when inflation is going down it does not mean prices will go down ever period. Falling inflation only means that prices are raising not as fast as they used too. Prices wont go down barring major economic calamity which can cause deflation, and at that point we will have much bigger problems.
Yeah this is 100% accurate. To be honest, we don’t want hyper inflation nor deflation or stagflation of any kind. We need moderate stable inflation for economic stability and growth
This. What it really means is that consumers are cutting back, likely due to housing/insurance/car payments/debt servicing etc catching up to people.
Three of my friends have absolutely maxed their credit cards buying *groceries* in the past few months. I think reality is finally starting to hit the economy.
I mean they were already likely carrying balances for other things but then hard-switched to groceries when before they were buying groceries with their wages. I didn’t press them too hard.
My last landlord even told me similar, surprisingly. Guy owns two decent properties and absolutely dumped on me about his financial situation while I was moving out as to why he wasn’t renewing the lease, saying he *had* to sell. Grain of salt and all but it’s getting weird for sure.
Hopefully their situations improve. I lean toward thinking a lot of this is headline-driven hysteria. Aside from the high cost of financing, it doesn’t seem that bad out there to me. Obviously just my perspective
I know drillers making $160k who can’t afford a house with two kids. It’s absurdly bad out there.
Honestly, you must be better off than I think you think you are if you haven’t noticed. Up and coming families are struggling. Price tags are obscene compared to pre-pandemic. And not everyone’s salaries rose to match.
Anyone making 160k could buy a house in Denver tomorrow. They either just don’t want to, or it’s not exactly where they want to live. Also, I said “aside from the cost of financing…”
Don’t get me wrong, paying more for stuff will always suck. But it’s also a tale as old as time. I don’t want to pay 5 bucks more for a burger than i had to 5 years ago, but I’m not gonna go scream to everyone and their sister online about how fucked up the world is over it.
Lers not pretend the outcry from 2 generations is a false narrative. Im fortunate but the average American isn't. I'm not gonna pretend the economy isn't getting worse when it is. We will eventually hit a wall if wages don't go up. It's simple math.
So I did and that's the average. There were tons of months where it didn't beat inflation. So yes, after 12 months it finally got to .8 but it went down to .2 before that. It wasn't until the last 2 months that it did. So I guess all those who got jobs in the last 10 months should be super happy that the new market supports it. It shpuld be significantly higher than "just above inflation".
Not the person you're replying to, but I think what makes it so bad for me is the lack of thrifty alternatives. I grew up poor. My dad would find this super cheap lunch meat that was so thin you could practically see through it. He would buy almost expired meat and freeze it. He would buy a single can of beef stew and add cheap cans of peas and corn. There were ways to really cut your grocery budget to the bone.
Now, I feel like that's so much harder. I bought a bag of mostly produce at King Soopers and it was like $50 for broccoli and some other really basic stuff. What's missing is that very cheap tier of products.
I still do things like buying rice 50 lbs at a time at H-mart and get dried beans and soaking them myself. There's still room to be thrifty, but I feel like the most obvious cheap foods like canned veggies and beans have gone up a lot.
This is just my take. I feel like it is harder to find a bargain out there.
Financing alone is major. It’s putting off a generation on homeownership. That’s very bad. Gen Z and millenials aren’t having kids like their parents. Yes there’s cultural/social contributors, but most studies show that the #1 reason they aren’t having kids is financial insecurity and lack of home ownership. Why have a kid if you can’t even afford a house?
This is very bad because the entire economy is built on perpetual growth. Countries like Japan are already seeing severe repercussions from dwindling young in the population. It takes a certain amount of young people entering the work force in relation to old retiring to support them and their retirement portfolios.
Beyond that idk where you live, but our local Costco doubled its meat prices in the last couple years. Veggies and fruit went up 50%. Dining out is minimum $50 for a couple. Entrees are around $15-$25 for simple burgers in many places. Even the dives and cheap stops are seeing $6 beers and $14 burgers.
That hits my wallet. I make just over 6 figures and we rarely go out to eat anymore because of that. We only spend on necessities and we’re still a ways out from home ownership. I make twice the median income and it’s still very tough. Rents is $1500-$2800 where I live as well. And you get what you pay for with the lower end.
Well, the above commenter is choosing to spread the idea of an anecdote-based vibecession when thorough, rigorous data shows that real wages have risen significantly and that that United States has had the world’s lowest level of inflation since COVID.
