Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
No comment on whether I “believe” the numbers. I don’t dispute that they are honestly computed based on their best ability and the complex methods they use. Catch’s post explains the methodology. So I accept them.
Where I wonder … Are they comparing apples to apples? If the quality / flavor of my cereal falls, if the fat content of a pound of sirloin increases, if the nutritional value of a pre-cooked frozen meal is lessened, if containers are more cheaply made and break easier, or if smaller sized packages are no longer available (forcing you to buy more than wanted) … do those changes get reflected in COLA? With beer I try to find 12 fl. oz bottles. But a lot of them are now 11.2 oz. Did the COLA gurus factor that in? And if I’m now doing my own scanning and bagging of groceries shouldn’t that devalue those products compared to their worth when checkout service once taken for granted?
With autos - Do we as consumers realize that they’re in no way comparable to what we bought new just 10 years ago? I’d imagine those COLA figures take into account in price comparisons that a new car today is likely to have factory installed radar, back-up cameras, larger tires and rims, GPS and internet functionality. If they include these new features to a car’s “value” (as I suspect), than the cost increase year to year would appear a lot less on the chart, but would still still ding your pocketbook a whole lot more than 10 years ago. Hard to argue these features don’t increase value / desirability. Few of us would throw them overboard.
Entertainment? How on earth can they get a firm grip on prices? My Disney /Hulu / ESPN pack is constantly being repriced (upward). While more commercials are being inserted into programs. Fewer top quality channels to choose from. So many different “for-purchase” “extras” (that were once included) that it would take a really sophisticated analyst to get to the bottom of it all.
One thing that has offset the cost of living in recent years is that some electronic devices have fallen in price. A cheap cellphone can probably be bought for $35 on Amazon. TV’s have come down in price over the past couple decades. And cellular providers have been in a war to undercut one another so that your voice / data subscription may cost less today than 5-10 years ago.
Big Ten has gone to Peacock for subscription to some of their games. I was wondering if other conferences have gone in this direction ? $8.00 a month , cancel anytime . Just more BS to work through !! Local Friday fish fry has gone up a $1 over the last 12 to 18 months or about 8% increase. Hamburger in local grocery up & down a buck at most. Probably do to cut of meat used. We have noted increase in utilities over the last year. I did convert 2 commodes over to hard water & noted a lot less salt being used & some water as water softener wasn't working as hard.
@hank- In my post to fundly I happened to mention games that retailers play. While that's true enough, you accurately point out that the game playing is present throughout the entire food and other supply chains, not just retailers.
How all of that could be accurately measured by anyone is well beyond my pay grade. So the government just settles on some sort of broad measurement, and of course anyone can then find many exceptions to that reported value. Fundly does have a point, and I agree- the government numbers may be useful for certain overall economic measurements, but bear little resemblance to what we as consumers actually see every day.
@Old Joe . My guess is the CMS just pulls numbers out of some data banks which are not accurate.
Enough with the guessing, please. Not when two minutes of searching can turn up the actual practices one is interested in.
BLS data collectors visit (in person, on the web, or using apps) or call thousands of retail stores, service establishments, rental units, and doctors' offices, all over the United States to obtain information on the prices of the thousands of items used to track and measure price changes in the CPI. We record the prices of about 80,000 items each month, representing a scientifically selected sample of the prices paid by consumers for goods and services purchased.
During each call or visit, the data collector collects price data on a specific good or service that was precisely defined during an earlier visit. If the selected item is no longer available, or if there have been changes in the quality or quantity (for example, a 64-ounce container has been replaced by a 59-ounce container) of the good or service since the last time prices were collected, a new item is selected or the quality change in the current item is recorded.
Prices used to compute the CPI are collected during the entire month. CPI data is published monthly, with the index value representing an estimate of the price level for the month as a whole, rather than a specific date. Since certain prices, particularly gasoline, might move sharply within a month, it is useful to understand the timing of price collection. A month is divided into three pricing periods, each period corresponding to roughly the first ten days, second ten days, or third ten days of the month.
When an item is initiated into the CPI sample, its pricing period is established, and it will be repriced during that same period until it exits the sample after four years. Data collectors have discretion within pricing periods, so they can collect quotes at any time during the period. So, it's not necessarily true that data collection is spread perfectly evenly through the month; however, roughly equal amounts of data are collected in each pricing period. Rent prices are an exception to this, as prices in the rent sample are not divided by pricing periods, and specific rent quotes can be collected at any time during the month.
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.
You and @hank seem to be conflating dollar increases with percentage increases. An item might cost $10 at Aldi and $12 at Safeway, or $10 in Lansing and $12 in U.P. (say, in Houghton, whose cost of living is 17% higher than Lansing's).
If prices everywhere go up 10%, then in the lower priced store (area) the price increases "just" $1, while in the higher priced store (area) the price increases $1.20. Some might look at that and think "20% more", but it's the same percentage increase.
