It’s a political issue, well criticised and commented on, that governments intentionally game metrics like inflation, etc to look good on paper for incumbent presidents and heads of state.
Also, the inflation rate is a very inconsistent number, different regions of the US has different rent price increases, different cost of labour increases, different product prices for a lot of goods. How can the nation be entirely ruled by one common inflation rate.
All statistics like this which have to target so many regions, environments, and scenarios, always have to make decisions, that sacrifice some scenario or the other, where the “score” is a very poor indicator
This applies not just to inflation, but other metrics like gdp per capita, employment rate, etc.
There is no need for that condescending tone, especially when the author is talking about their increased cost of living, which prolly hurt their purchasing power.
The reason behind the low consumer sentiment wasn't a flaw in BLS methodology, no one seriously questions any of the stats I mentioned. Rather, it's that the effect of a couple of years of high inflation continued to weigh on consumers. 6 months of low inflation didn't reverse previous price increases, nor did they forget what prices used to be.
And yet, it's fundamental human nature to adapt to circumstances. Consumer sentiment has actually increased substantially in the last 3 months. Source: American consumers are finally cheering up (The Economist - https://archive.is/vJ7gf).
> The rate of improvement is especially striking. The 30% increase since November marks the survey’s biggest rise over any three-month period in more than three decades. The level remains glum by historical standards: about 15% below its average in the five years before the covid-19 pandemic.
In summary, the BLS' methodology to calculate economic indicators is fine. And assuming those indicators continue their trend, it's likely that consumer sentiment will continue to recover.
You also claim that
> Americans have stopped saving and gone so deeply in debt
Except this isn't true? According to surveys conducted by the Federal Reserve (https://www.federalreserve.gov/publications/files/scf23.pdf Page 30), consumer debt has gone down steadily from 2010 to 2022.
At this point, I got to ask - what is your source for facts?
Have they? The personal savings rate is not that much lower than it was between 2000 and ~2019 on average
I did see this a few weeks ago and thought it was interesting - excess saving rates are dropping sharply: https://twitter.com/saxena_puru/status/1747041218004156505
There is another household debt graph that I can't find right now that is going up. I suspect the decline in savings rate is being buoyed somewhat by debt.
And he discussed the used car numbers — such an interesting outlier — as an indicator of supply-side shock.
You can agree or disagree with his Keynesian positions but he’s pretty clear with his thinking and calls out when he was wrong. To the degree macroeconomics can be considered a science, that’s what you want from a scientist, isn’t it?
You’re committing a fallacy of “Appeal to Authority”, even though your comment doesn’t make sense — obviously we need a consistent measure across decades if we want to compare inflation across decades. Comparing two numbers that measure different things is an apples-to-oranges comparison. (Which is what you’re arguing we should do.)
If you use a consistent measure from a 1980s basis, you’ll see that person is correct — as measured using the historic means, we’ve had ~40% inflation in the past few years and the highest rate of inflation in 40 years.
This chart uses the historic measure and bases in 1980.
I'd suggest just referring to the M2 [1]. It is easier to understand, and more available for analysis. Apparently it also gets rid of the stupid "real" price rises that inflation pretends gold is experiencing [2]. It suggests prices should be about 40% higher than pre-pandemic (I checked 2019-11 -> 2023-12) which coincidentally lines up with what justinzollars is reporting.
[0] Well, smoothing in. But the two lines wiggle the same way which suggests we're just using the BLS + an adjustment that is changing in a boring way over time.
[1] https://fred.stlouisfed.org/series/M2SL#0
[2] https://ingoldwetrust.report/chart-m2-gold-ratio/?lang=en
High inflation for consumers, access to low cost of capital for asset holders.
In addition to the erosion of progressive taxation.
Wealth inequality today is growing and is unconscionable, but just to look at the numbers it was far worse in the gilded age (and of course far far worse during slavery). Knowing that is no excuse for not fighting it, but let's not rely on hyperbole to make a point on HN.
> In addition to the erosion of progressive taxation.
I assume you mean that the progressive nature of the tax code is fading away, in which case I agree with you and consider it a terrible problem. In some states like Texas the tax code is actually quite regressive, but overall the whole country gone quite a bit backwards.
Interestingly, California's tax code is both too regressive and too progressive (though both are in principle fixable). Since most people with any wealth hold it in real estate, prob 13 has made homeowners in lucky locations asset rich but at a low tax rate, which is screwing up attempts to improve the housing situation. And I learned it was "too progressive" in 2008: so much of the state's income came from cap gains of rich people and during the real estate crash (leading to stock market woes), state revenues fell just when a surplus was needed. The same thing is happening now, though I expect it to unwind by the end of 2024. That can be fixed as well by changing the tax mix for the top 1% and above, (which is why I put "too progressive" in quotation marks).
I still remember them removing the people who had been out of the job for xx months during the 2008 recession from the 'unemployed' category. 'oh look unemployment is down!'. '...but so is the labor participation rate...'
