How is Inflation Affecting Your Daily Expenses?

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SUMMARY

The discussion centers on the impact of inflation on daily expenses, highlighting significant price increases across various sectors. Participants report rising costs for essential items such as gas, groceries, and rent, with specific examples including a dental cleaning price increase from $120 to $156 and rent for a two-bedroom apartment rising from $1,200 to $1,500. The conversation also touches on "shrinkflation," where products are sold at the same price but with reduced quantities. Key economic indicators such as the Consumer Price Index (CPI) and Producer Price Index (PPI) are referenced, emphasizing the discrepancy between reported inflation rates and actual consumer experiences.

PREREQUISITES
  • Understanding of inflation concepts, including shrinkflation and deflation.
  • Familiarity with economic indicators such as CPI and PPI.
  • Knowledge of the impact of economic policies on consumer prices.
  • Awareness of current economic trends post-pandemic.
NEXT STEPS
  • Research the latest Consumer Price Index (CPI) data from the Bureau of Labor Statistics.
  • Explore the implications of shrinkflation on consumer purchasing behavior.
  • Investigate the effects of pandemic-related economic policies on inflation rates.
  • Learn about the Producer Price Index (PPI) and its relevance to consumer prices.
USEFUL FOR

Economists, financial analysts, consumers tracking inflation, and anyone interested in understanding the economic factors affecting daily expenses.

  • #61
Bystander said:
The lot, tear it down and rebuild...it's the property, not the house itself.
As the saying goes, the three most important factors in real estate are location, location, location.
 
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  • #62
russ_watters said:
I think you have it backwards; it wasn't a rent increase moratorium. Since people weren't paying and they couldn't be evicted, occupancy rates were high and will drop when evictions start up again. Lower occupancy would push prices back down.
That's part of it, but I think you also have some inflationary forces too:
https://www.cnbc.com/2021/08/18/why-rent-is-about-to-go-up-again.html
Throughout 2020, many renters were able to benefit from price reductions or even months of free rent as landlords struggled to fill empty units. But those concessions are more or less gone, and landlords are hiking up prices as Covid-19 restrictions end and housing demand spikes.

Housing costs were rising before Covid, but the Coronavirus exacerbated the problem: The national median rent has increased by 11.4% so far in 2021, compared with just 3.3% for the first six months of 2017, 2018 and 2019, according to a report from Apartment List, a rental listing site. Average rent growth this year is outpacing pre-pandemic levels in 98 of the nation’s 100 largest cities.

Rent is surging for a number of reasons, including more certainty in the job market and young people moving out on their own as pandemic restrictions end, says Nicole Bachaud, a market analyst at Zillow. Many people left cities and others moved in with family members in 2020, but that’s reversing now.
A lot of folks hit hard by the pandemic (esp., in big cities) moved "back home" with their parents/family. Some maybe moved into campers/vans/automobiles (out of desperation and/or a sense of travel adventure) for a while. As the economy has picked back up and as pandemic-related enhanced unemployment officially ends in September throughout the U.S. (GOP states have mostly already ended it - but Democratic states are still allowing it), that could mean people leaving their parents' homes, giving up their campers and moving out of cars, etc. to pick up new jobs and rent a place near those jobs. My thinking was this was one type of re/inflationary force.

On the other hand, you have those folks who were gaming the system now forced to pay rent:


It's hard to say how many of these people there are, but there certainly were some who seemed able to pay rent, but chose to take advantage of the eviction ban to not pay and stay for free. The ERAP program designed to help landlords and tenants can only be initiated by the tenant first. So, if you have a cheating tenant, who has a job and can pay rent, that person is not going to apply for the ERAP program (which would out them as a cheater). This has hurt landlords, who cannot get that rental assistance unless the tenant starts the ERAP process. These individuals will still need a place to stay in the coming months as they are finally evicted (or stay and pay rent and back rent - but I think they were trying to cheat in the first place, so probably won't pay). And, then you also have genuinely financially troubled people who cannot (and could not) pay at all and will be evicted, but still need a place to stay too (maybe having to cohabitate more than they'd like now).

I guess my thinking was that landlords, who can now collect rent (at threat of eviction), have pricing power and will likely use it. Feels like there are a lot of moving parts here and maybe I'm missing some. It's complicated and I think your point is a good one too from a deflationary rent perspective. Certainly not easy to model and predict with various forces and countervailing ones in play.
 
