Beating CPI nominally means it’s keeping up with rent, insurance, vacations, so I think your first paragraph is a little misguided (though the analysis does seem strong on the whole, please don’t read this as me being dismissive). I find the Statista headline somewhat deceptive – barely keeping up with inflation is another way to say that real wages are rising, which should be reflected as an improvement to people’s lived experience, even though that really doesn’t seem to be the case. And similarly, the idea of the CPI is that when insurance, rent etc are increasing faster than the CPI, it’s because we’re seeing compensatory gains in affordability in other parts of the market basket – groceries, medical care, what have you. I do find your argument that the CPI is measuring the wrong thing to be very persuasive, since it’s about the only thing that makes any sense to me – how else would we see sentiment tanking while economic indicators are rising? I’m just not sure what is being left out, though the idea that interest on credit cards isn’t included in the CPI and has significantly increased does sound very plausible.
Edit: I actually left out the part where we agree the hardest, which is dumb. I’m with you 1000% on the wealth gap being K-shaped and affecting consumer sentiment. I think there’s a real possibility that at a certain level of inequality, it doesn’t matter to Joe and Jane Consumer if they are richer than last year or not because Elon Musk is rich enough to cause Kessler Syndrome and no-one can stop him.
Another consideration is the hollowing out of government statisticians and availability of data. Even the massaged nonsense we’ve been fed for years is getting curtailed. Thr economy will be what they say it is. They have optimized to the metrics to make line go up. Reality need not matter to those whose entire wealth is in the markets.
The more that we’re talking through this, the more seriously I’m considering the possibility that the reason BLS data is so divergent from what everyone is saying is because Trump’s DoL is cooking the books.
Truefully, they’ve been cooking the books on these measures since 08. Its just so much more obvious since they have the subtlety of a hammer and all the civil servants who would have helped them do it the normal way left.
Beating CPI nominally means it’s keeping up with rent, insurance, vacations, so I think your first paragraph is a little misguided (though the analysis does seem strong on the whole, please don’t read this as me being dismissive). I find the Statista headline somewhat deceptive – barely keeping up with inflation is another way to say that real wages are rising, which should be reflected as an improvement to people’s lived experience, even though that really doesn’t seem to be the case. And similarly, the idea of the CPI is that when insurance, rent etc are increasing faster than the CPI, it’s because we’re seeing compensatory gains in affordability in other parts of the market basket – groceries, medical care, what have you. I do find your argument that the CPI is measuring the wrong thing to be very persuasive, since it’s about the only thing that makes any sense to me – how else would we see sentiment tanking while economic indicators are rising? I’m just not sure what is being left out, though the idea that interest on credit cards isn’t included in the CPI and has significantly increased does sound very plausible.
Edit: I actually left out the part where we agree the hardest, which is dumb. I’m with you 1000% on the wealth gap being K-shaped and affecting consumer sentiment. I think there’s a real possibility that at a certain level of inequality, it doesn’t matter to Joe and Jane Consumer if they are richer than last year or not because Elon Musk is rich enough to cause Kessler Syndrome and no-one can stop him.
Another consideration is the hollowing out of government statisticians and availability of data. Even the massaged nonsense we’ve been fed for years is getting curtailed. Thr economy will be what they say it is. They have optimized to the metrics to make line go up. Reality need not matter to those whose entire wealth is in the markets.
The more that we’re talking through this, the more seriously I’m considering the possibility that the reason BLS data is so divergent from what everyone is saying is because Trump’s DoL is cooking the books.
Truefully, they’ve been cooking the books on these measures since 08. Its just so much more obvious since they have the subtlety of a hammer and all the civil servants who would have helped them do it the normal way left.