Why do the “official” numbers on food inflation state it’s gone up by tiny amounts like 8%, 19%, 11%, etc. but most of the foods I see has gone up by a minimum of 50%, 100%, 80%?
In: Economics
Just spitballing but is it possible some large corporations need lots of money for politics. Citizens United proved money is free speech.
As a department manager of a large grocery store a lot of my shit has doubled in price since 2021. Quite a bit of it is cost from The manufacturer but a lot is also greed from the store. It’s always shocking when I see what the gross profit of some items are.
But as others have said the number comes from a blanket of all the items in that category. Some will have gone up a little while others have skyrocketed.
now that many people have explained the mechanics of inflation, have a look at the BLS’ CPI graphs:
[12-month percentage change, Consumer Price Index, selected categories (bls.gov)](https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm)
you seem most concerned with the “food at home” basket. You might be incredulous that the 12-month average of inflation has gone down to 1.2% for this category as of March. But there are a few things to realize:
* There was a huge amount of food inflation last year, so, it’s hard to be objective. You need real price histories of a real assortment of food items from the grocery. Yes the prices are very high, but how much of that price growth happened recently?
* “Inflation went down” doesn’t mean prices went down, it means the rate of change slowed. Prices are still going up, less quickly. This is probably the number 1 misunderstanding about what these graphs mean among consumers. Prices don’t go down because the trace went down. Prices only go down if the trace’s value sits below zero for a period of time.
* You will notice that “food away from home” kind of lags “food at home”. That’s because a large percentage of restaurant food is procured with long term contracts; also, cost of labor influences that category more. Supermarket retail prices track changes to wholesale a lot more quickly.
Suppose we are back in April 2021.
Then we wait 3 years, and during those 3 years we have inflation rates of 8% in 2021, 19% in 2022, and 11% in 2023 (the numbers you gave as examples).
We are now back in April 2024, and those 3 years of inflation combines to ~43% inflation compared to 2021 prices (you compound them, rather than add them). That is close to the 50% you perceive.
Processed foods are being jacked the fuck up, but I can still buy staples for not more than 25% more than I could a few years ago.
What’s gone up by 100% over what period of time? Are those average prices or sale price vs not sale price?
Some of the food I buy isn’t much more expensive than before the pandemic. Other food is quite a bit pricier. It’s impossible to compare what you’re noting without examples.
Those numbers come from the government and the government is lying liars who lie.
They carefully select what they will and will not track and how they will present the information to make those numbers look better than they are.
Look into the history of government reported inflation through the years for more information.
Official inflation statistics use a basket of goods. Think of a very full shopping cart of various goods.
They also factor in substitution. If chicken is expensive but beef is cheap, the Bureau of Labor Statistics assumes you’ll switch from chicken to beef.
Finally, while it may not apply to foods, they also refactor the effects of technological and product quality improvements for some goods. For example, for computers:
https://www.bls.gov/cpi/factsheets/personal-computers.htm
It’s an election season and they can’t have high inflation. If you look at my POs going back several years, the food costs have increased by staggering amounts. And, as usual, some idiot will say “well that’s only anecdotal” while just blindly believing the government’s data which, if anyone just opens their eyes, can see is absolute shit. It’s not as bad as peak covid obviously, but we’re way past what the prices were on most staple items. But as others have pointed out, and a fact that remains true, is that it looks at a basket of goods. So understanding what’s in the basket plays a huge role. I can massage the numbers to say that inflation is 60% or I can make it 4%; this administration is choosing to underreport and drastically downplay it, as any administration would in an election season. The truth is, we’re all pretty fucked regardless of food costs.
That’s easy: the official inflation rate is not the real rate. This is done so that they don’t have to officially cut Social Security. Think of it this way; if my official inflation rates is 20% but it’s at declared 7%. Then the differential is 13%. If I do this for a decade, then your $1500 check in 10 years is going to spend like a $400 check. That is how they deal with Social Security. It is also how they deal with making sure that everyone pays taxes. Only 20% of people in the US are net taxpayers. So whenever they issue funding for non-budgetary spending to Israel or Ukraine, or a new magical thing. They’re really just inflating the currency and making you pay. You just happen to see it when you buy your food. This is the consequence of not being on the gold standard and allowing the government to have a central bank.
So imagine your government and it becomes very difficult for you to wage perpetual war or issue handouts to the poor or force the poor to pay for handouts to the upper middle class, in terms of student loan forgiveness. Everytime you want to do that, you’d have to go before both houses of Congress and get the president to sign it. do you think that you be voted out of office if you’re constituents didn’t want you to have perpetual war or exploiting the poor to help the upper middle class? Why bother to do any of this? Just simply print more money and fund it and don’t call it a budgetary item.
Imagine if you had to pass a tax to fund the Ukraine war. How popular would that be? We’re going to raise the income tax rate by 3% this year to fund the Ukraine war, and then another 2% for the Israeli war, and another 2% for student loan forgiveness, and 2% to fund illegal immigration settling. You would be voted out so fast and make your head spin. But remember that half the population is under 90 IQ and 75% under 100 IQ. Only those over 115 IQ can even grasp the concept of what’s really going on with inflation and taxes.
Have you ever wondered why the inflation won’t stop in the United States right now? That’s because they keep printing money to pay for student loans, Israel, Ukraine, and mythological climate catastrophe funding.
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