Inflation - Rants & Raves

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I think this topic deserves its own thread after a few mini rants w/ feedback.

Unless you've been living in a cave, you probably have noticed the price of goods and services rising in your daily life at a faster than normal pace. Sometimes it's not an inflation of price, but rather shrinkflation (same price, less product).

What are you paying for everyday items currently (this shall be an ongoing tracker)?

Gas? It's $2.85 here. Medical? My dental cleanings went from $120 to $156. Groceries? Eating Out? Rents? Nice neighborhood 2-bedroom apt. went from $1,200 to $1,500 here. ...etc. Feel free to rant (prices going up) or rave (prices going down) about anything inflation/disinflation/deflation-related you want.
 

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  • #2
George Jones
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So, this thread is not about slowly rolling inflation, it's about something much slower?

More seriously, I think that "Finanical" or "Economic" should be added to the start of the thread's title, as a thread on rants and raves about physics inflation might also be appropriate for the General Discussion Forum of Physics Forums.
 
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  • #3
pbuk
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I am not sure anecdotal "rants and raves" are of much interest to the majority of members of PF; we are naturally inclined towards objective data. In the UK we have access to a great deal of inflation data via the Office of National Statistics - perhaps you have something similar in the US?
 
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  • #4
dlgoff
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I am not sure anecdotal "rants and raves" are of much interest to the majority of members of PF
That and it doesn't do any good anyway.
 
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  • #5
russ_watters
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Unless you've been living in a cave, you probably have noticed the price of goods and services rising in your daily life at a faster than normal pace. Sometimes it's not an inflation of price, but rather shrinkflation (same price, less product).
We'll have to see how things shake out after the pandemic wanes. Some of this is pandemic specific and not really inflation.
 
  • #6
hutchphd
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My rants are far older than the latest round of "whatever the market will bear". Before I depart the planet I would love to be able to again purchase:
  1. A one pound can of coffee (now 11,12,or 13 oz)
  2. A half gallon of ice cream (now 48 oz)
  3. A 16 oz can of corn (now 14.5 oz)
  4. Orange juice half gallon (now 52 oz)
There is no excuse. Froggy in warming water......
 
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  • #7
russ_watters
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My rants are far older than the latest round of "whatever the market will bear". Before I depart the planet I would love to be able to again purchase:
  1. A one pound can of coffee (now 11,12,or 13 oz)
  2. A half gallon of ice cream (now 48 oz)
  3. A 16 oz can of corn (now 14.5 oz)
  4. Orange juice half gallon (now 52 oz)
There is no excuse. Froggy in warming water......
Yep, and soap. Not only did they discontinue Zest (er...re-formulated it so it dissolves), but now bar soaps come in stupid shapes so they can be lighter. Does this really fool anyone/help market them?!!
 
  • #8
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I am not sure anecdotal "rants and raves" are of much interest to the majority of members of PF; we are naturally inclined towards objective data. In the UK we have access to a great deal of inflation data via the Office of National Statistics - perhaps you have something similar in the US?
Both are welcome - anecdotal "data" (for fun rant purposes) and "officially" tracked price data. :cool:

In the U.S., we have the following major indexes:

CPI (Consumer Price Index): https://www.bls.gov/cpi/
PPI (Producer Price Index): https://www.bls.gov/ppi/home.htm
PCE Deflator (Personal Consumption Expenditure): https://www.bea.gov/data/personal-consumption-expenditures-price-index

The BLS tracks CPI and PPI, which most economists use. The BEA tracks PCE, which the Federal Reserve uses and which many economists bemoan understates inflation, due to consumers' two biggest expenditures of housing and healthcare being unrealistically measured using homeowner's equivalent rent and Medicare reimbursement rates, respectively. Most Americans don't pay those rates in reality, so they get eye-rolls from economists. Understating inflation conveniently allows the Fed to keep interest rates low it is argued. If measuring inflation the way it was done pre-1990's in the U.S., it is said we'd be seeing 6%+ annual inflation vs. the roughly 2% (officially stated by the Federal Reserve) for the past decade or two.

I don't have a Bloomberg Terminal or access to other economic data sets, but fintwit*** routinely has "free" posted charts of inflation data on the component level and other related information. Anyone is welcome to post officially tracked data in addition to anecdotal stuff.

