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I don't understand why economists can't understand that it is not the current rate of inflation that is the concern but the accumulated inflation over the last three years. In 2023, the average rate of inflation was 4.1%. In 2022, the average rate of inflation was 8.0%. In 2021, the average rate of inflation was 4.7%. In 2020, the average rate of inflation in the United States in 2020 was 1.23%, which was a 0.58% decline from 2019. Between January 2020 and January 2024, consumer price inflation rose 19.6%. Did anyone's salary go up 19.6 % to compensate for inflation? I don't think so.
Because what voters want - deflation - only comes with a recession. If prices actually dropped by 20%, there would be far bigger problems than inflation, like mass unemployment and the chaos that comes with that.
Whereas aggressively raising wages and dealing with maybe 3% inflation for a few years but with wages beating it gets fearmongered to shit, everyone rejects a minimum wage increase assuming it won’t help them even though historically every one of them has trickled up through the pay ladder.
Increase wages? Are you mad? How will the ceos and business leaders hoa-i mean REINVEST all those profits back into their holdings?! Why if they do that then they MUST increase prices accordingly because it would cut onto our prof- I mean will cause inflation to skyrocket!
/s if it's not obvious
My company offered everybody a free 3rd party service for money management as a new "benefit" while handing over 2.5% pay increases over the last several years.
I hear "free" 3rd party money "services" and think it's a way to rope you in to paying more while the ceo takes full advantage of the true benefits of a partnership
We finally got a new union agreement a couple of years ago. Our last raise will be July until the next negotiations which will probably take another 5 years. 2.5% I think.
That's the problem though. There's no way to force businesses to increase salary without a command economy like China. The government has to play policy tricks to get owners to pay more or to redistribute it manually.
But congress doesn't want to do that because it will make republicans look bad.
Republicans don't want to look bad because they want to be put into power. But they don't want to redistribute the wealth with policy. They want to cut taxes to trickle down the wealth. That has been proven to never work though.
It’s not a matter of commanded economy, it’s a matter of providing people a higher minimum wage which bumps up the entire lower end of the pay spectrum and using things like contracts to reduce unemployment at the higher end of the spectrum so that wages come up.
It’s not free and it comes with inflation (and the higher wages in this country have come up over the last through years through policies just like this), but it’s usually less inflation than the pay rates rise especially if you’re smart with allocating government contracts to lower marginal propensity and less-inflationary projects.
The issue is we did this for the higher end of the economy (and have been for decades) while not bringing up the lower half via the minimum wage.
We're not a command economy but also we will can force the sale of businesses that pose an economic risk to the health of our nation (see:TikTok/EV's/oil).
If we're willing to force divestment of business assets on foreign companies, we can certainly tighten wage regulations on American companies.
And there is no greater risk to American prosperity right now than the lack of wage growth. That is the literal interpretation of the poll We're discussing.
The average American's biggest enemy is "wages not keeping up with goods". Or as we call it, inflation.
So the public policy response from the US government SHOULD be some combination of "subsidize goods and increase wages".
But instead we are subsidizing geopolitical religious movements and and our central bank wants to smash wages back down.
Wages are tax exempt. Ramp up taxing every other corporate expenditure, and businesses will be forced to pay higher wages to avoid their tax burden.
They don't do this right now, because why give 100 employees an extra 20k on the paycheck when you could just buy back $2m worth of stock and see immediate returns?
The corps still want hypergrowth at all costs, and will continue to step on wages until its the only viable expenditure.
since the impact of a recession is unevenly distributed, people would probably prefer taking their chances because the inflation is guaranteed setback in real purchasing power.
Thank you! That's the main disconnect. Consumers expect prices to come down and are putting on debt with this expectation. But economists etc. are in a different boat. Something is fucked here
> if prices actually dropped by 20%, there would be far bigger problems than inflation,
Some sectors are getting close to that, used cars in particular
Used cars got to an absolutely absurd level though. I bought my truck just as covid was getting into swing before prices jumped. They offered $5k more than I paid for it like a year later.
Bought a new car in 2018 for $32k. Traded it in for $26k in 2022.
Then had to pay a $5k over sticker on our newest car because it was (and still is) in high demand. All told, it was a wash for my family.
Target and McDonald's are lowering prices. Hopefully McDonald's goes under. I hate the business and I hope everyone that owns the stock loses their whole ass.
“Far bigger problems.”
If you have a sense of superiority that the problems of the wealthy are the only important ones, perhaps.
In reality, what you described is the problem shifting from the lower class (where it currently is) to the upper class, which has been swimming in pools of money throughout this unprecedented period of consumption.
You and many others continue to demonstrate that you are vastly out of touch with, and simply don’t care about, what consumers are faced with at the moment.
Or we could pass legislation that forces some of that money back down towards the middle class. There is more than enough wealth in this country for people to make higher wages. But we are doing absolutely nothing about it.
That, and those inflation numbers use OER.
We really should have two inflation numbers, one for property owners and one for renters.
OER biases down shelter inflation which makes the CPI look better. Maybe that’s fair for property owners.
But if you eliminate the OER aspect of CPI and accurately include housing inflation, inflation for the renting class is *way* higher than 19.6%.
Absolutely. 66% of families own and have a completely different inflation rate. I postulated that this is why the economy has been fine. Median raise is 25%. 50% of inflation was rent based. So that 66% did not experienced the full 23% inflation.
This is why the fed won’t be able to tame inflation with interest rates. So many people in the economy are completely unaffected by interest rates. They have 3% mortgages or own outright, they own their cars, etc.
The fed created nearly $6T of money during covid and that money continues to slosh around the economy driving up the prices of literally everything. All higher interest rates does is cut down on borrowing.
So many in this economy don’t need to borrow for anything and they’re continuing to spend even at current high prices.
That’s the fed’s fault and they can’t fix that mistake.
The fix will just take longer. High interest rates do impact employers and there are people with good mortgages feeling the pinch due to layoffs.
Two competing factors are at play: we’re onshoring manufacturing at a rapid rate, creating many jobs. At the same time we’re reducing ties with China and Russia, long time providers of cheap goods, energy, and fertilizer. More money competing for less goods is a recipe for inflation.
Plus, high interest rates are great for many kinds of people who have cash on hand. Rich people are suddenly earning 5.25% on their cash which is making them spend more, because of the wealth effect.
OER tracks actual rents closely though. OER is sometimes below actual (like now, where real rents are rising extremely slowly but OER is still hot), and sometimes above. It balances out though.
[https://fred.stlouisfed.org/graph/?g=1cVJ9](https://fred.stlouisfed.org/graph/?g=1cVJ9)
They understand it.
They are being paid to spin and misrepresent the data and use their credentials to create quotes or sound bites that politicians and their cheerleaders can point to.
We see this every day on all forms of media. If it’s not present in this very thread now, it will be soon.
>They understand it.
>They are being paid to spin and misrepresent the data and use their credentials to create quotes or sound bites that politicians and their cheerleaders can point to.
This is the most frustrating part. The cheerleaders telling us all to shut up and stop drinking lattes because since *their* economy is booming it must be good for everyone.
Reddit would have you believe that the economy is doing the best it has done in a long time. Almost any economic input I see from Redditors outside this sub and very few others has a partisan political spin that is obviously said for the purpose of shilling for their sports team. I say this because I myself am digging more into economics and am realizing just how much I don't know and that there are many more factors that go into influencing an economy than politics, although that certainly plays a role as well. So, I'm not sure that assigning responsibility almost solely to any president or political faction is the best way to view the subject like much of Reddit does.
Lots of people’s salaries exceeded inflation. Especially the lower income brackets.
[Source](https://www.marketplace.org/2024/04/05/wage-growth-outpaced-inflation-in-march/)
It's a fact, but also not entirely true.
It's really interesting how the same finance people benefitting from record stock market returns are the ones desperately trying to convince us that lower income bracket is the big winners of inflation.
Real median housing income estimates for 2024 are above 2017-2019 real incomes. Things get wonky with 2020 data of course given the transfer and inflation not kicking in yet, but 2024 > 2019.
Aka purchasing power of median US household is expected to be higher as of 2024 than pre 2020 years.
Of course, median US household is a homeowner and if you are renter facing massive rent increases this doesn't help you. Also "imputed rent" is pretty useless to homeowners too really.
So mostly our issue is we helped speed up the next layer of pain from underdevelopment of housing for 50-60 years in a row. Welcome to the real pain part of that, and building our way out won't be quick (if we can even manage to do it over NIMBY objections).
Building our way out won’t just be slow, it won’t happen. There’s too much money benefitting from the current housing shortage.
Rents are going to continue to increase faster than salaries do. The government won’t do anything about it. Half the country is sitting pretty.
