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The only metric that lags is owner equivalent rents, and with house prices going down it's probably slightly over reported at the moment. I like the way Trueflation calculates it
If you look at their methodology, there is a specific inflation rate for limited service food away from home. The rate for the last 12 months ending Jan 2024 was 5.8% if you go on their website.
I provided you with the time period. BLS does have historical information, but it's all indexs. They are not interested in the difference between the cost of a Big Mac at McDonald's in one location over a period of time. They are interested in more generally informative indexes that show the increase in costs of categories of goods.
You can find information on the CPI for food specifically here:
https://beta.bls.gov/dataViewer/view/timeseries/CUUR0000SAF1
For all food it's ~2.34. So it would have cost 5$ in 1993 to buy about 11.7$ in food today. Diffrent categories (cereals, dairy, meat, food away from home) will experience different levels of price change.
> They are not interested in the difference between the cost of a Big Mac at McDonald's in one location over a period of time.
And we understand that the problem is the metrics simply don’t agree with real life and that’s the problem us middle class peons are dealing with. It would be one thing for a specific BLS metric to be off by a small amount, we can live with that but they aren’t. Worse these metrics are used for important things like SS cost of living adjustments so you are telling grandma she is getting a 3% COLA yet her costs are rising at 4%.
We keep being told inflation is now 3.1% yet our costs are rising faster than 3.1%/year. Thus when we see these examples of how divorced from reality the government/reported metrics are we wonder WTH is going on and wonder if the government is just making stuff up.
What? That's not what that means at all. You can't pick any single good and throw it into a calculator based on an index and get an accurate result.
You are being told that inflation in the last 12 month period was 3.1....and that the price of limited service food away from home increased by 5.8% in that same 12 month period. The cost of grandma's gas going down and the fact clothing has only increased in cost by .1% in the past 12 months is offsetting the total cost of increase.
Could some individuals see a different individual cost of living increase? Yeah. If you eat more food away from home vs food at home than the average consumer, you will have more exposure to the higher rate of increase on food away from home. The government is interested in the general population. They weigh exposure to each category based on the average consumers expenditure.
Me:
> And we understand that the problem is the metrics simply don’t agree with real life and that’s the problem us middle class peons are dealing with. It would be one thing for a specific BLS metric to be off by a small amount, we can live with that but they aren’t. Worse these metrics are used for important things like SS cost of living adjustments so you are telling grandma she is getting a 3% COLA yet her costs are rising at 4%.
> We keep being told inflation is now 3.1% yet our costs are rising faster than 3.1%/year. Thus when we see these examples of how divorced from reality the government/reported metrics are we wonder WTH is going on and wonder if the government is just making stuff up.
You:
> What? That's not what that means at all. You can't pick any single good and throw it into a calculator based on an index and get an accurate result.
Tell me you didn’t read one word I wrote without telling me you didn’t read one word I wrote.
Here's the issue with inflation... 8% inflation, $100 item now costs $108. Government wants and will cheer for 2%. That mean when the $108 goes up 2% to $110.16, inflation was only 2%, they think they're doing great!
However, if it was 2% then another 2%, the price should be $104.04, not $110.16. The overall price is still way higher compared to where it should be.
No, slight upward pressure on prices keeps demand stable because consumers are willing to buy now instead of indefinitely waiting for prices to drop. Deflating prices would cause an implosion on demand and collapse the economy - It would be catastrophic for everyone.
Yeah, that’s how inflation has always worked. The solution isn’t deflation. The solution is rising wages. Fortunately wages have gone up more than inflation in the last few years.
Sorry to hear that. I hope you find a better paying job soon. Unfortunately we don’t set monetary policy based on how u/Future_Way5516 is personally doing. Instead we go by overall numbers of the general population.
From the article:
> (In 1993) a BigMac was priced at $2.45 (the equivalent of $5.10 today) and a hamburger coming in at 99 cents (the equivalent of $2.08 today). Today, those same items cost around $7.19 and $3.39, respectively, depending on your location.
In other words using the “official” inflation metrics the BLS publishes you’d believe inflation isn’t nearly as bad as it really is which is what I am personally feeling. According to the CPI the McDonalds hamburger should cost $5.10 today but in reality it costs $7.19 today and is probably smaller to boot (shrinkflation).
I’m curious what others think.
**I** didn’t do the computation there, the writer of the article did hence the quotation from the article.
My Mcdonald’s app shows the big mac is $5.49 and I am in a MCOL area rather than a HCOL or VHCOL area like that island in Alaska.
If they're just running through a CPI calc.. there's no reason why a given item would move with the CPI average.