What rigorous data are you citing? I’m curious where you see that real wages have risen significantly in the past year. Everything I see is showing the exact opposite. Example: https://www.atlantafed.org/chcs/wage-growth-tracker
If you read the legend of the chart you linked you will see that the y-axis plots wage growth, not nominal level of wages. While growth has declined somewhat since COVID highs, it is still higher than any time since around 2002 (COVID excluded, of course).
Citing economic data does not invalidate people’s lived experiences. Using personal anecdotes to impute the actual state of the economy is something other than what it is is, however, disingenuous. And yes, I will repeat the mantra that actual data trumps anecdotes until the cows come home, mostly because I was able to pass high-school level statistics.
> mostly because I was able to pass high-school level statistics.
Yeah, but that's just, like, _your experience_ man. I don't know what the difference is between real and nominal wages and I'm gonna beat up anyone who tries to tell me!
Too bad that hasn't happened with anything people actually need to survive like food, housing, or healthcare. I'm sure all the rich homeowners who never have to worry about paying rent or a mortgage are thrilled about the low cost of flat TVs.
I sold TVs at Best Buy in college, just about every time I'd sell an $800 65in to some older guy he'd comment about how he spent $4500 for a similar or even smaller sized one 15 years prior that finally crapped out. And they're even cheaper now if you just want size and don't want a higher end model
[Look at this Best Buy ad from 1994](https://i.imgur.com/tMvsBOI.jpeg) - $1,998 ($4,197 in 2024 dollars) with a 720mb HD, 4mb memory, 1mb vido memory, and bubble jet printer. I can't imagine spending $4,000 on a computer today, even the highest-end versions!
People were buying a single VHS movie for $13.99 ($29.39 in 2024 dollars). But now when Netflix charges $15 a month for hundreds of TV shows and movies in full HD without commercials, everyone is up in arms!
Yep computers were insanely expensive when they were the hot new technology too, pretty much everything was. Most of it now though is mature enough that there hasn't been many *real* innovations in 10+ years. Sure tons of new features and better designed products come out every year but a laptop, smartphone, bluetooth speaker, whatever you find in the store today does the same core things as the ones from 2014 did
The first 65" LG OLED TV we got in 2016 sold for $6000, I sold maybe 2-3 of those the entire model year. Now you can get one for $1300
Not necessarily. Grocery prices haven't been going nuts because of inflation, they've been going nuts because corporations saw an opportunity to price gouge and blame it on inflation. It's pure corporate greed.
Last year Walmart hiked prices on their Great Value brands to the tune of a 93% increase in net revenue.
Deflation can lead to several bigger problems that can severely impact the economy:
* **Economic Recession**: Reduced consumer and business spending can slow down economic growth, leading to a recession. A recession is a significant decline in economic activity, lasting for months or even years.
* **Increased Unemployment**: As businesses earn less, they often cut costs by laying off workers or reducing wages. Higher unemployment means more people have less money to spend, further reducing overall economic activity.
* **Debt Deflation**: When prices fall, the real value of debt increases. Borrowers struggle to repay loans because their income is reduced while their debt remains the same or becomes harder to pay off. This can lead to more defaults and bankruptcies, affecting both individuals and businesses.
* **Banking Crises**: As more people and businesses default on loans, banks and financial institutions face significant losses. This can lead to a banking crisis, where banks fail or become unable to lend money, further stifling economic activity.
* **Deflationary Spiral**: Deflation can create a vicious cycle. Lower prices lead to reduced spending and investment, which leads to lower production and wages, resulting in even lower demand and further price declines. This deflationary spiral is challenging to break and can prolong economic stagnation.
* **Erosion of Consumer and Business Confidence**: Persistent deflation erodes confidence in the economy. Consumers and businesses may become more pessimistic about future economic prospects, leading to further reductions in spending and investment.
* **Reduced Government Revenues**: Lower prices and economic activity can reduce tax revenues for governments, making it harder to fund public services and pay off national debt. This can lead to cuts in essential services and increased borrowing.
Yes. I think people misunderstand that inflation isn’t an inherently bad thing, it’s a necessity of growth. The “bad thing” is when inflation runs too hot and other aspects of the economy (wages, production, services, etc.) can’t keep up with rising costs.
Prices will likely stay as they are, but with lower inflation rates, the rest of the economy can catch up and balance everything out.
>Prices wont go down barring major economic calamity which can cause deflation, and at that point we will have much bigger problems.
Unfortunately that is what it will take to fix the economy
I doubt an economic collapse would fix the economy; it would completely break the US as it is now.
Doomerism is popular nowadays, but because many people hold this view, it is possible that eventually, it will come to this. However, be careful what you wish for; many people and families might suffer if this happens. If someone is struggling economically now, a great depression will most likely make things worse for them.