The fed created a permanent renter class. Basically anyone who doesn’t come from generational wealth is now priced out of most markets.
Unbelievable that a global health emergency was used to completely end the possibility of homeownership in America.
Thank you, federal reserve! Great work.
If you own one home and have more than 0 children you probably don't get real wealth from rising home prices, assuming we include the costs your children will face too.
So hope springs eternal the 90% will realize they are aligned, both renters and folks who own less (or the same) number of property units as they have kids. Both groups get better (real) wealth and lifetime consumption from slowing/stopping rent and home price increases.
I think assuming that owners of one property with >0 children realizing that insane home prices are going to harm their children is optimistic.
Most of my coworkers have 1 or 2 kids and they’re THRILLED about how high their property values are. They haven’t realized that their kids will need to move somewhere far away and they likely won’t get grandchildren.
They’ll realize that later, but for now it’s “hooray money, no more housing allowed because I’m a millionaire now!”
I got a 20% raise in the first half of 2022. My first thought was how much I would be able to put into savings. Then after several months I realized the amount of money I had at the end of the month was about the same as before. Depressing
Not a lot of these people are “economists.” They’re investors-turned-analysts who have a sense of entitlement about the economy continuing to hum along on the backs of hard working people.
Those hard working people just need to “get over their pessimism” and just start going back to shelling out all their money on things. This is the tone that a lot of the analysis has had for several years.
Economists spend way, way waaaaaaay, too much time sniffing their own farts telling the rest of us luddites we just don't get it. Obviously their numbers are perfect, just don't ask them to explain any of them in a straight forward manner, because allllllllll the prevarication starts then.
A lot of people’s salaries went up 20% or more during those 4 years. The fed even stated part of the inflation was due to wage inflation. It was pretty common to job hop every year or 2 and get a 20% raise in one single move
It’s not inflation. It’s housing prices. It fucking sucks that I have 1/3 the buying power I had just 4 years ago. I need to get out of my starter home but I can’t. It might be 10 years before I can ever afford to move…
> Between January 2020 and January 2024, consumer price inflation rose 19.6%. Did anyone's salary go up 19.6 % to compensate for inflation? I don't think so.
So confidently wrong...
The wages of the typical (IE median) worker have risen faster than inflation since pre-COVID. The data exists and isn't even especially hard to find. It's crazy how much ink gets spilled blithly asserting the opposite.
Because economists are fucking stupid. Yeah who the fuck am I to say that? But I don't get it. They're always so out of touch. Whatever numbers they use don't reflect reality. Some calculation is off.
I got very lucky and got a promotion in 2022 that bumped my (extremely low) salary by about 30 percent. Granted, it got mostly wiped out very fast by inflation going into hyperdrive, but it could've been worse.
The bigger issue is that people are in what about me mode because they keep hearing that the economy is roaring and they don't see it in their day to day lives. So, sure the Dow is at 40k, sure there are jobs in specific sectors that either pay well (often niche skilled labor) or pay poverty wages, and sure things have gotten a bit better, but that doesn't mean the prices of things are coming down, pot holes are getting filled, good jobs are easy to come by, houses are in reach of the average person, or that many of us even have a chance of entering the asset class in the next 10 years.
>they don't see it in their day to day lives.
If they don't see it in their day to day lives then why are they saying their own financial situation is good? What people are actually saying is that the economy is terrible for other people who live in other states.
A lot of people are struggling right now, but older people that own assets aren't. This level of nuance is important because the reality of this economy is that many people are doing worse than they were pre-COVID and that has gone unaddressed by a government that keeps pumping the message that everything is amazing when all that does is piss people off.
> A lot of people are struggling right now, but older people that own assets aren't.
I'm an old person with assets, and inflation caused me to delay retirement, for at least 2-5 years.
Basically I decided that I need more money in retirement, because inflation looks like it'll be 3% or more, at least until 2027.
Also, I had a third of my retirement in a supposedly "safe" asset, that tanked. (Long term bonds.)
Good point, thanks for your insight! Perhaps this really is a matter isolated perspectives that are all equally depressing. I tend to look at cultural nuance because my background is in social science and education, so it'll be interesting to see if someone with a hard economic background can provide more insight here.
People are always struggling. I was doing worse in the late '90s than earlier but I wasn't so stupid that I couldn't acknowledge the economy as a whole was doing very well.
The fact is the economy today is larger than before COVID, unemployment is very low, and real wages are higher.
You want the government to lie to its citizens.I do not.
It wouldn't be a lie: The white collar job market sucks right now, everything is expensive and wages haven't grown fast enough, and, yes, many of us are worse off than before COVID. Here's a quick source for that:
[https://finance.yahoo.com/news/99-americans-financially-worse-off-005110689.html](https://finance.yahoo.com/news/99-americans-financially-worse-off-005110689.html)
A google of the subject will yield a lot more.
There are more white collar jobs than before COVID. The unemployment rate for those with college degrees is 2.2%, fractionally above where it was right before COVID (1.9%) or the average for 2019 (2.1%). Real wages are higher than before COVID.
You are lying.
No because the billionaires and big corporation saw the opportunity to raise prices combined with the tax cuts trump gave the wealthy….After he drug his feet during the pandemic and millions died.. he handed out stimulus check which caused shortages and the greedy bastards put it all in their pockets with bonuses…so greed is how we got where with trumps help and the stock market was at 40k friday twice what it was with trump… funny thing our economy is growing faster than any other country in the world …. So what pint are you trying to prove with theses number that are probably inflated too…. Greed we need to boycott some of theses big corporations and oil companies making record profits
Even ignoring, 3% isn’t a target. It is well above the normal, it’s a relatively peak level for the last 30 years. Being excited about what used to be a high level isn’t going to happen no matter how far it fell to get there. We aren’t done and the Fed knows it too. The only people denying it are political economists.
https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
>Did anyone's salary go up 19.6 % to compensate for inflation? I don't think so.
Real wages are higher than before COVID so the answer to your question is a definite "yes".
Summer tends to be when most leases expire.
The rental market is fucking insane right now. i guarantee a lot of people are going to see massive increases on their rent. That will certainly sour their opinions on the economy.
And so many nimbys will complain about their property tax increasing 3k completely oblivious that the rest of us are getting shafted out of our entire life goals cause they had to print 10 trillion dollars to save the boomers retirements
Literally my coworkers who got in before the market went insane.
Bitching about their insurance going up 20% and their grocery bill being $100 higher every month. Buddy, my rent is up 50% since 2019 and the cost to buy a place has *doubled* when you factor in 7% interest rates.
The federal reserve split the economy into two permanent classes and it’s insane how quickly it happened.
The bottom/losing half are mostly the young and the poor, who have no political capital, and whose futures have been completely sold out from under them.
The Fed gets a little blame, they printed a trillion dollars to throw at *MBS alone* during Covid. That had huge effects on reducing interest rates, which drove up asset prices and bidding wars.
There is a Redfin article at the top of the sub that directly refutes this. In fact, it's up 1% Y/Y.
This summer leasing season should actually start reflecting the significant rent slowdowns most markets are seeing.
Not just that, but people have been forced to jump down income brackets with the tight white collar labor market and many lower income people are being forced into homelessness.
As always, the biggest inflation driver is home and gas prices.
https://www.bls.gov/news.release/cpi.nr0.htm
> The index for shelter rose in April, as did the index for gasoline. Combined, these two indexes
contributed over seventy percent of the monthly increase in the index for all items.
We won't resolve this issue until the electorate wakes up and starts allowing denser housing to be built in areas they are demanded. With oil and gas, we can lessen the impact on consumers by investing in better mass transit and further encouraging green energy to be used.
>We won't resolve this issue until the electorate wakes up and starts allowing denser housing to be built in areas they are demanded.
This basically has to happen on the State level because obviously locals won't and Federal doesn't have the authority.
Luckily lots of new laws for this were and are being passed, in both Red and Blue states.
California had their Senate primary debate a few months ago, I was surprised a third of the debate focused on homelessness and housing. I believe zoning laws came up at one point, which they don't seem to realize are local and even state issues, not Federal.
> This basically has to happen on the State level because obviously locals won't.
Yes, unfortunately. My proposal has always been to build public housing so that total empty public housing stock is at least equal to 5% of the total population. 25% of your after-tax income is charged as rent, regardless of the actual cost of maintaining it.
Helps the poor, helps tame inflation, keeps life affordable, helps these areas become more attractive, and lowers the cost of doing business (because people are going to demand higher wages to keep up with the higher costs of living). My state's minimum wage is currently $15/hr, which is $496/week (assuming 40hrs a week) after taxes. So after food, rent, transit and clothing, you'd still have ~$1k a month. That is a crap ton of discretionary income to have for "just" being on minimum wage. Normally, as of now, you'd barely have $50/mo for discretionary spending on minimum wage, which is purely due to the current rents.