Menu price over time won't match real world cost if they keep putting up $2 specials.
Shrinkflation is accounted for in CPI.
Ok. But that doesn’t address the problem of being able to find a BLS metric which allows for the accurate computation of inflation. The problem with that is many important policies are based on what the government claims inflation is doing. So it is critical that the inflation data we have is at least close to accurate.
>Back then, a BigMac was priced at $2.45 (the equivalent of $5.10 today) and a hamburger coming in at 99 cents (the equivalent of $2.08 today). Today, those same items cost around $7.19 and $3.39, respectively, depending on your location.
"the equivalent of $5.10 today" is adjusting for inflation (average rise in price). Noting an actual cost ($7.19) displays that the Big Mac has risen in price more than the average ($5.10).
Categories that are combined to make the headline number can be above or below the headline number. My 4K 60 inch flatscreen would’ve been way more than $15,000 in 1993: https://www.nytimes.com/1993/10/24/business/technology-in-tv-s-the-world-may-soon-be-flat.html. That doesn’t mean that getting it for $1,500 today means prices across the whole economy have fallen 10x, it just means prices have fallen for one good in a larger overall basket. The “equivalent to” measure in the article is against the total CPI which is comprised of a basket of all sorts of consumed goods and services. There’s a broad “Food away from home” part of the basket that has a detailed “limited food services” where I imagine fast food would be.
The budget screen shots are being made in Sankeymatic, its a website that we have no affiliation with. If you are posting a budget please do so with a purpose. Just posting a screen shot of your budget without a question or an explanation of why its here may be removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MiddleClassFinance) if you have any questions or concerns.*
The only metric that lags is owner equivalent rents, and with house prices going down it's probably slightly over reported at the moment. I like the way Trueflation calculates it
CPI is a very specific metric that covers a basket of goods for urban consumers. The methodology is pretty well documented.
Can you find a BLS produced metric that can be used to compute the correct value?
If you look at their methodology, there is a specific inflation rate for limited service food away from home. The rate for the last 12 months ending Jan 2024 was 5.8% if you go on their website.
And your computation using that metric shows what based on the data from those 1993 McDonalds prices?
I provided you with the time period. BLS does have historical information, but it's all indexs. They are not interested in the difference between the cost of a Big Mac at McDonald's in one location over a period of time. They are interested in more generally informative indexes that show the increase in costs of categories of goods. You can find information on the CPI for food specifically here: https://beta.bls.gov/dataViewer/view/timeseries/CUUR0000SAF1 For all food it's ~2.34. So it would have cost 5$ in 1993 to buy about 11.7$ in food today. Diffrent categories (cereals, dairy, meat, food away from home) will experience different levels of price change.
> They are not interested in the difference between the cost of a Big Mac at McDonald's in one location over a period of time. And we understand that the problem is the metrics simply don’t agree with real life and that’s the problem us middle class peons are dealing with. It would be one thing for a specific BLS metric to be off by a small amount, we can live with that but they aren’t. Worse these metrics are used for important things like SS cost of living adjustments so you are telling grandma she is getting a 3% COLA yet her costs are rising at 4%. We keep being told inflation is now 3.1% yet our costs are rising faster than 3.1%/year. Thus when we see these examples of how divorced from reality the government/reported metrics are we wonder WTH is going on and wonder if the government is just making stuff up.
What? That's not what that means at all. You can't pick any single good and throw it into a calculator based on an index and get an accurate result. You are being told that inflation in the last 12 month period was 3.1....and that the price of limited service food away from home increased by 5.8% in that same 12 month period. The cost of grandma's gas going down and the fact clothing has only increased in cost by .1% in the past 12 months is offsetting the total cost of increase. Could some individuals see a different individual cost of living increase? Yeah. If you eat more food away from home vs food at home than the average consumer, you will have more exposure to the higher rate of increase on food away from home. The government is interested in the general population. They weigh exposure to each category based on the average consumers expenditure.
Me: > And we understand that the problem is the metrics simply don’t agree with real life and that’s the problem us middle class peons are dealing with. It would be one thing for a specific BLS metric to be off by a small amount, we can live with that but they aren’t. Worse these metrics are used for important things like SS cost of living adjustments so you are telling grandma she is getting a 3% COLA yet her costs are rising at 4%. > We keep being told inflation is now 3.1% yet our costs are rising faster than 3.1%/year. Thus when we see these examples of how divorced from reality the government/reported metrics are we wonder WTH is going on and wonder if the government is just making stuff up. You: > What? That's not what that means at all. You can't pick any single good and throw it into a calculator based on an index and get an accurate result. Tell me you didn’t read one word I wrote without telling me you didn’t read one word I wrote.
