US consumers remain unimpressed with this progress, however, because they remember what they were paying for things pre-pandemic. Used car prices are 34% higher, food prices are 26% higher and rent prices are 22% higher than in January 2020, according to our calculations using PCE data.
While these are some of the more extreme examples of recent price increases, the average basket of goods and services that most Americans buy in any given month is 17% more expensive than four years ago.
Americans are right now at some of the best economic times, so that’s surprising
I’m so tired of repeatedly posting this but you fucknuggets just refuse to learn.
America has a ridiculous growth in the number of millionaires these last 10 years.
And nearly ALL of them are children from wealthy families.
They skew the median income bracket making it look like most Americans are making 65k+ a year.
This isn’t the case, and 60% of Americans live paycheck to paycheck.
And people like you are actively trying to hide this.
Look, if the median is 70K it means 50% of households are making this much
That’s what median means
Median as you’re using it doesn’t tell us much beyond a very general bit of information.
For example both of these data sets have 5 as a median. But in the second one you would not say 5 is representative of half the country.
[1,2,3,4,5,6,7,8,9]
[1,1,1,1,5,5,6,8,9]
Yes, but the average is HIGHER than the median so it’s more like [1, 2, 3, 4, 5, 10, 12, 15, 22]
Well yeah, those weren’t meant to be representative. That would look something like,
[1,1,2,2,5,6,7,15,22]
It’s more like [2x10, 3x20, 4x20, 5x10, 6x10, 7x5, 8x5, 9x5, 10x5, 12x5, 13, 15, 20, 40, 200]
The whole point of using median is that 0 is fixed, but the upper bound is not, so median is way better than average.
So sure in your example it is not a good measurement, but your example does not represent the real world distribution.
The real word distribution of wealth is actually kind of insane.
And that’s forcing people into Quintiles. When you look at the income distribution before the median it becomes very clear it’s not a straight slope or at least not in the good way. This was ten years ago. As you can see the median does not represent the mode. Which is what people think of when you say median.
I’ve never heard of anyone mixing up mode and median, it’s always mean and median.
That’s because most people don’t even know what the mode is. I’ve met a depressing number of people who think Median is the science term for the colloquial definition of Average. When you tell them the Mode is literally the spot with the most data points they then need the actual statistics definitions of Median and Average explained.
In this case everyone argues over median and average, not even realizing the mode clearly shows an entire section of our country is hurting really bad.
70k is not enough in many states anymore.
I’m a Europoor, and 70k USD wouldn’t be “comfortable” even here. Maybe in Eastern Europe, but rents and house prices are soaring there as well, so I’m not sure.
That’s right, but the average in those more expensive states is also higher. But I do agree the states that don’t build new housing (the states where rents grow faster) are not affordable
I think you are mistaking median and mean.
https://www.diffen.com/difference/Mean_vs_Median
The median household income is 70K+, not the mean
There is a disconnect between the statistics and reality. I am not sure where, but I suspect inflation is not being calculated correctly. It may be that lower cost items rose at a higher rate, so even though it averages out, it’s harder to reduce spending. 17% doesn’t seem to match the numbers I’ve seen for take out and home prices for example.
At the end of the day, it doesn’t matter what’s on a chart it matters how many things people had to choose to not buy or do because they couldn’t afford it.
Didn’t they just adjust the whole inflation index again to not count a bunch of significant things? It’s a joke.
Same with unemployment. It only counts “able individuals who are actively searching for a job”. A lot of people aren’t included in those numbers when they should be.
The inflation index is and has always been a metric for the rich.
The reason that most of the excluded things are not goods or services the wealthy use is so that those companies can profit more from the already economically burdened all while shaming those same burdened people by saying 'You can’t be struggling, inflation has ONLY been 6%!
Sure for yachts and luxury cars the prices have barely changed but generic meat and fresh vegetables have literally doubled in price in 4 years while the high end offerings have gone up less than 20%.
I’m not sure if that’s actually true, but I’d note that for certain luxury goods, weird things happen with prices. You can wind up in a situation where higher prices make a good more-desirable because it’s more-exclusive, more of a status symbol.
https://en.wikipedia.org/wiki/Veblen_good
For luxuries like that, the price can be largely decoupled from the cost of production, and can instead be linked to ability to pay. Like, if the reason you’re buying something is to show off that you can afford to pay the price, the cost of manufacture may not be what sets the price, even in a competitive market.
That being said, that’s not all that common. It probably doesn’t apply to whole classes of goods, but rather specific things like a brand (since if there’s interest in the thing other than as a status symbol, competitors can produce a cheaper thing and find buyers). And the reason that it can be decoupled from the cost of production is only because the price is well above the cost of production.
CPI does not include yachts in its calculation
Food goes up 20%, Consumer electronics go down 20% and they’ll call it zero inflation. Not an exact example but an illustration of why things dont feel right. The things you have to buy most often are rising faster than the luxuries. Education, Healthcare, Housing it’s a similar story there.