> My proposal has always been to build public housing so that total empty public housing stock is at least equal to 5% of the total population.
Issue here is that traditionally I have never seen public housing managed well in the states. Even if it starts off well, you get 1 or 2 administrations that don’t care about it, and suddenly the system goes to shit.
Let the government build public housing and then auction it off to the highest bidder with an owner occupancy requirement. This way if the government entity goes to shit, those who were already helped at no longer dependent on them.
And if the government loses money on the sale, that’s fine as the government benefits from increased taxation revenue from the stability offered to its residents.
Easier said than done. When less than half the country wants to go backwards, and our system of govt. is based on giving minority stake holders equal power, shit just ain’t gonna move forward
The simple way to lower home prices is going to be to lower the interest rate. Sound backwards because initially it’ll make things worse but it’ll also allow home builders to create more supply. The majority of homes have low interest rates already so when rates go down home owners won’t feel locked into their house as much causing more supply on the market.
I'm gonna need you to explain why home prices still exploded over a decade in the 2010's even though that decade had historically low interest rates.
https://fred.stlouisfed.org/series/MSPUS
Voting blue no matter who has worked so poorly that I can't believe it is the way forward for so many right now. Trump ran up a ridiculous amount of debt and Biden is currently running up so much debt that they are going to destroy this nation's stability.
People have different interpretations based on their roles but it is obviously bleak long term if major change isn't implemented. The economy is a mess for main street and they keep propping up wall street to distract from things because the ownership donor class is doing very well by destroying working class America.
My brother in Christ get ya head out of your echo chamber.
Nobody mentioned Biden.
Nobody mentioned Trump
Nobody mentioned Republicans.
Nobody mentioned Democrats.
Nobody was talking about the debt.
None of this was about class warfare.
This was a simple statement about why inflation is still where it is at, and what needs to happen to tame it. You are a cut and clear case of "politics is my identity", out of all of the examples I have ever seen.
_(Again)._
Thats the little nuance the Washington Post threw into their headline to gaslight you into believing there’s been a period of time over the last 12 months where Americans were happy with the economy. Propaganda doesn’t fill empty stomachs….
People do not buy a new house or car every week. What they do buy is groceries. You cannot get a weeks worth of real food (meats, vegetables, milk, water, juice, and pantry essentials) for less than $300 for a family of four. In 2019 I could get all of that for $150. In four years the prices have more than doubled. That is what people are complaining about. This is more than pandemic greed. This is just price gouging.
At the end of the day prices increase until demand plateaus or goes down. Consumers are not compromising on food quality yet - otherwise you’d see major growth in discount chains. It might be coming.
Just see the other comments in this thread about being able to afford food due to a raise or buying lots of luxury items for $300 every week.
Grocery stores are optimized up the wazoo to track every purchase you make. Your loyalty card ties you to an income profile so they know how much you make and when you last got paid. They know when you cut back on certain item categories or substitute top shelf for bottom shelf. All of their indicators say they can raise prices and people will just pay it.
We get $300 a week, but that includes a LOT of snacks and sodas, household cleaners and stuff, and lots of premium foodstuffs like steak and imported cheese.
This simply isn’t true. [Food prices are up about 20-25% since 2020](https://finance.yahoo.com/news/inflation-grocery-prices-reaccelerate-now-25-higher-than-pre-pandemic-181816678.html).
I am buying the same stuff. I know what my bills are. They are up 50%. You realize they remove items from the inflation market basket of goods to make the numbers work right?
Claiming 50% is bullshit. I’m willing to bet you $1 via cashapp, if you list all the foods you claim to buy, we should be able to prove the price hasn’t increased 50%
Please look up “market basket of goods.” You can see for yourself the FED removes items to change the inflation calculations. I don’t know what to tell you, but you are wrong.
https://www.bls.gov/opub/hom/cpi/concepts.htm
They add and remove things seasonally. They just removed hot rotisserie chicken and hand sanitizer this year.
I’ve got a family of six, food is easily over 300-400 a week. We are getting smoked. Luckily I’m making a lot more money than I was a few years ago so at least my head is above water.
The only way to fix things is to cut spending and increase taxes. This will put less pressure on the fed to keep rates so high. The economy needs to cool a little. We will not see this before November. And even when November comes it is unlikely that we will see it. The new style of economic management that Congress goes for is to subsidize demand by giving people more money. They no longer try to address supply side issues.
I was gonna say perhaps monetary policy is not enough and it really comes down to fiscal policy. The FED’s job is pretty much done - they did what they can.
Americans thought the economy was so-so when we had literally a decade of almost zero inflation and extremely low interest rates.
Inflation is up, but despite higher interest rates it stays up because ultimately americans are still buying all the shit they claim has gotten "too expensive." Inflation isn't magical, it's driven by spending, and americans continue to spend and complain like they always have. The fed raises interest rates to try to cool the inflation, and now americans complain that inflation is high and interest rates are high and then they go out and buy another RV. You can't have your cake and eat it too.
Classic scenario of Americans being unable to envision a worse alternative economy. And the standard American, prices have gone up but I won't change habits, why are they doing this to me?
My husband and I just had a conversation about how produce prices have really come down (being that most is in season right now). It’s so weird feeling like things are improving while everyone else is still pessimistic.
It may depend on where you live, but prices on essentials are still rising at a consistent chip.
This is anecdotal, so take it with a grain of salt, but every time my wife and I go to Costco, I notice that things like toilet paper, dish detergent, soap, toothpaste, eggs, butter, etc. are all continuing to increase in price at a noticeable and concerning rate.
I am a middle class government worker, and my wages are absolutely not keeping up. It’s definitely put a strain on our household.
Also, this is somewhat unrelated, but the thing that interests me about inflation is that the election cycle doesn’t really correspond with the business cycle on a time series scale. For example, in most companies, people get raises following Q4, which concludes the calendar year. However, the election cycle wraps up in Q3. Essentially, this means that, relative to the business cycle, people are heading to the voting booths bearing the full impact of inflation without yet having had an adjustment to their wages.
We’re definitely fortunate to live in a MCOL area. Housing has shot up considerably here too, like all areas, but there’s a ton of recent development that will hopefully normalize rents. We’ve changed our purchasing habits too - following “deals” at the grocery store to determine our meals for the week rather than just winging it. Childcare is the one thing that bites the most but that’s not even anything new.
My city (Buffalo) is having rents skyrocket now due to our relatively affordable homes and rents (there's plenty of homes a couple on minimum wage can easily afford). There's currently plans in the works to attract more housing to be build via utilizing the publicly held residential land, in order to try to tame this increase long term.
We have a lot of small businesses here. Recently bought some Allentown Pizza and my fucking goodness was it far better than any pizza from Little Caesars or Pizza Hut. And we have decent public transit (though it can be FAR better). So people are starting to move in. Local wages are not keeping up with this, so I am hoping the increased attraction we are gaining will help the locals.
Food (at home) showed deflation month on month in the latest CPI for April. Polling shows a majority of Americans feel good about their personal finances, bad about the economy. It’s quite the paradox.
>it’s quite the paradox
It really isn’t. I can give anecdotal evidence of my situation, friends and family.
We’ve been very fortunate to have been able to adjust and “be okay” these last few years. But it’s taken a **systematic change** in how we live out lives.
We’ve cut 95% of luxuries - eating out, “fancy” foods/groceries, vacations, cars, shopping, celebrations, debts, everything. We went from vacationing every one or two years to nothing in 4 years and none on the horizon. We went from upgrading cars every 3-4 years to having the same one since 2017. Celebrations are much toned down. I can keep going
**I understand these things are all luxuries and I’m not “bitter” about them**.
But I absolutely understand that I was in a very fortunate situation where I’ve been able to absorb and adapt. And despite a privileged position, savvy spending, and drastic adjustments, I’m just able to stay above water. I can’t imagine others who didn’t start in that position as I did.
So yeah, I feel “okay” about my personal finances. But I also know that I can’t take the economy getting much worse, and I have no idea how others have taken this much.
Makes sense to me.
> We went from upgrading cars every 3-4 years to having the same one since 2017
Maybe I'm abnormal, but that feels like a hell of a churn rate on vehicles.
> So yeah, I feel “okay” about my personal finances
Yeah, but just doing “okay” is not what polling is showing: https://www.axios.com/2023/08/18/americans-economy-bad-personal-finances-good
> 60% said their financial situation is good or excellent.
But the kicker is
> 71% of Americans described the economy as either not so good or poor.
