Just for fun, here are the top ten biggest price gainers over the month from November to December, along with the top ten price decliners:
There is no point to be made about this. I just thought you might find it entertaining.
The most interesting thing I found here is that men's shirts rose at a spectacular annualized rate of 52%, while men's underwear dropped at an annualized rate of 27%. I suppose if I knew anything about menswear, maybe I'd know that these are completely different markets that have nothing to do with each other. But they seem kind of similar, don't they?
And how is it that food served at elementary schools dropped at an astronomical annualized rate of 154%? Did some kind of federal aid program suddenly go into effect in December?
It’s funny to read about grocery / food prices while people still line up at fast food drive thru and pack the Olive Garden. It’s funny to read about gas prices while parking lots and street traffic is full of SUV and pick up trucks. People may notices these price changes but so far it hasn’t made a dent in the over consumption habits of people all over the country. In fact, The NY Times was so desperate to illustrate the effect of food prices that they found some people canning vegetables from a garden and keeping hens to get eggs.
Lord, have mercy!
https://www.nytimes.com/2022/01/12/business/economy/cpi-inflation-december-2021.html
That's just the endstage artisanality of uppermiddleclass Brooklynites that has been going on since before 9/11/01.
But at least they're not Hmong, because that would be #idpol, right, #OurRevolution?
Oh come now. In The Thrill of it All (1963) Doris Day plays housewife to to James Garner's successful doctor and there are several explicit scenes showing her canning produce out of her backyard garden. Again, movie, idiosyncratic, anecdotal, yadda yadda, but even before we moved to the country most every mom on our street had a garden and did the canning thing.
And they knew how to sew too! How times have changed.
Um, er, ah, the oranges in November were the end-of-crop Valencias -- oranges that needed mooooving! The oranges now are the first-of-the-crop Navels. It's not an oranges to oranges comparison.
I find your argument more appealing than others
really??? 😉
Pithy as that may be, I have to wonder if it indeed contains a seed of truth or if it is susceptible to pitting and pulping. Some navel-gazing is in order.
ok, just stop. Stop it NOW!!!
😉
haha, I enjoyed that.
Groan. Kudos to Vog46 and rick_jones too.
And Anandakos, too!
I've been wondering what happened to Cuties, the little mandarin oranges that my kids love. This is usually prime Cuties season, but I haven't seen any in months.
I've noticed citrus variety is a lot more limited this winter.
To be serious, it is an oranges to oranges comparison if Valencias and navels are of equal value and quality to the consumer , at least for prices .
If navels are higher quality, so consumers would pay 50% more for them if both available at same time , that should be adjusted.
A price increase of an item due to seasonal or temporary scarcity is a real price increase and should not be discounted.
And such an increase should, in theory, with a perfectly operating free market, cause any increase at all in overall price level or inflation. Other goods can simply have slightly lower relative prices ( or lower price increases) to offset that .
Now no free market is perfect due to incomplete info and things like human tendency for inertia . But that would not apply much to normal expected seasonal changes which everyone expects.
So a big jump in orange prices will generally NOT be a cause of overall inflation if just a normal seasonal change .
With many men working from home only visible from the chest up on Zoom, they have taken to wearing sweats commando, but still need those dress shirts. It's all supply and demand ;-o)
How do prices drop by more than 100%?
I guess they will be paying people to eat school lunches by the end of the year.
Via unwarranted extrapolation: annualized drop = 12 × actual monthly drop.
Which makes no sense. If prices went down 14.5% in one month, that should not translate to 154% annually - the drop is large enough that we need to change the calculation instead of just x12. If the same trend continued, price would be dropping 14.5% *of a smaller amount* each month - so that after a year, the price would be about 15.25% of the original, so proper annualized value would be -84.75%, not -154%
Upvoted for the more reasonable math.
That is not how it works and not how it should work, unless they are doing it really stupidly.
It is around a 6.6% monthly increase, not a 14.5% , that would be 154% annualized. This is expomential growth. It says what the annual growth would be if it continued at same RATE for 12 months.
The method you describe for a price drop is exactly what they would do. For a price increase, the %age increase will be on a higher and higher amount .
The correct way of doing it exponentially means that a 14.5% increase in one month comes out to a 608% annualized increase while a 14.5% drop equals an 84.74% annualized drop ( or 15.26% left as you calculated).
What you suggest for a price decline is what they do. Where you are off is you think the same correct method for a price increase would also reduce the annualized change vs. simply multiplying by 12.