Correction: Food goes up 20%, housing prices go up 80%, Consumer electronics go down 20% and they’ll call it negative inflation. The things most important to people and their biological survival are intentionally not part of the CPI so, they get ignored in most inflation reports.
EDIT: To be clear, the CPI tracks “in-place” or active rent paid by tenants plus utilities (and subsidies, where applicable). It does not track current asking prices or purchase price as it considers purchasing a home to be an investment. This means that it is a very poor way of measuring the housing situation.
Rent/housing is like a third of CPI, it’s already being taken into account. Remember, CPI already talked into account these numbers, including higher food costs. But it also takes into account that energy costs did not increase as quickly. Even if some things went up 30%, if other things go up 10% the average can’t possibly be 30%
Also consumer spending is very strong in America right now, so even if some people can’t afford things, other people are way outspending them
The CPI only takes rental prices into account, not home purchases or rental values. Additionally, it only captures active rentals, not asking prices, meaning that it has significant lag and is a poor indicator for trends in rental prices.
This is true, but the average person is paying a mortgage or rent, not moving every single month so the current rental price is the most relevant to people’s expenses
No, there is a disconnect between statistics and perception.
The statistics are reality.
That is a shocking take in my opinion, one that borders on delusional. Statistics are the result of specific metrics collected by people who chose what specific data points to collect, the methods of collecting those metrics and chose the methods of presenting the data. They can reveal interesting aspects of reality that aren’t otherwise obvious and can depict a fairly accurate representation of reality as a whole if they are created in ernest using sound data collection techniques, but I’m pretty sure that the most qualified data scientists will disagree with the statement that “statistics are reality”. Especially if anyone in control of any part of that process has significant motivation for them to depict something specific.
Statistics are only meaningful when you put them into context of their intent, limitations and error rate.
Lies, damn lies, and statistics
And even if the statistics hold true in aggregate, it’s not the full picture and can’t accurately describe or predict individual experiences. Perception is anecdotal, so it is not a perfect depiction of reality either. But if perception does not match the data, it’s an indicator that the data might be suspect.
Only because scientists are absurdly cautious in nature.
Statistics are reality when compared with a different interpretation that is wildly diverging from all statistics. Fuck the equivocation and the “maybe” and the “suggest that possibly”. On something this stark, we can use very clear language:
The statistics represent reality. The complaining about the economy represents perception.
I feel like you’re putting me in a position to argue against the scientific method, but I don’t think that’s actually the case. Statistics can be scientific, they can also be wrong. The scientific process allows for skepticism. To not consider questioning the methods given opposing perspective is not scientific, it’s dogmatic.
The statistics may very well be accurate, but your level of faith in them is disturbing.
You’re suggesting that since statistics are fallible, it’s entirely possible that the sun doesn’t shine during the day, despite the wealth of evidence that the sun does in fact shine during the day.
No. Fuck that. The cautiousness of the “global warming is just a theory” scientists enabled the regressive anti-science bastards. I’m not placing the whole of the blame on the scientists. I’m just saying that equivocating when there is a preponderance of evidence can have real world harm by giving credence to fabrications.
If we were in a situation where we all agreed on a basic level about the general accuracy of the statistics, then we could drill down into what, specifically, is more accurate than others. I definitely have my qualms about how the CPI is calculated for example, and how the unemployment rate is calculated.
But when we’re in a situation where bad faith actors are trying to discredit the broad findings that all the stats and scientists agree on, we need to close ranks and tell them in no uncertain terms that they are wrong.
Statistics also tell us that murder rates rise when ice cream sales go up.
So if there was a massive ice cream discount in the middle of winter, we should watch out for those murders!
Shh. Grown ups are talking.
I get that CPI is a target for bad faith arguments from people with political agendas, this is because it has been politicized. It’s an important metric for the incumbent to point at to justify their effectiveness if it is favorable. It’s an election year, so that’s even more so the case. It bothers me that it has become such a politicized metric because it can be used to dismiss issues that are of legitimate concern. If the perception doesn’t match the statistics because people are watching doom and gloom on the news then yes, you’re right the statistics are more important than the grumbling of infotainment warriors. However, if the perception differs from the statistics because of personal experience, then it doesn’t matter how well the economy is doing by the numbers overall, the experience of those individuals is still valid. And I am saying from personal experience that it doesn’t feel that my dollars go as far as they used to, enough so that it impacts my options.
The politicization of the statistics concerns me because it is in the best interest of the current administration (whoever that may be) and those advocating for them to dismiss those who are struggling as outliers or bad actors when any kind of national average is going to minimize local or regional factors. It is the politicization of the statistics that makes them more subject to scrutiny in my opinion, especially in a world where natural disasters and extreme weather events are becoming more common place. We may not need the same “basket of goods” as we once did.
I think you’re making a distinction that isn’t there in reality. The “alternative facts” perception isn’t happening organically. People have been manipulated. It’s not that infotainment warriors are doing the grumbling. It’s that infotainment warriors have convinced low-information voters that this is true (and more worryingly for the long term, that they should distrust statistics).