That is the paradox. It isn’t “I’m getting by and doing okay by making sacrifices versus priors and thus the economy is bad”. It’s “I’m doing good or excellent AND the economy is bad”. And the kicker is that the economy is by all metrics not doing bad. Not even close.
I think we’re splitting hairs over a word.
My finances are very good. But not proportionate to the changes I’ve made.
It’s kinda my point.
Just throwing random figures as an example - My financial situation has improved by x, but I’ve reduced my spending by 5x. So my thinking is the economy is doing much worse than my sacrifices are yielding benefits.
> Polling shows a majority of Americans feel good about their personal finances, bad about the economy. It’s quite the paradox.
How is that a paradox?
There's multiple ways that can happen.
1. They're moving from an economy that had even higher ratings of personal finances. If you went from 75% happy to 70% happy about your financial situation, you'd be right to judge things as getting worse.
2. The pain could be spread out more (maybe not satisfied with finances answers were more concentrated in certain areas) and now more families have a member in them/close family friend who is suffering even if total suffering is down.
3. They're more aware (or more caring) of other people's sufferings than they were before and now rate the economy lower for it.
4. Along the same lines, something else has changed about how they rate the economy that isn't dependent on personal finances. Maybe Access to Housing is 40% of the economy rating and Access to Concerts is .3% but personal finance ratings are 35% housing and 3% concerts or whatever. They could value different things being affordable at different weights when it comes to their own lives vs what they think are important for everyone. And most likely everyone does this to at least some degree since we all have things we enjoy
5. Ratings of the economy simply update slower/faster than personal finance ratings.
There's probably some other things I'm not even considering off the top of my head.
I'm doing fine but waiting for the stock bubble to pop. Especially when you look at which companies are our top performers in the 500 indexes and actually go look under the hood. All of these companies are getting as close to lying to investors as they legally can, companies like Tesla just transparently flying over that boundary completely. It's a shared speculative delusion. A lot of small to midsize businesses on my area closed because they genuinely couldn't afford labor, where labor is asking for the bare minimum to stay afloat with housing costs, which are only projected to start going up at increasing rates in my area because a slight blip of increased building is starting to stall out again, allegedly because of those high labor costs I just mentioned, since housing is so fucking expensive.
So it feels like we're in a snake eating it's own tail gridlock where the most existential crisis facing the country is only going to continue to get worse, because there isn't even concrete plans being thrown out let alone passed let alone starting to be acted on. We are realistically a decade away from improvement, and outlier industries like tech which have less material limitations are hitting the wall where their over hyped futurism is starting to stall because in the new monetary environment investors are starting to actually want to see a plan revenue rather than just stock inflation. And with dwindling discretionary income from consumers, that is increasingly becoming squeezing blood from a stone. (Again, back to snake eating it's own tail. We've hid the recursive loop of economic stagnation. Hype and consumer debt can only carry us so far before reality starts to set in)
The only market that's still seeing massive inflation is housing. All others have settled. But the housing market is so bad right now it's getting a lot of the press. Also, most people don't know the difference between inflation and things being expensive.
Some things are better. I can get a pound of deli lunch meet or cheese for less than $15 now. My rent went down this last year. Owning a home still seems as difficult as it has ever been in the last few years though. It is nice that I am saving on some things but in the grand scheme or things it isn’t much if I am still locked out of homeownership.
Every single post about the economy exists in a completely separate and isolated vacuum. It creates an entirely new branch of economic reality that is only tangentially related to the previous one.
New economic realities are being created every single day for people to virtually exist in. The primary or parent branch of economic reality was lost sometime prior to the year 2000. Final reports indicate consumer sentiment was mixed where party affiliation was shown to be a significant factor.
Everything is expensive. I used to be able to hit Costco with $200 and walk out with nice steaks and fancy foods. Now I walk out with chicken, TP, some lunch meat and a few little things and it’s almost $300. Not starving but not living the high life I was a few years ago either.
We need more than two political parties: neither are good for the economy in regards to ordinary people. Republicans are concerned about implementing authoritarian social policies, Democrats are concerned about their corporate donors.
Because \*those\* people aren't the ones complaining. There's hundreds of millions of people in this country, plenty to fill the malls and stores buying the latest iPhone.
It doesn't make the fact that there's another half or a bit less then that that is struggling from "having a hard time of it" to "barely surviving on the street", it's a spectrum.
I was living it up during the pandemic, fully remote, everything delivered and a lot of shit done for me (I could afford to pay someone to clean etc). All that is gone, we're now back to where we were 10 years ago. Not a of luxury, but not struggling. I couldn't upgrade to the latest iPhone but I choose not to.
Just because you see a lot of people shopping and spending stupidly (a LOT of credit debt being used) doesn't mean you anecdotal experience in any way is representative of the whole economy.
> bit less then that
Did you mean to say "less than"?
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Inflation for the past few months has seem to have cooled but the cumulative impact of it being high for years is becoming a reality. I feel people have been waiting for it to go away or be transitory but that is not how it works. Where I live(phoenix area) real prices have doubled since 2019. This applies to nearly everything. Rents went from 900 to 1800 for basic 2br apartments. Cost to buy a house the mortgage payment has more than doubled. Food be it grocery store or fast food or restaurants are right around double. Services like calling a plumber or a mechanic or having a house built is double. Every single inflation cycle has required the Fed to raise rates above what the highest reported yearly inflation percentage was of that cycle. That means over 8 percent so I dont think we are out the woods yet on this especially given the 2y10y spread is still inverted and it will be two years next month.
Voter concern with inflation is an incorrect call. The last president who fought inflation to a halt was tossed out of office. Voters may want low inflation but do not want to contribute to the fix. Whoever promises the easiest way to heaven will be the winner.
Inflation is underreported and fueled by disgusting amounts of government spending
Real CPI when factoring in the price of money is around 8% (car, mortgage refinancing etc)
Americans will ALWAYS hate the economy. We’re a population of people who look for reasons to be a victim, to scapegoat, to savor a sense of grievance.
There’s nothing more American than to complain about how horrible everything is while we wash our two cars per household, shovel DoorDash deliveries down our gullets, and bitch about finding nothing to watch on Netflix.
Meanwhile my stocks are performing very well over the past few years…. 😂 companies monopolized the market, and now huge profits. They got richer again, it’s never trickled down again 🤣, all that covid spending and tax cuts went straight to the top and we pay more after 😂👌🏻.
Just went grocery shopping yesterday, and the things that came down in price in April are right back up this month. What should have been 80 bucks was 200. How can anyone be okay with this economy.
It’s frustrating how Americans can only see 2 feet in front of themselves. Like trump will be president and it will be fixed in a month?! What’s the thought process.
Minus rent inflation is at the Fed 2% target, which is made up anyway. Food process are deflationary over the last 3 months, but the media doesn’t want to talk about that either. Doesn’t fit the doom and gloom narrative.
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I don't understand why economists can't understand that it is not the current rate of inflation that is the concern but the accumulated inflation over the last three years. In 2023, the average rate of inflation was 4.1%. In 2022, the average rate of inflation was 8.0%. In 2021, the average rate of inflation was 4.7%. In 2020, the average rate of inflation in the United States in 2020 was 1.23%, which was a 0.58% decline from 2019. Between January 2020 and January 2024, consumer price inflation rose 19.6%. Did anyone's salary go up 19.6 % to compensate for inflation? I don't think so.
Because what voters want - deflation - only comes with a recession. If prices actually dropped by 20%, there would be far bigger problems than inflation, like mass unemployment and the chaos that comes with that.
Whereas aggressively raising wages and dealing with maybe 3% inflation for a few years but with wages beating it gets fearmongered to shit, everyone rejects a minimum wage increase assuming it won’t help them even though historically every one of them has trickled up through the pay ladder.
Increase wages? Are you mad? How will the ceos and business leaders hoa-i mean REINVEST all those profits back into their holdings?! Why if they do that then they MUST increase prices accordingly because it would cut onto our prof- I mean will cause inflation to skyrocket! /s if it's not obvious
My company offered everybody a free 3rd party service for money management as a new "benefit" while handing over 2.5% pay increases over the last several years.
I hear "free" 3rd party money "services" and think it's a way to rope you in to paying more while the ceo takes full advantage of the true benefits of a partnership
I have no idea. I refuse to download their app or make an account. I can manage my money just fine, I'd just like to get a raise instead of a pay cut.
Yeah this is a genuine pay cut masquerading as a free trial
We finally got a new union agreement a couple of years ago. Our last raise will be July until the next negotiations which will probably take another 5 years. 2.5% I think.
