> In the U.S., prices rose close to 3% in the year ending Jan. 2, according to NielsenIQ, roughly double the overall rate of inflation.

The study found that food prices are rising faster than inflation.

3% is high, and 1.5% over inflation is also concerning, but I think a lot of people are jumping to conclusions based on the headline. Those inflation numbers would go unnoticed by most during normal times. We’re only seeing these headlines because inflation is a popular media topic right now.

Low inflation is essential to justifying the monetary easing policies that have been sustaining the stock market through the pandemic... so it is important for everyone to keep an eye on how dialog changes around these numbers.

[1] https://www.aei.org/carpe-diem/chart-of-the-day-or-century-3...

Much of that increase can be traced back to increased shipping costs during COVID lockdown.

Monetary policy isn’t the only or even the primary driver of inflation. In this case, the inflation comes from increases demand on a portion of the food supply chain (shipping services).

The alarmism in the comment section largely comes from people misreading the headline. The article is about soaring food costs in developing nations, but the comment section is treating the headline as if it’s about US food prices.

After two degrees in economics, my perception is that monetary policy is definitely considered a primary driver of inflation, probably THE primary driver. But this is probably irrelevant - see below.

> In this case, the inflation comes from increases demand on a portion of the food supply chain (shipping services).

Yes, for example: "in North America... a shortage of both shipping containers and truck drivers".

> The alarmism in the comment section largely comes from people misreading the headline.

To me, it feels alarmist for Bloomberg to consistently say "inflation" instead of "price increases" throughout the article. A temporary problem with supply/demand is not the same as inflation. Food prices will almost certainly fall back to their normal trajectory within a year or two, once supply/demand normalizes, whereas if there was truly inflation that would almost certainly NOT occur.

To be fair, three out of the seven categories that are under inflation can also be considered "essential". Imagine the outrage if cars (or more generally, transport) and clothing increased 2x over inflation, or if cellphone/internet access became less and less affordable (remember all the "internet should be an essential service" headlines at the start of the pandemic?).

the other big correlate is just goods vs services (even textbooks are service-like due to editions). I am not an economist but I'm really curious whether rapid depreciation caused by planned obsolescence of e.g. consumer electronics is causing a poor measurement of price trends in that area. Today's iPhone will cost much less next year, but the cost of maintaining a cutting-edge smart phone keeps going up.

inflation is measuring the value of a currency. CPI is a way to infer inflation from the nominal price of consumer goods; but it is not the definition of inflation. put another way, if an apple costs twice as much as it did last year, that fact is not enough to say whether the currency inflated.

my real point here is that nominal price increases do not necessarily imply inflation. if the price of one type of good is increasing much faster than the others, a better explanation is that the real value of those specific goods is increasing. does this matter to ordinary people buying food? not really. their main concern here is the nominal price of food compared to their nominal earnings.

I saw another analysis suggesting a 75% drop in media coverage of Biden vs. Trump, at this same point in each’s presidency. That’s a useful statistic that I have a hard time finding in a comprehensive way.

We have dozens. Countless companies have tools to show you how things are happening on social media, and all the big new outlets mirror their content to social media. At the most simple level, basic word counts can track how issues appear and disappear. When you hear about a 75% drop in coverage of "Biden v. Trump" that is almost certainly taken from the number of times those two names are included in news reports. Counting words or highlighting the use of new words does not require AI.

It's much clearer to say "the rest of the basket hasn't risen above normal yet, but I am concerned the headline I quoted will mislead people who don't understand inflation.

Maybe for rich people. If you have an income of 2000/month, with the first 1000 or so going to rent, food is likely your second largest expense.

Housing is by far the largest component (42%) (contrary to the common misconception that housing is not in the CPI), followed by Food and Beverages (15%) and Transportation (15%). If you want to up-weight food, you must necessarily down-weight some other component. The prime candidate would be shelter (most other categories are already much smaller than food), but that's of course not the answer that CPI-doubters are looking for.

I am curious as to whether the CPI targets the average person or the average consumer. Rich people spend more. They consumer more and are therefore overrepresented in most consumer-related measurements. Is the CPI meant as a measure of the cost of living or a tool for the calculation of available spending power?

https://amp.theguardian.com/environment/2015/dec/02/arable-l...

There, fixed the headline.

For a while, one of the key US inflation measures even assumed that if people's medication went up in price massively they'd substitute it for whatever medicine hadn't exploded in price even if it was for some completely different condition! And I'm not convinced that, even for things which genuinely are substitutable like different kinds of food, it's actually possible over the long term to substitute your spending in a way that matches up with official inflation figures.

https://fred.stlouisfed.org/series/CUUR0000SEHA

I believe those are the two housing sub components of the basket, with owners’ equivalent rent weighted more than the rent one. Eyeballing it they both look under 2%.

Causally, inflation in the US is driven by the Fed's 2% average inflation target.

How those 2% distribute amongst the basket of good is a different question, of course.

Does anyone have the data sets and the formulas used to calculate the CPI? No, I don't think so, because they are hidden.

Until the data used to calculate the CPI is open, it is all speculation.

Be sure to refer to overview.txt and for more high-level details refer to https://www.bls.gov/cpi/data.htm and https://www.bls.gov/cpi/methods-overview.htm — you might also find relevant information on weighting here https://www.bls.gov/cpi/tables/relative-importance/home.htm

Typical entries in the AP (Average Price) series look like: APU0000701322 2015 M05 1.335

where APU0000701322 is a pound of spaghetti or macaroni, and M05 is May.

I thought of telling you off for spreading misinformation to incite, but I figured that saying it this would gets my point across more strongly.

That survey data is what is not open as far as I know: https://www.bls.gov/opub/hom/cpi/data.htm.

I agree they're not the entirety of the basket, but they are a core component.

There is no "general price level".

Here's the full list, which make up the "general price level": https://www.bls.gov/cpi/tables/relative-importance/2020.htm If you believe food is underweighted, then what category do you believe is overweighted?

Seriously, would it? I’m not an economist. I am aware of RPI/CPI, and inflation is measured independently in different countries within the Eurozone, so it’s not like we can’t have multiple measures for different purposes or populations.

Inflation is measured based on the changing the value of a dollar. So no, you can't have different inflation for different people.

You can have a separate idea of a poverty line or cost of living. But that's a different concept and would need different measures.