***fintwit = financial Twitter ...Raoul Pal has said it's been game-changing, as you have literally the sharpest minds in high finance posting (often anonymously) for the public to see in a highly supportive, collaborative community the likes of which doesn't seem to exist in other fields. It's a great resource. ...You often have heads of various departments of the Big Banks on Wallstreet or some other high finance institution posting in non-competitive/collaborative ways there and answering very complicated questions that likely few other experts have dealt with. Anonymity is key for many (although, many post under real names too), as they are in highly sensitive positions, but Pal has said he's confirmed some of these individuals' identities privately, while others are still anonymous. If used wisely, fintwit can be a great resource and educational tool.
 
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  • #9
ChemAir
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From the CPI:
12-month-percentage-chan.jpeg


My experience with food suggests a great deal more than 2-3%, but that could be mostly COVID production issues, especially meat products.
 
  • #10
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My experience with food suggests a great deal more than 2-3%, but that could be mostly COVID production issues, especially meat products.
If year-over-year food inflation is coming off May 2020's base, then it's possible food had already inflated heavily by then from COVID.

I know paper products (toilet paper, napkins, towels, etc.) and food (esp., meat) were among the first items to inflate last year. Since reported inflation figures are usually YOY (month-over-month exists too, but usually isn't the official reported figure), it may be that you're getting an already high base.

*just speculation - am not sure/have not looked*

I've reported shrinkflation at Chick-Fil-A and Panda Express in the past two months.

eta: There's this chart I've seen (and many others supporting huge food inflation from the producer side...not sure how much is getting passed down on the consumer side, but from news stories, it's happening now already at many chain restaurants .....):
E5UGI7sUYAAQJIk?format=jpg&name=large.jpg
 
  • #11
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https://www.bloomberg.com/news/arti...oost-menu-prices-at-fast-clip-to-recoup-costs
U.S. restaurants, faced with higher food and labor costs, are raising menu prices at a much faster pace than historical rates, insistent on preserving profits after an arduous year.

From local restaurants to national chains like Chipotle Mexican Grill Inc., owners have boosted prices by as much as 5% in the past few weeks alone. Even at fast-food companies that were locked in price wars just a couple of years ago to win over cost-conscious consumers, increases aren’t taboo anymore.

“We are going to be paying higher prices in restaurants,” said David Henkes, senior principal at industry researcher Technomic. “Part of the calculus right now is there’s probably some appetite of consumers to pay whatever because they haven’t been out for a while.”

https://www.foxbusiness.com/features/diners-expect-menu-subsitutions-restaurants-costs-rise
"Right now you’re looking at significant food cost increases -- a case of chicken was $40, now it’s about $130 per case. Prices are going up at about 1.5% or 2% per month. You’re going to start seeing the dumbing down of food [on menus as a way for restaurants] to try to stay ahead of this inflation," Ed Rensi, the former CEO of McDonald’s USA, told FOX Business Thursday.

Data from the U.S. Labor Department’s consumer price index released Thursday shows that prices for products have surged 5% from a year earlier, the biggest increase since the 5.3% surge in August 2008 ahead of the financial crisis.
 
  • #12
russ_watters
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Food production is getting hit coming and going. When the restaurants closed they had to shift to distributing to consumers, and there was a cost and waste associated. Shifting back is another cost. That's in addition to labor problems everywhere. Again, we'll have to see how this all shakes out, but we may well see food prices drop over the next year.

Restaurant prices have some separate/additional issues, but they are still in flux as well. The pandemic era economic stimulus that propped up workers added cost for restaurants and has galvanized support for large minimum wage increases. On the flip side it also accelerated automation to eliminate some of those jobs.
 
  • #13
Vanadium 50
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Note that energy costs went down by ~20% the year before. 20% down and 28% up is +2.4% up. Or 1.2% per year.
 
  • #14
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Food production is getting hit coming and going. When the restaurants closed they had to shift to distributing to consumers, and there was a cost and waste associated. Shifting back is another cost. That's in addition to labor problems everywhere. Again, we'll have to see how this all shakes out, but we may well see food prices drop over the next year.
I'm agnostic on the long-term/sustained inflation vs. deflation debate and find it nice to just be able to vent about current inflation. :-p

I think there are good arguments for both sides. A big factor would be whether we get any further stimulus that puts $ into Main Street's wallets. If so, I would see that leaning towards more sustained general inflation.