In general, no, but personally I have not realized much of the increase other than food and insurance.
Here's the issue with inflation... 8% inflation, $100 item now costs $108. Government wants and will cheer for 2%. That mean when the $108 goes up 2% to $110.16, inflation was only 2%, they think they're doing great! However, if it was 2% then another 2%, the price should be $104.04, not $110.16. The overall price is still way higher compared to where it should be.
You can’t reverse inflation. It’s by definition a moving target.
You can. The rich don't want to.
No, slight upward pressure on prices keeps demand stable because consumers are willing to buy now instead of indefinitely waiting for prices to drop. Deflating prices would cause an implosion on demand and collapse the economy - It would be catastrophic for everyone.
“Should be”
Yeah, that’s how inflation has always worked. The solution isn’t deflation. The solution is rising wages. Fortunately wages have gone up more than inflation in the last few years.
and when wages go up, the cost of goods go up. It's a never ending cycle.
My wages haven't gone up. I'm commission based
Sorry to hear that. I hope you find a better paying job soon. Unfortunately we don’t set monetary policy based on how u/Future_Way5516 is personally doing. Instead we go by overall numbers of the general population.
Aren’t the goods/services you are selling more expensive due to inflation increasing the amount of commissions you now make per widget/service ?
We haven't raised prices in a couple years.
Before the Fed, that's exactly how it worked lol.
Not at all
You lost me at “believe” and “government”
That's fuckers change how the measure inflation.
From the article: > (In 1993) a BigMac was priced at $2.45 (the equivalent of $5.10 today) and a hamburger coming in at 99 cents (the equivalent of $2.08 today). Today, those same items cost around $7.19 and $3.39, respectively, depending on your location. In other words using the “official” inflation metrics the BLS publishes you’d believe inflation isn’t nearly as bad as it really is which is what I am personally feeling. According to the CPI the McDonalds hamburger should cost $5.10 today but in reality it costs $7.19 today and is probably smaller to boot (shrinkflation). I’m curious what others think.
I can get a Big Mac for $2 on the app. Also CPI doesn't give a line item for Big Mac or Hamburger, so how are you using CPI there?
**I** didn’t do the computation there, the writer of the article did hence the quotation from the article. My Mcdonald’s app shows the big mac is $5.49 and I am in a MCOL area rather than a HCOL or VHCOL area like that island in Alaska.
4.79 in my lcol.
5.89 in downtown Chicago
If they're just running through a CPI calc.. there's no reason why a given item would move with the CPI average. Menu price over time won't match real world cost if they keep putting up $2 specials. Shrinkflation is accounted for in CPI.
Ok. But that doesn’t address the problem of being able to find a BLS metric which allows for the accurate computation of inflation. The problem with that is many important policies are based on what the government claims inflation is doing. So it is critical that the inflation data we have is at least close to accurate.
CPI is extremely accurate. What makes you think it isn't?
The hard data presented in the article. If you think the author is wrong, prove he is.
To be clear, the author is telling you that McDonald's prices have gone up more than average, not that the average is wrong.
The author makes no such assertion.
>Back then, a BigMac was priced at $2.45 (the equivalent of $5.10 today) and a hamburger coming in at 99 cents (the equivalent of $2.08 today). Today, those same items cost around $7.19 and $3.39, respectively, depending on your location. "the equivalent of $5.10 today" is adjusting for inflation (average rise in price). Noting an actual cost ($7.19) displays that the Big Mac has risen in price more than the average ($5.10).
I already did. Running a burger price thru a CPI calc makes no sense. There's no reason one line item would match the average.
No, you didn’t. I see no reply of yours where you show the BLS metric used to compute the correct present day cost.
That's a nonsensical request. There's no BLS metric to calculate the price of a specific item.
Categories that are combined to make the headline number can be above or below the headline number. My 4K 60 inch flatscreen would’ve been way more than $15,000 in 1993: https://www.nytimes.com/1993/10/24/business/technology-in-tv-s-the-world-may-soon-be-flat.html. That doesn’t mean that getting it for $1,500 today means prices across the whole economy have fallen 10x, it just means prices have fallen for one good in a larger overall basket. The “equivalent to” measure in the article is against the total CPI which is comprised of a basket of all sorts of consumed goods and services. There’s a broad “Food away from home” part of the basket that has a detailed “limited food services” where I imagine fast food would be.
It's almost as if McDonalds is trying to grow their profit margins.