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  • #63
kyphysics said:
It's hard to say how many of these people there are, but there certainly were some who seemed able to pay rent, but chose to take advantage of the eviction ban to not pay and stay for free. The ERAP program designed to help landlords and tenants can only be initiated by the tenant first.
That might be true in the state where that particular landlord lives, but it's not true in general.

https://www.consumerfinance.gov/cor...m_medium=banner&utm_campaign=treasury_banner/

If you’re a landlord, you may think of rental assistance as help for renters. But right now, most federal emergency rental assistance programs accept applications from landlords. Where renters can apply, they often need your help to complete the process and make payments to you.
 
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  • #64
vela said:
That might be true in the state where that particular landlord lives, but it's not true in general.

https://www.consumerfinance.gov/cor...m_medium=banner&utm_campaign=treasury_banner/
But, would the tenant also have to sign/apply at some point too - even if the landlord applies for help? If so, would that lead to the same issue?

Some Googling led me to the following:
https://www.forbes.com/sites/forbes...ce-for-landlords-and-tenants/?sh=9b67ae878268
The carved-out portion for landlords, known as the Emergency Rental Assistance, provides every state a minimum of $200 million with maximum amounts based on the proportion of the population in the state compared to the country’s total population. I’ve put together some common questions around this new stimulus package and resources to help you find answers. . .

The first requirement is that the beneficiary of the grant must be a renter. This will obviously be an easy requirement, but for clarity, the landlord can not apply for rent assistance without a tenant who meets the requirements. In fact, if a landlord does apply for the rent assistance on behalf of the tenant, then the tenant must co-sign the application. A landlord, however, can apply for their own rent assistance in the event they are also a tenant and meet the requirements.
Here was a crazy recent story:
https://finance.yahoo.com/news/over...ate-for-both-renters-landlords-133545275.html
These same property owners, many who continue to work with renters to help them get rent relief, have been frustrated they cannot remove tenants who are unwilling to apply for rental assistance.

For those reasons, a few landlords are actually paying their tenants to leave. Some say they have no wish to keep renting to tenants who have repeatedly shown them that they cannot or will not pay.

“[If] I'm going to evict somebody, but they're not going to be evicted until January next year. And it's going to cost me 3,000 bucks to do that,” First Guardian’s Getty said.

“Would I not be better off just offering three or $4,000 to that tenant and directly bypass the attorney, the eviction process and get them the heck out,” he added.
 
  • #65


 
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  • #66


Interesting thread on the debate between transitory vs persistent inflation.
 
  • #67



Costco inflation for bottled water (Kirkland 40 pack):
$2.79 (early this year)
$2.99 (several months ago - still this year)
$3.19 (this week)

ETA: STILL CHEAPER than everywhere near me, though. Long live Costco!
 
  • #68
  • #69
kyphysics said:
Must be nice to own property.
Get in as early as you can. I know it isn't easy.
 
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  • #71
russ_watters said:
That article does a really poor job of making it clear those are year-over-year, not monthly changes.
Inflation figures should be viewed by default as YOY (if it's MOM, they usually specific that).

Saw this today, by the way:


Core CPI (which is ex-energy and ex-food, b/c those are considered volatile/seasonal) weights shelter at 30-40%, so this will have a big impact later.
 
  • #72
Inflation ran at a fresh 30-year high in August as supply chain disruptions and extraordinarily high demand fueled ongoing price pressures, the Commerce Department reported Friday.

The core personal consumption expenditures price index, which excludes food and energy costs and is the Federal Reserve’s preferred measure of inflation, increased 0.3% for the month and was up 3.6% from a year ago. The monthly gain was slightly higher than the 0.2% Dow Jones estimate and the annual forecast of 3.5%.
https://www.cnbc.com/2021/10/01/key...ederal-reserve-hits-another-30-year-high.html
 
  • #73


I'd rather have that go towards a home mortgage. That car depreciates and dies.



My gallon of regular is $2.99. I don't feel so bad. Some people are paying $5:
1633539872783.png
https://www.cnbc.com/2021/10/06/americans-are-paying-the-most-for-gas-in-seven-years.html
 
  • #74
https://www.cnbc.com/2021/10/13/prices-continue-to-riseheres-whats-getting-the-most-expensive.html
The consumer price index, which measures changes in how much Americans pay for certain goods and services, rose 0.4% in September, the Labor Department reported Wednesday, driven largely by increases in food, shelter and gasoline. Year-over-year, prices increased 5.4%, the largest jump since January 1991.