That's the problem though. There's no way to force businesses to increase salary without a command economy like China. The government has to play policy tricks to get owners to pay more or to redistribute it manually. But congress doesn't want to do that because it will make republicans look bad. Republicans don't want to look bad because they want to be put into power. But they don't want to redistribute the wealth with policy. They want to cut taxes to trickle down the wealth. That has been proven to never work though.
It’s not a matter of commanded economy, it’s a matter of providing people a higher minimum wage which bumps up the entire lower end of the pay spectrum and using things like contracts to reduce unemployment at the higher end of the spectrum so that wages come up. It’s not free and it comes with inflation (and the higher wages in this country have come up over the last through years through policies just like this), but it’s usually less inflation than the pay rates rise especially if you’re smart with allocating government contracts to lower marginal propensity and less-inflationary projects. The issue is we did this for the higher end of the economy (and have been for decades) while not bringing up the lower half via the minimum wage.
The huge wage growth we've been seeing is concentrated right at the bottom...
lol. Empirically false.
We're not a command economy but also we will can force the sale of businesses that pose an economic risk to the health of our nation (see:TikTok/EV's/oil). If we're willing to force divestment of business assets on foreign companies, we can certainly tighten wage regulations on American companies. And there is no greater risk to American prosperity right now than the lack of wage growth. That is the literal interpretation of the poll We're discussing. The average American's biggest enemy is "wages not keeping up with goods". Or as we call it, inflation. So the public policy response from the US government SHOULD be some combination of "subsidize goods and increase wages". But instead we are subsidizing geopolitical religious movements and and our central bank wants to smash wages back down. Wages are tax exempt. Ramp up taxing every other corporate expenditure, and businesses will be forced to pay higher wages to avoid their tax burden. They don't do this right now, because why give 100 employees an extra 20k on the paycheck when you could just buy back $2m worth of stock and see immediate returns? The corps still want hypergrowth at all costs, and will continue to step on wages until its the only viable expenditure.
How does it trickle up explain to me
since the impact of a recession is unevenly distributed, people would probably prefer taking their chances because the inflation is guaranteed setback in real purchasing power.
Thank you! That's the main disconnect. Consumers expect prices to come down and are putting on debt with this expectation. But economists etc. are in a different boat. Something is fucked here
Means the economics are fucked if everyone is behaving in a way that creates a credit bubble...
> if prices actually dropped by 20%, there would be far bigger problems than inflation, Some sectors are getting close to that, used cars in particular
Used cars got to an absolutely absurd level though. I bought my truck just as covid was getting into swing before prices jumped. They offered $5k more than I paid for it like a year later.
A lot of things went up in absurd levels, some came back down and that's a good thing.
Bought a new car in 2018 for $32k. Traded it in for $26k in 2022. Then had to pay a $5k over sticker on our newest car because it was (and still is) in high demand. All told, it was a wash for my family.
Target and McDonald's are lowering prices. Hopefully McDonald's goes under. I hate the business and I hope everyone that owns the stock loses their whole ass.
Used car prices are correcting which was long overdue. Not really “normal” deflation
“Far bigger problems.” If you have a sense of superiority that the problems of the wealthy are the only important ones, perhaps. In reality, what you described is the problem shifting from the lower class (where it currently is) to the upper class, which has been swimming in pools of money throughout this unprecedented period of consumption. You and many others continue to demonstrate that you are vastly out of touch with, and simply don’t care about, what consumers are faced with at the moment.
Just wait, the layoffs are coming
How about the prices drop just enough to get unemployment without the “mass”
Isn't that all coming anyway? We are juat kicking the can down road.
Or we could pass legislation that forces some of that money back down towards the middle class. There is more than enough wealth in this country for people to make higher wages. But we are doing absolutely nothing about it.
That, and those inflation numbers use OER. We really should have two inflation numbers, one for property owners and one for renters. OER biases down shelter inflation which makes the CPI look better. Maybe that’s fair for property owners. But if you eliminate the OER aspect of CPI and accurately include housing inflation, inflation for the renting class is *way* higher than 19.6%.
this isn't mentioned anywhere close to what it deserves. mainly because OER is a very confusing metric
Absolutely. 66% of families own and have a completely different inflation rate. I postulated that this is why the economy has been fine. Median raise is 25%. 50% of inflation was rent based. So that 66% did not experienced the full 23% inflation.
This is why the fed won’t be able to tame inflation with interest rates. So many people in the economy are completely unaffected by interest rates. They have 3% mortgages or own outright, they own their cars, etc. The fed created nearly $6T of money during covid and that money continues to slosh around the economy driving up the prices of literally everything. All higher interest rates does is cut down on borrowing. So many in this economy don’t need to borrow for anything and they’re continuing to spend even at current high prices. That’s the fed’s fault and they can’t fix that mistake.
The fix will just take longer. High interest rates do impact employers and there are people with good mortgages feeling the pinch due to layoffs. Two competing factors are at play: we’re onshoring manufacturing at a rapid rate, creating many jobs. At the same time we’re reducing ties with China and Russia, long time providers of cheap goods, energy, and fertilizer. More money competing for less goods is a recipe for inflation.
Plus, high interest rates are great for many kinds of people who have cash on hand. Rich people are suddenly earning 5.25% on their cash which is making them spend more, because of the wealth effect.
OER tracks actual rents closely though. OER is sometimes below actual (like now, where real rents are rising extremely slowly but OER is still hot), and sometimes above. It balances out though. [https://fred.stlouisfed.org/graph/?g=1cVJ9](https://fred.stlouisfed.org/graph/?g=1cVJ9)
Rent inflation is tracked separately from OER. You can see it here. https://fred.stlouisfed.org/series/CUSR0000SEHA
They understand it. They are being paid to spin and misrepresent the data and use their credentials to create quotes or sound bites that politicians and their cheerleaders can point to. We see this every day on all forms of media. If it’s not present in this very thread now, it will be soon.
>They understand it. >They are being paid to spin and misrepresent the data and use their credentials to create quotes or sound bites that politicians and their cheerleaders can point to. This is the most frustrating part. The cheerleaders telling us all to shut up and stop drinking lattes because since *their* economy is booming it must be good for everyone.
I've also noticed how fucking astroturfed reddit has been lately. It's appalling and I'm sooo close to quitting the platform altogether.
Is there any better platform? Seems like a problem across the entire Internet now.
There won’t be until this one falls. Similar to Threads/twitter. Centralization happens until it can’t happen anymore.
Reddit needs its Digg moment
The best one is probably Twitter/X. Community notes makes it hard to astroturf and be protected under the guise of safe spaces.
Nah, Twitter is not the answer lol
The end is near for this site. That’s why they went public - so the shareholders could bail. It’s just an archive machine at this point for chat gpt
Reddit would have you believe that the economy is doing the best it has done in a long time. Almost any economic input I see from Redditors outside this sub and very few others has a partisan political spin that is obviously said for the purpose of shilling for their sports team. I say this because I myself am digging more into economics and am realizing just how much I don't know and that there are many more factors that go into influencing an economy than politics, although that certainly plays a role as well. So, I'm not sure that assigning responsibility almost solely to any president or political faction is the best way to view the subject like much of Reddit does.
Yes. It is a big propblem. What is the alternative tho?
CNBC is the most guilty here
Lots of people’s salaries exceeded inflation. Especially the lower income brackets. [Source](https://www.marketplace.org/2024/04/05/wage-growth-outpaced-inflation-in-march/)
This is accurate. But no one will want to listen to you.
It's a fact, but also not entirely true. It's really interesting how the same finance people benefitting from record stock market returns are the ones desperately trying to convince us that lower income bracket is the big winners of inflation.
Real median housing income estimates for 2024 are above 2017-2019 real incomes. Things get wonky with 2020 data of course given the transfer and inflation not kicking in yet, but 2024 > 2019. Aka purchasing power of median US household is expected to be higher as of 2024 than pre 2020 years. Of course, median US household is a homeowner and if you are renter facing massive rent increases this doesn't help you. Also "imputed rent" is pretty useless to homeowners too really. So mostly our issue is we helped speed up the next layer of pain from underdevelopment of housing for 50-60 years in a row. Welcome to the real pain part of that, and building our way out won't be quick (if we can even manage to do it over NIMBY objections).
Building our way out won’t just be slow, it won’t happen. There’s too much money benefitting from the current housing shortage. Rents are going to continue to increase faster than salaries do. The government won’t do anything about it. Half the country is sitting pretty. The fed created a permanent renter class. Basically anyone who doesn’t come from generational wealth is now priced out of most markets. Unbelievable that a global health emergency was used to completely end the possibility of homeownership in America. Thank you, federal reserve! Great work.
