expensive for a very short period of time, but have gone down to normal levels. https://fred.stlouisfed.org/series/APU0000708111

Trying to guess economic sentiment from TikTok is not a good idea.

[yoav]

Inflation isn’t prices. It’s rate of change of prices.

[lambdasquirrel]

Well there you have it, folks. The political people have said inflation is over, therefore it must be over.