How can inflation be only a few percentage points and yet many goods and services are up over 50% since 2019?
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Production cost went up during Covid, high profits from limiting supply and raising prices. There are a lot of things the government doesn’t account for inflation. Food and grocery isn’t account for.
The cost of borrowing has increased substantially
Inflation is how prices in general have gone up across the economy as a whole. Some things will go up far more than inflation, and some things will go up less.
This is because inflation is indexed to a basket of goods. Not all of those items have uniformly risen in price. So the items you noticed more are the ones that have had a larger rise. But the items you don’t notice are the ones that have stayed pretty much the same.
Inflation is always given as the percentage increase from one year ago. So if you see the inflation numbers for June 2023, it’s in comparison to June 2022. It’s also measures a lot of different things and averages them; an inflation rate of 3.5% does not mean that everything has increased by exactly 3.5% over the past year. Some things have increased more than that, some have increased less than that, and some things may have actually gone down in price.
As has been pointed out, the metric considers many types of goods, some of which have not increased much in price, if at all.
In addition, depending on which metric you’re looking at, the prices of food and energy and/or the outliers that have increased the most may be excluded. (https://www.investopedia.com/terms/c/coreinflation.asp)
“But doesn’t that make for a misleading metric that doesn’t correspond to the lived experience of the average person?” Yep. Now you’re starting to understand.
Lies, very simply the lies we are told to believe that things are not as we see them to be.
Politics baby!
Because the governing body of reporting inflation is supposed to measure a set of metrics across a broad range of industries then average it out. E.g. steel manufacturing might be up 30%, farming 5%, petrol 20%. To provide a relevant figure they are supposed to compare like for like each time. However, because they screwed up inflation so bad by irresponsible behaviour during covid, they cut out some categories and only reported on industries with lower inflation on average to pull thr numbers down. Obviously in the categories that actually matter, inflation is much higher than the reported average.
Because inflation doesn’t do anything. Prices don’t rise by themselves, someone is setting them. And some set their prices higher than others because they believe the market will bear it.
The same way that the average earth temprature is the hottest on record beind 17.05 compared with 16.8. It may not seem a lot but we are talking total average from the -60c to the +55c around the globe.
The intrest rates are an average of all commodities and the percentage increase is per year. So if everything is up 3% from last year that means as a whole every year its compounding (adding up)
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