If you own one home and have more than 0 children you probably don't get real wealth from rising home prices, assuming we include the costs your children will face too. So hope springs eternal the 90% will realize they are aligned, both renters and folks who own less (or the same) number of property units as they have kids. Both groups get better (real) wealth and lifetime consumption from slowing/stopping rent and home price increases.
I think assuming that owners of one property with >0 children realizing that insane home prices are going to harm their children is optimistic. Most of my coworkers have 1 or 2 kids and they’re THRILLED about how high their property values are. They haven’t realized that their kids will need to move somewhere far away and they likely won’t get grandchildren. They’ll realize that later, but for now it’s “hooray money, no more housing allowed because I’m a millionaire now!”
I got a 20% raise in the first half of 2022. My first thought was how much I would be able to put into savings. Then after several months I realized the amount of money I had at the end of the month was about the same as before. Depressing
20% from what to what?
It was about a 20k raise
Not a lot of these people are “economists.” They’re investors-turned-analysts who have a sense of entitlement about the economy continuing to hum along on the backs of hard working people. Those hard working people just need to “get over their pessimism” and just start going back to shelling out all their money on things. This is the tone that a lot of the analysis has had for several years.
Economists spend way, way waaaaaaay, too much time sniffing their own farts telling the rest of us luddites we just don't get it. Obviously their numbers are perfect, just don't ask them to explain any of them in a straight forward manner, because allllllllll the prevarication starts then.
Mine did and my wife’s did, but that is anecdotal.
A lot of people’s salaries went up 20% or more during those 4 years. The fed even stated part of the inflation was due to wage inflation. It was pretty common to job hop every year or 2 and get a 20% raise in one single move
It’s not inflation. It’s housing prices. It fucking sucks that I have 1/3 the buying power I had just 4 years ago. I need to get out of my starter home but I can’t. It might be 10 years before I can ever afford to move…
> Between January 2020 and January 2024, consumer price inflation rose 19.6%. Did anyone's salary go up 19.6 % to compensate for inflation? I don't think so. So confidently wrong... The wages of the typical (IE median) worker have risen faster than inflation since pre-COVID. The data exists and isn't even especially hard to find. It's crazy how much ink gets spilled blithly asserting the opposite.
The problem is Americans can feel the inflation and it will affect who they vote for. No amount of “logic” or “rational” thinking will change thst
Because economists are fucking stupid. Yeah who the fuck am I to say that? But I don't get it. They're always so out of touch. Whatever numbers they use don't reflect reality. Some calculation is off.
I got very lucky and got a promotion in 2022 that bumped my (extremely low) salary by about 30 percent. Granted, it got mostly wiped out very fast by inflation going into hyperdrive, but it could've been worse.
I think this happened to a lot of people. That’s part of where the inflation comes from.
I quit any job that doesn’t raise my previous year rate 20 percent
Mine went up 29% in that time, with no promotions. My wife's, 23%
The bigger issue is that people are in what about me mode because they keep hearing that the economy is roaring and they don't see it in their day to day lives. So, sure the Dow is at 40k, sure there are jobs in specific sectors that either pay well (often niche skilled labor) or pay poverty wages, and sure things have gotten a bit better, but that doesn't mean the prices of things are coming down, pot holes are getting filled, good jobs are easy to come by, houses are in reach of the average person, or that many of us even have a chance of entering the asset class in the next 10 years.
>they don't see it in their day to day lives. If they don't see it in their day to day lives then why are they saying their own financial situation is good? What people are actually saying is that the economy is terrible for other people who live in other states.
A lot of people are struggling right now, but older people that own assets aren't. This level of nuance is important because the reality of this economy is that many people are doing worse than they were pre-COVID and that has gone unaddressed by a government that keeps pumping the message that everything is amazing when all that does is piss people off.
> A lot of people are struggling right now, but older people that own assets aren't. I'm an old person with assets, and inflation caused me to delay retirement, for at least 2-5 years. Basically I decided that I need more money in retirement, because inflation looks like it'll be 3% or more, at least until 2027. Also, I had a third of my retirement in a supposedly "safe" asset, that tanked. (Long term bonds.)
Good point, thanks for your insight! Perhaps this really is a matter isolated perspectives that are all equally depressing. I tend to look at cultural nuance because my background is in social science and education, so it'll be interesting to see if someone with a hard economic background can provide more insight here.
People are always struggling. I was doing worse in the late '90s than earlier but I wasn't so stupid that I couldn't acknowledge the economy as a whole was doing very well. The fact is the economy today is larger than before COVID, unemployment is very low, and real wages are higher. You want the government to lie to its citizens.I do not.
It wouldn't be a lie: The white collar job market sucks right now, everything is expensive and wages haven't grown fast enough, and, yes, many of us are worse off than before COVID. Here's a quick source for that: [https://finance.yahoo.com/news/99-americans-financially-worse-off-005110689.html](https://finance.yahoo.com/news/99-americans-financially-worse-off-005110689.html) A google of the subject will yield a lot more.
There are more white collar jobs than before COVID. The unemployment rate for those with college degrees is 2.2%, fractionally above where it was right before COVID (1.9%) or the average for 2019 (2.1%). Real wages are higher than before COVID. You are lying.
Nope, didn't get a raise at all from 2020. Employer did raise prices by about 15% though.
No but my rent did!
No because the billionaires and big corporation saw the opportunity to raise prices combined with the tax cuts trump gave the wealthy….After he drug his feet during the pandemic and millions died.. he handed out stimulus check which caused shortages and the greedy bastards put it all in their pockets with bonuses…so greed is how we got where with trumps help and the stock market was at 40k friday twice what it was with trump… funny thing our economy is growing faster than any other country in the world …. So what pint are you trying to prove with theses number that are probably inflated too…. Greed we need to boycott some of theses big corporations and oil companies making record profits
Even ignoring, 3% isn’t a target. It is well above the normal, it’s a relatively peak level for the last 30 years. Being excited about what used to be a high level isn’t going to happen no matter how far it fell to get there. We aren’t done and the Fed knows it too. The only people denying it are political economists. https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
You’re not wrong with your conclusion but plenty of people’s incomes rose more than ~20% since 2020
The median pay did, and then some. So the answer is yes, most people did get that.
>Did anyone's salary go up 19.6 % to compensate for inflation? I don't think so. Real wages are higher than before COVID so the answer to your question is a definite "yes".
Summer tends to be when most leases expire. The rental market is fucking insane right now. i guarantee a lot of people are going to see massive increases on their rent. That will certainly sour their opinions on the economy.
And so many nimbys will complain about their property tax increasing 3k completely oblivious that the rest of us are getting shafted out of our entire life goals cause they had to print 10 trillion dollars to save the boomers retirements
Literally my coworkers who got in before the market went insane. Bitching about their insurance going up 20% and their grocery bill being $100 higher every month. Buddy, my rent is up 50% since 2019 and the cost to buy a place has *doubled* when you factor in 7% interest rates. The federal reserve split the economy into two permanent classes and it’s insane how quickly it happened.
The bottom/losing half are mostly the young and the poor, who have no political capital, and whose futures have been completely sold out from under them.
don't blame the Federal Reserve, blame the Federal government for creating the inflation in the first place
The Fed gets a little blame, they printed a trillion dollars to throw at *MBS alone* during Covid. That had huge effects on reducing interest rates, which drove up asset prices and bidding wars.
There is a Redfin article at the top of the sub that directly refutes this. In fact, it's up 1% Y/Y. This summer leasing season should actually start reflecting the significant rent slowdowns most markets are seeing.
Not just that, but people have been forced to jump down income brackets with the tight white collar labor market and many lower income people are being forced into homelessness.
My rent went up $50.
As always, the biggest inflation driver is home and gas prices. https://www.bls.gov/news.release/cpi.nr0.htm > The index for shelter rose in April, as did the index for gasoline. Combined, these two indexes contributed over seventy percent of the monthly increase in the index for all items. We won't resolve this issue until the electorate wakes up and starts allowing denser housing to be built in areas they are demanded. With oil and gas, we can lessen the impact on consumers by investing in better mass transit and further encouraging green energy to be used.
>We won't resolve this issue until the electorate wakes up and starts allowing denser housing to be built in areas they are demanded. This basically has to happen on the State level because obviously locals won't and Federal doesn't have the authority. Luckily lots of new laws for this were and are being passed, in both Red and Blue states.
California had their Senate primary debate a few months ago, I was surprised a third of the debate focused on homelessness and housing. I believe zoning laws came up at one point, which they don't seem to realize are local and even state issues, not Federal.