Certainly a $1 increase would represent a higher percentage price hike where prices are cheaper (Aldi, Lansing) than where prices are more expensive (Safeway, Houghton). But why would one expect the dollar increase to be the same in both places?
I don't expect gas prices to go up by just 10¢ a gallon in Honolulu when they go up by a dime in Kalamazoo. There's more to the retail price of gas than the cost of the product itself. There are shipping costs, real estate (gas station) costs, etc. Those aren't fixed; they're going up also, and those costs are higher for Hawaii than elsewhere.
There are differences by region and by retailer. A sampling is not representative if restricted to one store, type of store, or region.
The latest explanation for bad vibes about a good economy by normal criteria is that it’s about the level of prices, not the rate of change. So how much have U.S. prices risen compared with other countries? Answer: almost identical. Clearly Biden’s fault.
Comments
Where I wonder … Are they comparing apples to apples? If the quality / flavor of my cereal falls, if the fat content of a pound of sirloin increases, if the nutritional value of a pre-cooked frozen meal is lessened, if containers are more cheaply made and break easier, or if smaller sized packages are no longer available (forcing you to buy more than wanted) … do those changes get reflected in COLA? With beer I try to find 12 fl. oz bottles. But a lot of them are now 11.2 oz. Did the COLA gurus factor that in? And if I’m now doing my own scanning and bagging of groceries shouldn’t that devalue those products compared to their worth when checkout service once taken for granted?
With autos - Do we as consumers realize that they’re in no way comparable to what we bought new just 10 years ago? I’d imagine those COLA figures take into account in price comparisons that a new car today is likely to have factory installed radar, back-up cameras, larger tires and rims, GPS and internet functionality. If they include these new features to a car’s “value” (as I suspect), than the cost increase year to year would appear a lot less on the chart, but would still still ding your pocketbook a whole lot more than 10 years ago. Hard to argue these features don’t increase value / desirability. Few of us would throw them overboard.
Entertainment? How on earth can they get a firm grip on prices? My Disney /Hulu / ESPN pack is constantly being repriced (upward). While more commercials are being inserted into programs. Fewer top quality channels to choose from. So many different “for-purchase” “extras” (that were once included) that it would take a really sophisticated analyst to get to the bottom of it all.
One thing that has offset the cost of living in recent years is that some electronic devices have fallen in price. A cheap cellphone can probably be bought for $35 on Amazon. TV’s have come down in price over the past couple decades. And cellular providers have been in a war to undercut one another so that your voice / data subscription may cost less today than 5-10 years ago.
We have noted increase in utilities over the last year. I did convert 2 commodes over to hard water & noted a lot less salt being used & some water as water softener wasn't working as hard.
How all of that could be accurately measured by anyone is well beyond my pay grade. So the government just settles on some sort of broad measurement, and of course anyone can then find many exceptions to that reported value. Fundly does have a point, and I agree- the government numbers may be useful for certain overall economic measurements, but bear little resemblance to what we as consumers actually see every day.
Use a discount store such as Aldi or Walmart.
You and @hank seem to be conflating dollar increases with percentage increases. An item might cost $10 at Aldi and $12 at Safeway, or $10 in Lansing and $12 in U.P. (say, in Houghton, whose cost of living is 17% higher than Lansing's).
If prices everywhere go up 10%, then in the lower priced store (area) the price increases "just" $1, while in the higher priced store (area) the price increases $1.20. Some might look at that and think "20% more", but it's the same percentage increase.
Certainly a $1 increase would represent a higher percentage price hike where prices are cheaper (Aldi, Lansing) than where prices are more expensive (Safeway, Houghton). But why would one expect the dollar increase to be the same in both places?
I don't expect gas prices to go up by just 10¢ a gallon in Honolulu when they go up by a dime in Kalamazoo. There's more to the retail price of gas than the cost of the product itself. There are shipping costs, real estate (gas station) costs, etc. Those aren't fixed; they're going up also, and those costs are higher for Hawaii than elsewhere.
There are differences by region and by retailer. A sampling is not representative if restricted to one store, type of store, or region.
https://messaging-custom-newsletters.nytimes.com/dynamic/render?campaign_id=116&emc=edit_pk_20231017&first_send=0&instance_id=105431&nl=paul-krugman&paid_regi=1&productCode=PK&regi_id=22268089&segment_id=147573&te=1&user_id=83d45440ead1d14c2a89a1e7221337d1&uri=nyt://newsletter/4e6687ad-ec48-5b2d-9317-d1fb5847a915
The latest explanation for bad vibes about a good economy by normal criteria is that it’s about the level of prices, not the rate of change. So how much have U.S. prices risen compared with other countries? Answer: almost identical. Clearly Biden’s fault.
https://www.nytimes.com/2023/10/23/opinion/columnists/american-economy-success.html