The problem is, no one truly knows what is causing the changes in prices; some say it’s supply factors, some say demand, some that it’s shipping problems. If we don’t know what the mechanism is, we don’t even know if there is a trend (versus a one-off event), much less whether it is linear, quadratic, exponential, logistic, …. Extrapolation is pure speculation.
The school lunch quirky data might be because, with all the surprise school closures after Covid outbreaks, some school districts that preordered lots of perishable food decided to give away lunch bags free to anyone who physically dropped by their buildings rather than throw it all away. (At least that’s what’s happening in my area with schools that unexpectedly went into shutdown mode.) The price for those lunches effectively went from a couple bucks to $0 for those weeks.
Next thing the Dukes will corner the entire frozen orange juice market.
How else would their failson David have been able to find the time to be racist?
I have a dollar.
I’d love to see a poll of, say, 20 economists on why the price of men’s shirts went up; I’m sure you would get 30 reasons. The fact is, though, that no one knows exactly what mechanism moved that price, much less whether it will operate in exactly the same way for the next 11 months. So annualizing is just amplifying a noisy measure for no good reason; rendering it less informative.
The measurement problem is why we don't have a real science of economics. But that's just me venting at idiots who don't understand why it takes so long to roll out a vaccine.
Probably because men only buy underwear when they really need it. But shirts are a common Christmas gift.
Pretty sure men's shirts are just a function of Xmas sales over black Friday ending after November. Those could be common loss leaders to get people in the door. I would bet that prior month showed a decline in men's shirts due to sales and this is just the sales ending.
And the actual monthly change needs to be under 4% to get an annualized rate of 52%, I think.
Picking out individual items and looking at annualized rates for a month magnifies changes to look more extreme than they are.
But this is not true in the same way for the overall price level . A 3.5% change in overall prices in one month would be disastrous. For only men's shirts, no big deal.
When you are picking out the individual high and low items, you are always going to see the small number of extremes.
I’m sure there is some decent methodology but I just checked the macys website and all the shirts on sale are in no way 50% more expensive than last year. The same applies to their regular prices. So that number is some sort of bizarre misrepresentation of what you pay for a shirt.
It is a MONTHLY measurement that is annualized, not an annual measurement. So it is not saying at all that prices went up by 50% in one year .
If someone says a car accelerated and reached 60 miles an hour, would you argue that no they didn't because the car was not 60 miles away an hour ago?
It is simply a rate for the MONTH expressed in annualized terms as that is what is more understandable. Or maybe not for you as clearly you are not understanding it.
And taking one month's annualized overall inflation as possibly portendning that this will be the price increase over the next year is a reasonable concern, unless you can definitely point out some factors causing it that are surely short term. It is totally conceivable that we could have inflation of over 7% for a full year.
But you really cannot do the same for a narrow category ( or even a broad category). Because that is not an overall price level, but also a measure of relative price compared to other things. Prices of shirts might go up by 50% in a year while overall inflation is 40% - the relative price change there is somewhat possible. But it would be extraordinary for them to increase by 50% if overall inflation is 10%.
On the school lunch topic, apart from the already mentioned entirely bogus figuring, I can add this anecdote - in my daughter's school district they have switched to free meals for everyone, regardless of income, in the name of avoiding singling out those who were on the free or reduced price meal program. If I recall correctly, the entire system was card-based already for just the same reason. Everyone used cards, no one would know how those cards got filled.
USDA made free lunches available to all schools for 2021-22. Yes, schools have tried to reduce stigma. However, some school districts have made free lunches available to all before this rule. It saves money to not have to process all the paper work. There have been eligibility requirements to do this but it has a lot of benefits. https://edsource.org/2021/usda-extends-free-meals-through-next-school-year/653335
And maybe best if the annualized monthly price changes were not used in mass media stories re individual items at all.
Because clearly, if many of the posters here are representative of the public, what this is representing is not understood at all.
Think of it like a speed for the month.
If a race car travels 200 miles an hour on average for the last minute, I am not saying anything definite about how far it traveled in the last hour or the next hour . It is only expressed as speed per hour as that is commonly understood.
Saying shirts went up at an annualized rate of 52% is really ONLY saying they went up 3.55% that month. Only stated as 52% a year to give people an idea of what that means as a rate .
There is no better way to express that as an annual rate - that is clearly the correct way . If you have an alternative, it is simply to not annualize at all and show the actual monthly change.
TANSTAAFL- otherr, rather, than other is, but glibertarians would rather waste money than do something sensible, if it means they can make themselves feel worthy by crapping on poor people.