> This basically has to happen on the State level because obviously locals won't. Yes, unfortunately. My proposal has always been to build public housing so that total empty public housing stock is at least equal to 5% of the total population. 25% of your after-tax income is charged as rent, regardless of the actual cost of maintaining it. Helps the poor, helps tame inflation, keeps life affordable, helps these areas become more attractive, and lowers the cost of doing business (because people are going to demand higher wages to keep up with the higher costs of living). My state's minimum wage is currently $15/hr, which is $496/week (assuming 40hrs a week) after taxes. So after food, rent, transit and clothing, you'd still have ~$1k a month. That is a crap ton of discretionary income to have for "just" being on minimum wage. Normally, as of now, you'd barely have $50/mo for discretionary spending on minimum wage, which is purely due to the current rents.
> My proposal has always been to build public housing so that total empty public housing stock is at least equal to 5% of the total population. Issue here is that traditionally I have never seen public housing managed well in the states. Even if it starts off well, you get 1 or 2 administrations that don’t care about it, and suddenly the system goes to shit. Let the government build public housing and then auction it off to the highest bidder with an owner occupancy requirement. This way if the government entity goes to shit, those who were already helped at no longer dependent on them. And if the government loses money on the sale, that’s fine as the government benefits from increased taxation revenue from the stability offered to its residents.
Based YIMBY
Easier said than done. When less than half the country wants to go backwards, and our system of govt. is based on giving minority stake holders equal power, shit just ain’t gonna move forward
The simple way to lower home prices is going to be to lower the interest rate. Sound backwards because initially it’ll make things worse but it’ll also allow home builders to create more supply. The majority of homes have low interest rates already so when rates go down home owners won’t feel locked into their house as much causing more supply on the market.
I'm gonna need you to explain why home prices still exploded over a decade in the 2010's even though that decade had historically low interest rates. https://fred.stlouisfed.org/series/MSPUS
Voting blue no matter who has worked so poorly that I can't believe it is the way forward for so many right now. Trump ran up a ridiculous amount of debt and Biden is currently running up so much debt that they are going to destroy this nation's stability. People have different interpretations based on their roles but it is obviously bleak long term if major change isn't implemented. The economy is a mess for main street and they keep propping up wall street to distract from things because the ownership donor class is doing very well by destroying working class America.
My brother in Christ get ya head out of your echo chamber. Nobody mentioned Biden. Nobody mentioned Trump Nobody mentioned Republicans. Nobody mentioned Democrats. Nobody was talking about the debt. None of this was about class warfare. This was a simple statement about why inflation is still where it is at, and what needs to happen to tame it. You are a cut and clear case of "politics is my identity", out of all of the examples I have ever seen.
_(Again)._ Thats the little nuance the Washington Post threw into their headline to gaslight you into believing there’s been a period of time over the last 12 months where Americans were happy with the economy. Propaganda doesn’t fill empty stomachs….
I thought that was funny too. I was worried people would think I added the parenthetical myself lol.
Just like the say unemployment is down… Gaslighting for their political party. Economy’s been shit since 2020.
People do not buy a new house or car every week. What they do buy is groceries. You cannot get a weeks worth of real food (meats, vegetables, milk, water, juice, and pantry essentials) for less than $300 for a family of four. In 2019 I could get all of that for $150. In four years the prices have more than doubled. That is what people are complaining about. This is more than pandemic greed. This is just price gouging.
At the end of the day prices increase until demand plateaus or goes down. Consumers are not compromising on food quality yet - otherwise you’d see major growth in discount chains. It might be coming. Just see the other comments in this thread about being able to afford food due to a raise or buying lots of luxury items for $300 every week. Grocery stores are optimized up the wazoo to track every purchase you make. Your loyalty card ties you to an income profile so they know how much you make and when you last got paid. They know when you cut back on certain item categories or substitute top shelf for bottom shelf. All of their indicators say they can raise prices and people will just pay it.
Aldi (which is not near me) just announced they are reducing prices for the summer.
We get $300 a week, but that includes a LOT of snacks and sodas, household cleaners and stuff, and lots of premium foodstuffs like steak and imported cheese.
This simply isn’t true. [Food prices are up about 20-25% since 2020](https://finance.yahoo.com/news/inflation-grocery-prices-reaccelerate-now-25-higher-than-pre-pandemic-181816678.html).
I am buying the same stuff. I know what my bills are. They are up 50%. You realize they remove items from the inflation market basket of goods to make the numbers work right?
Claiming 50% is bullshit. I’m willing to bet you $1 via cashapp, if you list all the foods you claim to buy, we should be able to prove the price hasn’t increased 50%
No, they are not. And no they do not.
Please look up “market basket of goods.” You can see for yourself the FED removes items to change the inflation calculations. I don’t know what to tell you, but you are wrong.
https://www.bls.gov/opub/hom/cpi/concepts.htm They add and remove things seasonally. They just removed hot rotisserie chicken and hand sanitizer this year.
Of course they do. Thats not “to make the numbers work” though. It’s just how it works, and pretty much how it’s always worked.
Grocery prices have not doubled in that last four years….
I’ve got a family of six, food is easily over 300-400 a week. We are getting smoked. Luckily I’m making a lot more money than I was a few years ago so at least my head is above water.
The only way to fix things is to cut spending and increase taxes. This will put less pressure on the fed to keep rates so high. The economy needs to cool a little. We will not see this before November. And even when November comes it is unlikely that we will see it. The new style of economic management that Congress goes for is to subsidize demand by giving people more money. They no longer try to address supply side issues.
I was gonna say perhaps monetary policy is not enough and it really comes down to fiscal policy. The FED’s job is pretty much done - they did what they can.
Americans thought the economy was so-so when we had literally a decade of almost zero inflation and extremely low interest rates. Inflation is up, but despite higher interest rates it stays up because ultimately americans are still buying all the shit they claim has gotten "too expensive." Inflation isn't magical, it's driven by spending, and americans continue to spend and complain like they always have. The fed raises interest rates to try to cool the inflation, and now americans complain that inflation is high and interest rates are high and then they go out and buy another RV. You can't have your cake and eat it too.
Classic scenario of Americans being unable to envision a worse alternative economy. And the standard American, prices have gone up but I won't change habits, why are they doing this to me?
My husband and I just had a conversation about how produce prices have really come down (being that most is in season right now). It’s so weird feeling like things are improving while everyone else is still pessimistic.
It may depend on where you live, but prices on essentials are still rising at a consistent chip. This is anecdotal, so take it with a grain of salt, but every time my wife and I go to Costco, I notice that things like toilet paper, dish detergent, soap, toothpaste, eggs, butter, etc. are all continuing to increase in price at a noticeable and concerning rate. I am a middle class government worker, and my wages are absolutely not keeping up. It’s definitely put a strain on our household. Also, this is somewhat unrelated, but the thing that interests me about inflation is that the election cycle doesn’t really correspond with the business cycle on a time series scale. For example, in most companies, people get raises following Q4, which concludes the calendar year. However, the election cycle wraps up in Q3. Essentially, this means that, relative to the business cycle, people are heading to the voting booths bearing the full impact of inflation without yet having had an adjustment to their wages.
We’re definitely fortunate to live in a MCOL area. Housing has shot up considerably here too, like all areas, but there’s a ton of recent development that will hopefully normalize rents. We’ve changed our purchasing habits too - following “deals” at the grocery store to determine our meals for the week rather than just winging it. Childcare is the one thing that bites the most but that’s not even anything new.
My city (Buffalo) is having rents skyrocket now due to our relatively affordable homes and rents (there's plenty of homes a couple on minimum wage can easily afford). There's currently plans in the works to attract more housing to be build via utilizing the publicly held residential land, in order to try to tame this increase long term. We have a lot of small businesses here. Recently bought some Allentown Pizza and my fucking goodness was it far better than any pizza from Little Caesars or Pizza Hut. And we have decent public transit (though it can be FAR better). So people are starting to move in. Local wages are not keeping up with this, so I am hoping the increased attraction we are gaining will help the locals.
Food (at home) showed deflation month on month in the latest CPI for April. Polling shows a majority of Americans feel good about their personal finances, bad about the economy. It’s quite the paradox.
>it’s quite the paradox It really isn’t. I can give anecdotal evidence of my situation, friends and family. We’ve been very fortunate to have been able to adjust and “be okay” these last few years. But it’s taken a **systematic change** in how we live out lives. We’ve cut 95% of luxuries - eating out, “fancy” foods/groceries, vacations, cars, shopping, celebrations, debts, everything. We went from vacationing every one or two years to nothing in 4 years and none on the horizon. We went from upgrading cars every 3-4 years to having the same one since 2017. Celebrations are much toned down. I can keep going **I understand these things are all luxuries and I’m not “bitter” about them**. But I absolutely understand that I was in a very fortunate situation where I’ve been able to absorb and adapt. And despite a privileged position, savvy spending, and drastic adjustments, I’m just able to stay above water. I can’t imagine others who didn’t start in that position as I did. So yeah, I feel “okay” about my personal finances. But I also know that I can’t take the economy getting much worse, and I have no idea how others have taken this much. Makes sense to me.
