Re: Let me simplify it for you...

mark <whitroth@xxxxxxx> wrote:
rkshullat@xxxxxxxxxxxxxxxxx wrote:
mark <whitroth@xxxxxxx> wrote:
David Friedman wrote:
In article <kpSdnTe839B68ibVnZ2dnUVZ_jSdnZ2d@xxxxxxx>,
mark <whitroth@xxxxxxx> wrote:
David Friedman wrote:
In article <tICdncBzhuqULyXVnZ2dnUVZ_vudnZ2d@xxxxxxx>,
mark <whitroth@xxxxxxx> wrote:

How would inflation impact standard of living?

Excuse me? So inflation wouldn't affect your standard of living? So
the insane speculation that led to $4/gal gas, and 25% or more on
the price of food, and the increased cost of heating, doesn't affect
your "standard of living"?
<snip>
"Price of gas" is not the same as "prices in general".
Back to bls.gov... For the U.S. city average:
CPI
2007-01 2008-07 % Chg
209.629 333.147 58.9 Gasoline, unleaded regular

Sorry, here in Chicago you were *lucky* to find $4.05 a gallon in July, or
maybe it was $4.11

I'm not sure whether you're disagreeing with the change or you're
confused about the meaning of CPI. The Consumer Price Index is
designed to measure change. The price of an item or basket of items in a
place or set of places is set to "100" during a particular period. This
becomes the base value against which changes are calculated. For the
above CPIs, if the cost of gasoline in Chicago were typical for the US
(if, I say, IF) and it was $4.11 per gallon in July, then the CPI
indicates that the price would have been 209.629/333.147 * $4.11, or
$2.59, in January of 2007.
One very important note is that the base period is not the same for each
item, basket of items, place or set of places. This means that you can't
meaningfully compare the CPI of, for example, milk in Chicago in January
of 2007 against gasoline in Dallas in July of 2008, or even gasoline in
Chicago against gasoline in Dallas during the same period without
calculations to bring their base periods into alignment.

112.127 117.207 4.5 Nonfrozen noncarbonated juices and drinks
127.038 153.763 21.0 Milk

That's outright bull***. The big supermarket chains, Jewel and Dominick's,
are looking at $4.00/gal for milk. Walgreens and CVS have it as a loss
leader at $2.99

If (again, IF) your area is typical, then the CPI indicates the price
would have been $3.30 in 2007-01 if it were $4.00 in 2008-07. But your
prices seem very high to me. Sam's Club (which doesn't DO loss leaders)
is selling milk for $2.79/gal right now and the typical price at a
regular supermarket is around $3.29-$3.49. I paid $3.99 for organic the
other day, but that was because they gave me a $4.00 box of imported
chocolate truffles for free with the purchase. This made my daughter
Very Happy.

286.172 326.363 14.0 Fresh vegetables

Well, that's a meaningless collection. I assume that included potatoes,
peppers, and tomatoes.... Oh, that's right: at the low-cost fruit market I
go to, 10lbs went from $1.99 to over $3.

The exact mix is in the thousands of pages of documentation on the BLS
web site. It's meant to represent a typical purchase pattern for
consumers. You can drill down to specific vegetables. For instance,
during that period I see that potatoes went up by 30% but that broccoli
dropped by almost 9%. Just because a specific item goes up in price
by a certain percentage doesn't mean that all of them do.
Potatoes != vegetables. Eggs != food. Gasoline != cost of living.
Potatoes are a subset of vegetables, which are a subset of food, which
is a component of the cost of living. Gasoline is a subset of
transportation costs, which is another component of the cost of living.

169.382 229.843 35.7 Eggs
195.694 216.227 10.5 Food at home
203.552 219.181 7.7 All items

For those items, the actual point at which they were half the current
price is:
Gasoline June 2006
Juice Increased 17.2% since December 1997
Milk Increased 53.8% since December 1997
Vegetables May 1994
Eggs June 1995
Food at home August 1986
All items August 1986

BTW, egg prices are amazingly volatile over the last 20 or so years,
swinging both up and down by as much as 40% in a one year period.

I've *never* seen them jump like that before.

I noticed it while I was poking at the stats yesterday. Some of the
changes really stand out:
1983-01 to 1984-01 +54%
1984-01 to 1985-01 -39%
2004-01 to 2005-01 -23%
2007-01 to 2008-01 +35%

1983 to 1985 is particularly interesting because the big jump is
followed by an even bigger drop, so that prices in 1985 end up about
6% lower than they started in 1983.

Robert
--
Robert K. Shull Email: rkshull at rosettacon dot com
.

Quantcast