re: wage inflation - September marks the end to unemployment-related stimulus, so those earning more on it who return to work may see lower wages. A local restauranteur here was in the news for having to shut down his business until September (when he said he'd reopen). He specifically cited an inability to find workers at a desirable wage he could pay and felt UI was offering people more to not work than work and people were taking advantage. Wage inflation (at least, in lower-income industries) could be coming down after September.

re: housing/rental inflation If the Fed exits QE buying of mortage-backed securities, this could soften some of the inflation in the red hot housing market (albeit, lots of first-time buyers are already priced out). I'm not optimistic on the rental side. I feel like we're getting a repeat of post-2009 crisis buy-to-rent, but with a twist. After the foreclosure crisis, banks and private equity bought up lots of houses for cents on the dollar and continued to buy up new housing to rent them back out to ruined and desperate Americans. A ton of the new housing built right before COVID was going to buy-to-rent demand already. We've seen that continue post-COVID and with more big institution players doing it and buying at massively marked up prices.

Once the dust settles on foreclosure and eviction/rent moratoriums and people have to find a place to live and are returning to work, they may be in for a nasty surprise with rents.

re: oil inflation Wrecked unprofitable U.S. shale companies that kept oil cheap for the past decade won't be around in the coming decade most likely (venture capital and financial institutions aren't pouring money into them anymore) to give us a cheap source of supply, while ESG trends and Go Green movements will depress investment into the space as well. Reduced drilling and capex means less supply as well. The surviving oil producers will have to use their own free cash flow to invest in new drilling, which means prices have to rise to justify expenditures (on top of supply dynamics). I can see sustained oil price inflation going forward.
 
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  • #15
ChemAir
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eta: There's this chart I've seen (and many others supporting huge food inflation from the producer side...not sure how much is getting passed down on the consumer side, but from news stories, it's happening now already at many chain restaurants .....):
View attachment 285553

That also seems to suggest a price increase greater than the 2 or 3 percent as shown in the chart I linked (this looks more like 20-30%+). But I don't know how this is being calculated, and it is international, where the previous chart was US CPI.

My personal wallet says food is up on the order of 15-25%, mostly in the meat department. Hopefully this is primarily a pricing spike.
 
  • #16
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Note that energy costs went down by ~20% the year before. 20% down and 28% up is +2.4% up. Or 1.2% per year.
Yeah, oil's just mostly been recovering. But, I think a good thesis can be made for longer-term sustained higher prices. We'll have to see.

I greatly enjoyed my $1.95 regular pump price last year.
 
  • #17
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My personal wallet says food is up on the order of 15-25%, mostly in the meat department. Hopefully this is primarily a pricing spike.
My Lays chips have BOTH shrinkflated and inflated in price! Their "regular sizes" used to be 9 oz. ...now 7/7.5/8oz. (depending on which month I buy them) AND a higher price!
 
  • #18
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Is it inflation when I shop at Whole Foods for the first time?
 
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  • #19
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https://www.npr.org/sections/money/...re-of-shrinkflation-inflations-devious-cousin
He grabbed an old box of Cocoa Puffs and put it side by side with the new one. Aha! The tip he had received was right on the money. General Mills had downsized the contents of its "family size" boxes from 19.3 ounces to 18.1 ounces.

Dworsky went to the checkout aisle, and both boxes — gasp! — were the same price. It was an open-and-shut case: General Mills is yet another perpetrator of "shrinkflation."
NPR had an article on shrinkflation today.
 
  • #23
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These Rudy Haverstein "New York Fed cartoons" are cute:
 
  • #24
russ_watters
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I think the rent thing is likely to reverse. Right now the vacancy rate is low and the not-paying-rent rate is high, so landlords need to raise rents to pay the bills. After they can evict the non-payers or start collecting rent from them, they will have a downward pressure/incentive.

Also, as my morning commute tells me, driving hasn't recovered much yet, so oil production isn't going to have recovered yet.
 
  • #25
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Also, as my morning commute tells me, driving hasn't recovered much yet, so oil production isn't going to have recovered yet.
Anecdotally, the traffic in my area is almost back to normal. It "feels" about 10% off pre-COVID. Although, with a good number of hybrid WFH arrangements persisting into the reopening phase, I wonder if there simply won't just be a chunk that never goes back to work full-time on-site.

The longer-term thesis for higher oil prices, though, is that supply constraints will outweigh demand dynamics. The slower global pace of vaccinations and new Delta variant wreaking havoc may hamper oil demand for another year though.

This will be fun to track. :)
 

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