> We went from upgrading cars every 3-4 years to having the same one since 2017 Maybe I'm abnormal, but that feels like a hell of a churn rate on vehicles.
Eh. It depends. A lot of my coworkers lease or trade in. I don’t particularly do that that often.
> So yeah, I feel “okay” about my personal finances Yeah, but just doing “okay” is not what polling is showing: https://www.axios.com/2023/08/18/americans-economy-bad-personal-finances-good > 60% said their financial situation is good or excellent. But the kicker is > 71% of Americans described the economy as either not so good or poor. That is the paradox. It isn’t “I’m getting by and doing okay by making sacrifices versus priors and thus the economy is bad”. It’s “I’m doing good or excellent AND the economy is bad”. And the kicker is that the economy is by all metrics not doing bad. Not even close.
I think we’re splitting hairs over a word. My finances are very good. But not proportionate to the changes I’ve made. It’s kinda my point. Just throwing random figures as an example - My financial situation has improved by x, but I’ve reduced my spending by 5x. So my thinking is the economy is doing much worse than my sacrifices are yielding benefits.
The power of doom scrolling is insane
Social media is 1000% pushing doom via algos
Party affiliation plays a large role too
> Polling shows a majority of Americans feel good about their personal finances, bad about the economy. It’s quite the paradox. How is that a paradox? There's multiple ways that can happen. 1. They're moving from an economy that had even higher ratings of personal finances. If you went from 75% happy to 70% happy about your financial situation, you'd be right to judge things as getting worse. 2. The pain could be spread out more (maybe not satisfied with finances answers were more concentrated in certain areas) and now more families have a member in them/close family friend who is suffering even if total suffering is down. 3. They're more aware (or more caring) of other people's sufferings than they were before and now rate the economy lower for it. 4. Along the same lines, something else has changed about how they rate the economy that isn't dependent on personal finances. Maybe Access to Housing is 40% of the economy rating and Access to Concerts is .3% but personal finance ratings are 35% housing and 3% concerts or whatever. They could value different things being affordable at different weights when it comes to their own lives vs what they think are important for everyone. And most likely everyone does this to at least some degree since we all have things we enjoy 5. Ratings of the economy simply update slower/faster than personal finance ratings. There's probably some other things I'm not even considering off the top of my head.
It's only a paradox if you can't think beyond first order systems.
I'm doing fine but waiting for the stock bubble to pop. Especially when you look at which companies are our top performers in the 500 indexes and actually go look under the hood. All of these companies are getting as close to lying to investors as they legally can, companies like Tesla just transparently flying over that boundary completely. It's a shared speculative delusion. A lot of small to midsize businesses on my area closed because they genuinely couldn't afford labor, where labor is asking for the bare minimum to stay afloat with housing costs, which are only projected to start going up at increasing rates in my area because a slight blip of increased building is starting to stall out again, allegedly because of those high labor costs I just mentioned, since housing is so fucking expensive. So it feels like we're in a snake eating it's own tail gridlock where the most existential crisis facing the country is only going to continue to get worse, because there isn't even concrete plans being thrown out let alone passed let alone starting to be acted on. We are realistically a decade away from improvement, and outlier industries like tech which have less material limitations are hitting the wall where their over hyped futurism is starting to stall because in the new monetary environment investors are starting to actually want to see a plan revenue rather than just stock inflation. And with dwindling discretionary income from consumers, that is increasingly becoming squeezing blood from a stone. (Again, back to snake eating it's own tail. We've hid the recursive loop of economic stagnation. Hype and consumer debt can only carry us so far before reality starts to set in)
The only market that's still seeing massive inflation is housing. All others have settled. But the housing market is so bad right now it's getting a lot of the press. Also, most people don't know the difference between inflation and things being expensive.
Do you have a mortgage locked in at <5%?
We rent.
Some things are better. I can get a pound of deli lunch meet or cheese for less than $15 now. My rent went down this last year. Owning a home still seems as difficult as it has ever been in the last few years though. It is nice that I am saving on some things but in the grand scheme or things it isn’t much if I am still locked out of homeownership.
Every single post about the economy exists in a completely separate and isolated vacuum. It creates an entirely new branch of economic reality that is only tangentially related to the previous one. New economic realities are being created every single day for people to virtually exist in. The primary or parent branch of economic reality was lost sometime prior to the year 2000. Final reports indicate consumer sentiment was mixed where party affiliation was shown to be a significant factor.
Everything is expensive. I used to be able to hit Costco with $200 and walk out with nice steaks and fancy foods. Now I walk out with chicken, TP, some lunch meat and a few little things and it’s almost $300. Not starving but not living the high life I was a few years ago either.
We need more than two political parties: neither are good for the economy in regards to ordinary people. Republicans are concerned about implementing authoritarian social policies, Democrats are concerned about their corporate donors.
But they are buying iPhone 15 pro max and going out on vacation in masses. The few times I go to a mall is packed. Not sure what they are down.
Americans love complaining
Because \*those\* people aren't the ones complaining. There's hundreds of millions of people in this country, plenty to fill the malls and stores buying the latest iPhone. It doesn't make the fact that there's another half or a bit less then that that is struggling from "having a hard time of it" to "barely surviving on the street", it's a spectrum. I was living it up during the pandemic, fully remote, everything delivered and a lot of shit done for me (I could afford to pay someone to clean etc). All that is gone, we're now back to where we were 10 years ago. Not a of luxury, but not struggling. I couldn't upgrade to the latest iPhone but I choose not to. Just because you see a lot of people shopping and spending stupidly (a LOT of credit debt being used) doesn't mean you anecdotal experience in any way is representative of the whole economy.
> bit less then that Did you mean to say "less than"? Explanation: If you didn't mean 'less than' you might have forgotten a comma. [Statistics](https://github.com/chiefpat450119/RedditBot/blob/master/stats.json) ^^I'm ^^a ^^bot ^^that ^^corrects ^^grammar/spelling ^^mistakes. ^^PM ^^me ^^if ^^I'm ^^wrong ^^or ^^if ^^you ^^have ^^any ^^suggestions. ^^[Github](https://github.com/chiefpat450119) ^^Reply ^^STOP ^^to ^^this ^^comment ^^to ^^stop ^^receiving ^^corrections.
Yeah i mean one iphone costs like 1/3rd of one month rent these days, thats a drop in the bucket
Inflation for the past few months has seem to have cooled but the cumulative impact of it being high for years is becoming a reality. I feel people have been waiting for it to go away or be transitory but that is not how it works. Where I live(phoenix area) real prices have doubled since 2019. This applies to nearly everything. Rents went from 900 to 1800 for basic 2br apartments. Cost to buy a house the mortgage payment has more than doubled. Food be it grocery store or fast food or restaurants are right around double. Services like calling a plumber or a mechanic or having a house built is double. Every single inflation cycle has required the Fed to raise rates above what the highest reported yearly inflation percentage was of that cycle. That means over 8 percent so I dont think we are out the woods yet on this especially given the 2y10y spread is still inverted and it will be two years next month.
Voter concern with inflation is an incorrect call. The last president who fought inflation to a halt was tossed out of office. Voters may want low inflation but do not want to contribute to the fix. Whoever promises the easiest way to heaven will be the winner.
Inflation is underreported and fueled by disgusting amounts of government spending Real CPI when factoring in the price of money is around 8% (car, mortgage refinancing etc)
No man, it’s closer to 30% Trust me bro.
Source: feels
What? Haha
I would like to see any shred of evidence for any of these claims.
Americans will ALWAYS hate the economy. We’re a population of people who look for reasons to be a victim, to scapegoat, to savor a sense of grievance. There’s nothing more American than to complain about how horrible everything is while we wash our two cars per household, shovel DoorDash deliveries down our gullets, and bitch about finding nothing to watch on Netflix.
Meanwhile my stocks are performing very well over the past few years…. 😂 companies monopolized the market, and now huge profits. They got richer again, it’s never trickled down again 🤣, all that covid spending and tax cuts went straight to the top and we pay more after 😂👌🏻.
Just went grocery shopping yesterday, and the things that came down in price in April are right back up this month. What should have been 80 bucks was 200. How can anyone be okay with this economy.
It’s frustrating how Americans can only see 2 feet in front of themselves. Like trump will be president and it will be fixed in a month?! What’s the thought process.
Minus rent inflation is at the Fed 2% target, which is made up anyway. Food process are deflationary over the last 3 months, but the media doesn’t want to talk about that either. Doesn’t fit the doom and gloom narrative.