Paul Krugman: The BLS has finally updated its estimates of the Harmonized Index of Consumer Prices, which excludes owners’ equivalent rent, a price nobody pays that is also a lagging indicator. Dude, where’s my inflation problem?

The BLS has finally updated its estimates of the Harmonized Index of Consumer Prices, which excludes owners’ equivalent rent, a price nobody pays that is also a lagging indicator. Dude, where’s my inflation problem?

”my inflation problem” (because I’m not an economist) is that stuff has become more expensive, and doesn’t get any cheaper.

Is your income the same as ~Feb 2021?

I’m with you. Wages has gone up. But if people feel that their pay rise has been eaten up by higher mortgage and grocery prices they might not be happy. Yes, people are on average better off. They should be happy about it. But they aren’t. Just sayin.

it's lower, actually. And I'm lucky to even have a job

You live in New Zealand, it seems?

Yes

Do you rent?

You (mostly) do not want prices to fall (that’s deflation). You want them to get more expensive slower (disinflation).

I know you don’t. Only thing I’m saying, is that ordinary voters who have seen everything getting more expensive, won’t get exited by some statistics showing that they won’t rise in the same speed the months to come.

Try to talk to people less wealthy than you are, they will be able to point you to where the inflation is. Or you can keep looking for graphs that "proves" that people are just too stupid to understand their own economic situation, that it also always a possibility

In the soft drinks and snacks aisles of the grocery store?

Hey Dr Krugman. I would love to hear your views on the falling prices (deflation?) for cars and durable goods. www.businessinsider.com/auto-industr...

People are delaying buying new cars, creating a deflationary 'spiral' that's bad news for the auto industrywww.businessinsider.com Delayed vehicle purchases could lead to a "deflationary spiral" and recession for the auto industry. High interest rates aren't helping.

This was a positive omen for the last president who stood for re-election under these conditions *checks notes*

You really can tell the class position of people who say "the economy is great you whining bastards, why aren't you giving Diamond Joe the credit for how great your life is?" None of you rent.

21-23

And hopefully a rate cut in Sept from the Fed

Like said many times, people hate it when stuff gets more expensive. So where are the price drops, dude?

If you want deflation, you want 10% unemployment

Research into the psychology about this has shown that people care more about price increases and less about the fear of unemployment. Why: people assume this will only hit other people, not them, whereas price increases affect everyone.

There’s probably some magic number of the unemployment rate that gets people to flip the other way. Or at least gets media to write stories the other way.

Afraid not, because if unemployment does rise while prices drop, the incumbent government is then blamed for the rising unemployment. Rock, hard place.

That’s what I mean—they flip from “I have a job because of me” to “I might lose my job because of you”.

Housing is unaffordable for half of Americans.

Isn't HICP showing the same thing as CPI, just lowered? CPI was ~2% for 2010-2020 and is now ~3%. HICP was ~1.5% for 2010-2020 and is now a bit over 2%. So HICP shows the exact same "problem," if we believe it's a problem.

Probably in the area under the curve of that massive spike, Paul. Which is when a ton of people went underwater and haven’t been able to recover

Truth is the first casualty eh? Every YouTube Republicon advert is telling me it’s an inflation nightmare. What about that misery index nonsense too eh?

There is an election coming and if we can’t ruin it for Democratic candidates I mean really what are we here about at the FED. And we have the example of SCOTUS to lead us. The FED itself suggests 60% of inflation is corporate monopoly price increases beyond increased costs. Explain inflation?

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