"It's The Economy, Stupid" U.S. Economy Megathread

[Ann 264]

20 hours ago, Chris said:

At my worst, my credit card balance ( just me ) has only been $3,000, which is the limit and I won't raise it any higher. As a family, I'm very sure we don't have a total high balance at all. The wife is pretty diligent about that kind of thing. In the past I haven't worried too much about being on the higher end of my limit, but lately I have been paying better attention to how I use credit. Of course Christmas will come along and then things change, but we pay it down or off as fast as we can after. 

Maybe this year we can try to pay cash more, but with doing most of my shopping on Amazon, it may not work too well. 

Use Amazon and still pay cash, just buy Amazon gift cards.

Edited August 10, 2023 by Ann
spelling correction

[MsKreed 1,185]

1 hour ago, Chris said:

Am I the only one who thinks the AP is doing all they can to not use the word "unemployment" here?

Maybe the psychology is that, by throwing in the word “benefits” it sounds less negative? "Hey look! There's benefits to being jobless!"

Either way, the “unemployment” rate has been misleading for decades. It only counts people during the period they’re eligible to collect UI benefits.

The “unemployment” numbers (jobless benefits) we see reported omit all the people (including homeless) who are quietly listed elsewhere as simply “not participating” in the labor force, rather than “unemployed”.

 

People who haven’t worked steady enough (2 consecutive quarters) to qualify for UI.....aren’t listed as “unemployed”.

People who worked independently (self employed, gig work etc and don't qualify for UI).....aren’t listed as “unemployed”.

People whose UI expired (after 26 weeks) and still haven’t found work.....aren’t listed as “unemployed”.

[Chris 2,168]

I saw somewhere that in order to live the same lifestyle you did in 2021, you’d now need $15,000 more dollars a year.

At first that seemed crazy, but looking at inflation but also “shrinkflation” that’s happening at the same time I’m inclined to believe it.

[MsKreed 1,185]

12 hours ago, Chris said:

I saw somewhere that in order to live the same lifestyle you did in 2021, you’d now need $15,000 more dollars a year.

At first that seemed crazy, but looking at inflation but also “shrinkflation” that’s happening at the same time I’m inclined to believe it.

The cost of the 'Home Alone' grocery trip has nearly doubled in the past year. And we had a spike of higher inflation the year before. 

When you add household bills, gas, clothes and everything else.....I have no doubt that the total for all the goods/services for a household is up $300/week ($15k/yr). 

 

Quote

Items including a half gallon of milk, a half gallon of orange juice, a TV dinner, bread, frozen mac and cheese, laundry detergent, cling wrap, toilet paper, a pack of army men and dryer sheets cost the character, played by Macaulay Culkin, $19.83.

Last year, the same grocery list cost $44.40, and this year, it costs a whopping $72.28 in 2023.

 Source

There seem to be a few competing price estimates, but many of them relied on "generic" brands at Walmart or Aldi to trim this years price down to around $50 to $60. 

While that is, in fact, how many consumers are managing to get by these days, the actual comparison is the kid buying name brand items at a local grocery store in his neighborhood. If he'd had purchased the suggested generic alternatives in 1990, it would have been a lot less then. 

Edited December 10, 2023 by MsKreed

[Chris 2,168]

Quote

 

January's stubbornly high inflation rate was "boosted by a notable uptick in food inflation back to 0.4%," noted Greg Wilensky, head of U.S. fixed income at Janus Henderson Investors, in a Tuesday email, adding, "We have not seen a food inflation print this high since the beginning of last year."

The reason for inflation's stubborn hold on food prices can be linked to a number of issues, from higher labor costs at manufacturers that trickle down to consumers, to record-low cattle numbers that are driving up the cost of beef and steak. 

But some policy experts see other issues at work: Corporations, they claim, are increasing prices simply because they can. President Joe Biden last month warned that companies are "ripping people off" with a combination of price gouging, "greedflation" and shrinkflation. 

Greedflation refers to when companies hike product prices beyond the rate of inflation in order to juice their profits — a concept that Northeastern University economist William Dickens notes has become politicized, with Democrats typically leaning into the idea. Republicans, meanwhile, tend to blame the Biden administration for higher prices. 

What's causing higher food prices

In fact, five types of food have been responsible for 30% of grocery inflation in recent years, the left-leaning think tank Groundwork Collective found in a February report.  They are beef and veal; poultry; non-frozen, non-carbonated juices and drinks; fresh fruits and vegetables; and snacks. 