It’s a continuation of an inflationary trend consumers have experienced for nearly all of 2021. Here’s how much prices have increased over the past year in key categories, according to the Labor Department:

  • Rental cars: 42.9%
  • Gas: 42.1%
  • Used cars: 24.4%
  • Hotels: 18%
  • TVs: 12.7%
  • Furniture: 11.2%
  • Meats, poultry, fish and eggs: 10.5%
  • New cars: 8.7%
  • Appliances: 7.1%
  • Electricity: 5.2%
  • Restaurant prices: 4.7%
  • Rent: 2.9%

Year-over-year figures for September.
 
  • #75


Houses, houses...grab 'em while they're hot.
 
  • #76

It’s important to understand what the cost implications are for consumers with this lack of supply in the supply chain. It’s pure supply and demand economics. Consider volume shipping customers who primarily use ‘general freight’, which is the lowest cost shipping and typically travels in a ‘space available’ fashion. They have usually been able to get their freight moved from origination to delivery within two weeks. Think about how you get your packages from Amazon. Even without paying for Prime, you usually get your stuff in a week. The majority of freight travels at this low cost, ‘no guarantee of delivery date’ way, and for the most part it’s been fine for both shippers and consumers. Those days are coming to an end.

People who want their deliveries in a reasonable time are going to have to start paying premium rates. There will be levels of priority, and each increase in rate premium essentially jumps that freight ahead of all the freight with lower or no premium rates. Unless the lack of shipping infrastructure is resolved, things will back up in a cascading effect to the point where if your products are going general freight, you might wait a month or two for delivery. It’s already starting. If you use truck shipping in any way, you’ve no doubt started to see the delays. Think about what’s going to happen to holiday season shipping.
This is scary. Done your holiday delivery shopping yet?
 
  • #77
FGP_cXVWUAgGZ4Z?format=jpg&name=medium.jpg


No end in sight (yet).

November inflation rose 6.8% y/y (most in 39 years) and 0.8% m/m.
 
  • #78


Maybe I should stock up some supplies on sale. . .
 
  • #79

Oh...the pain!
 
  • #80
 
  • #81
It's like $4.50 for a bag of shrinkflated 7 oz. chips at my local Target. And that's considered ON SALE!
 
  • #82
For me the inflation from the chips has more to do with gravity than currency.
 
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  • #83
hutchphd said:
For me the inflation from the chips has more to do with gravity than currency.
?
 
  • #84
My personal avoirdupois!
 
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  • #86
hutchphd said:
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...
It's commonly known that the liquor industry decreased the pint and half-pint bottle sizes, replacing the pint with 375ml, i.e. 12.68 ounces, i.e. a half-fifth, i.e. a tenth, instead of 16 ounces, and the half-pint with 200ml, i.e. 6.8 ounces, instead of 8 ounces ##-## still, if you go into a liquor store and ask for a pint, you'll get the 375ml bottle in response as if it were a pint, but if you ask for a tenth, you'll get questions about which bottle you mean.
 
  • #87
kyphysics said:
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 ...):
View attachment 285553
Re "Shrinkflation", I've seen a couple of "Lunch Specials" : 50% off any lunch. Where...they give roughly half the usual Lunch amount. And they charge for every little extra: (paraphrase-exaggerated for effect)"Ah, you want a chair? That's going to cost you extra. A plate too? That's also extra, etc.
I felt like I was in a Monty Python skit.
 
  • #88
 
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  • #89
Has anyone changed their shopping habits due to inflation?

I've eaten out a tiny bit less. ...Maybe decreasing by $15/week or so.

Still buying Chick-Fil-A twice a week and the Burger King 2-for-$5 deal once a week as well.
 
  • #90
kyphysics said:
Has anyone changed their shopping habits due to inflation?

I've eaten out a tiny bit less. ...Maybe decreasing by $15/week or so.

Still buying Chick-Fil-A twice a week and the Burger King 2-for-$5 deal once a week as well.
My income has risen in line with NZ's inflation rate, so I'm all good.
 
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