A few of those categories were among the drivers of January's hike in food prices, with beef and veal jumping 7.7% last month. Frozen non-carbonated drinks like orange juice surged 29% last month on an annual basis, while non-frozen non-carbonated drinks rose 4.2%, the CPI data shows. 

The reason for the hikes may be due to supply issues and climate change, rather than corporate greed. Drought has reduced pasture for raising cows, leading to smaller cattle herds, according to the U.S. Department of Agriculture. And orange production has been impacted by severe weather events and the citrus greening disease, which doesn't have a cure.

 

Read more here.

I heard on NPR a week or two ago that food prices are not included when figuring the rate if inflation, which to me was a shocker. Anyone who's hit the grocery stores lately can tell you that prices are indeed going up, while the overall size or amount you get for the higher price is less. Inflation and shrinkflation all in one. 

Yesterday at Tops I took a glance at eggs, because someone who just started buying from me was surprised at what I charge. ( Or the equivalent, because I trade for beer chips LOL ) They were over 3.00:

So yeah, I'm "selling" them at a loss of at LEAST a buck, and likely more because it costs me more per dozen than a mass production facility, no doubt. I should be charging closer 4.00-5.00, but I'd never sell any at that price. 

Anyhow, the cost of everything is going up, most notably food. I don't know how anyone can say the economy is doing better with a straight face.

[Ann 264]

Also, once prices go up they never go back down.  The economy is definitely not doing better.

[TTL News 308]

Quote

 

WASHINGTON (AP) — Many Americans are in a sour mood about the economy for one main reason: Prices feel too high. 

Maybe they’re not rising as fast as they had been, but average prices are still painfully above where they were three years ago. And they’re mostly heading higher still.

Consider a 2-liter bottle of soda: In February 2021, before inflation began heating up, it cost an average of $1.67 in supermarkets across America. Three years later? That bottle is going for $2.25 — a 35% increase.

Or egg prices. They soared in 2022, then fell back down. Yet they’re still 43% higher than they were three years ago.

Likewise, the average used-car price: It rocketed from roughly $23,000 in February 2021 to $31,000 in April 2022. By last month, the average was down to $26,752. But that’s still up 16% from February 2021.

Wouldn’t it be great if prices actually fell — what economists call deflation? Who wouldn’t want to fire up a time machine and return to the days before the economy rocketed out of the pandemic recession and sent prices soaring?

Many economists caution, though, that consumers should be careful what they wish for. Falling prices across the economy would actually be an unhealthy sign.

 

Read more here. 

[MsKreed 1,185]

Quote

“Although lower prices may seem like a good thing,’’ Banco de España, the Spanish central bank, says on its website, “deflation can in fact be highly damaging to the economy.’’

How so? Mainly because falling prices tend to discourage consumers from spending. Why buy now, after all, if you can purchase what you want — cars, furniture, appliances, vacations — at a lower price later?

Wow. Are there consumers who really believe this line of BS?

Not only do falling prices not discourage consumers....there is a direct correlation that lower prices lead to increased purchases. 

From cars to electronics.....consumers buy more as prices fall. Things that used to be "luxuries" only found in a few households that became commonplace for every family to own more than one.

DVD players, cell phones, TVs – you name it. Remember when a PC cost $5-6k and only a few geeks bought them?  

 

Quote

When the Ford Model T was introduced in 1908, it cost about $950 (nominal dollars), with only 10,000 units produced. By 1924, 2 million units were produced at the cost of $300 each

And here's what the result looked like:

Source

Edited April 1 by MsKreed

[MsKreed 1,185]

[Chris 2,168]

4 minutes ago, MsKreed said:

Wow. Are there consumers who really believe this line of BS?

You gotta love it. 

"Hey we realize that you get less groceries with $100 now than a couple years ago, but it's even worse if the prices go down and you can buy more. Trust us!"

[Chris 2,168]

Sad but true:

[TTL News 308]

Quote

 

WASHINGTON (AP) — A measure of inflation closely tracked by the Federal Reserve remained uncomfortably high in March, likely reinforcing the Fed’s reluctance to cut interest rates anytime soon and underscoring a burden for President Joe Biden’s re-election bid. 

Friday’s report from the government showed that prices rose 0.3% from February to March, the same as in the previous month. It was the third straight month that the index has run at a pace faster than is consistent with the Fed’s 2% inflation target. Measured from a year earlier, prices were up 2.7% in March, up from a 2.5% annual rise in February.

 

Source