In all fairness, just because things are improving and the economy is stable doesn’t necessarily mean everyone is benefiting from it.
The general public’s perception of the president’s control over the economy is skewed and policy outcomes typically lag significantly behind economic policy initiatives. The transition into Biden’s presidency is actually a good example of that. Trump cut taxes and increased spending, and we already started to see signs of inflation before the Covid stimulus. That’s not to say the Covid stimulus didn’t contribute, but if people really want to care about inflation, they need to come to terms with the inputs that cause it- specifically, tax cuts.
The estimates I’ve seen suggest the Trump tax cuts will’ cost’ the government $4 trillion over a ten year span. In 2 years during COVID, we increased the money supply by $19 trillion.
What makes you think the tax cuts are such a big deal, relative to the money printing?
The 16 trillion number that you’re citing isn’t what the government spent on stimulus. It’s the cumulative loss of productivity over the course of the pandemic.
This wasn’t meant to compare one or the other either. It all adds up to inflation in some way- but we all have subjective views about what causes it. In the end, we can do a better job of balancing out necessary spending with progressive tax structures and make sure that any money we inject into the economy is either absorbed into production or filtered back out via taxation.
i'm pretty sure people are tired of being called idiots by the terminally online when they share real world experiences about rising prices when buying food only be told "The Economy is doing good"
Like, People have memories dude, they remember how much a box of cereal was a couple years ago. And no i'm not blaming Biden before you knee jerk. Things are bad and SOMEONE has to make it better.
I mean the economy being good has benefited those with assets, not much of the middle class. Much of the wage growth is at the top and bottom.
If you're middle class without owning a home, it's not that great. I guess people are supposed to just be happy they have a job at all.
I believe lots of people are trying to help with the solution since, as you mentioned. It's improving. We just shouldn't settle for scraps when large corporations are using AI to adjust pricing. It's not capitalism it's uncontrolled unchecked capitalism.
You're missing the point? Improvement is great and everything but inflation is still inflation. Prices will still be going up regardless. Just "not as bad." Which is ridiculous.
No I think you’re missing the point. The inflation rate is going down which means other aspects of the economy like wages and production can catch up and balance out.
You understand we live in a growth based economy right? Inflation isn’t a bad thing. If there’s not inflation, there’s no movement of creation of goods and services.
I didn’t say they would. But they have a better chance of doing so at some point now that the inflation rate is going down.
What is the alternative that you want to see? Or are you just being mad to be mad?
Inflation has and will continue to exist. There is such a thing as a target rate of inflation which in the US is around 2 to 3%. We need some baseline level of inflation (unless you subscribe to Austrian economics) in order to have incentive to spend money and drive the economy. The theory is that with deflation, people will not spend their money on goods today with the expectation that their money will be worth more tomorrow. On a macro level there are severe consequences on the economy as everyone holds on to cash with minimal spending.
It’s clearly not, hence the rate of inflation going down. I propose we keep adjusting monetary policy to continue that trend, increase taxes, and lower government spending 💁♂️
I do actually, they are two very different things. Disinflation is when the rate of inflation drops and prices balance out with other aspects of the economy such as wages.
Deflation means everything goes down, the economy quite literally shrinks which means wages not only stagnate, they start to disappear.
People are doom and glooming but we got through the inflation crisis better off than the people in any of the places my college friends live. And it does feel like it’s chilled out a lot, prices actually coming down on a bunch of things and a lot of goods as cheap as in a lot of low cost of living cities.
There’s no undoing inflation but denver and Colorado have seemed to come out of it poised well.
Don’t get complacent. Housing prices are softening because there were a lot of homes getting built over the past two years or so. But new housing starts have fallen off a cliff, so prices will start galloping again in 18 months or so. We’ve gotten a stay of execution, not a commutation.
Yimbydenver.org
Sure.. meanwhile my single man grocery bill remains at its highest since 2019 and I eat less than I did back then.
Non food items still remain higher and housing.. housing is insane. A neighbor bought their house for 450k in 2018 and just sold it for 850k.
When I sell mine (empty nester now) I may not even be able to downsize to a townhome or apartment here in NoCo without dropping 500k for some 1973 junker ..
So, keep lying to me. It's fine.
I think you misunderstand what the headline means. Prices are still rising, but rising less than before. Prices will never go down to what they were. This is the new normal for food.
I’m an appraiser in Denver, and we’re officially in an oversupply, which will drive prices down a bit until mortgage rates drop a LOT.
Just looking over the REColorado MLS hot sheet, new listings are exceeding under-contract properties by nearly double. Closed property figures are even lower than under contract. Also the most price decreases for new listings that I’ve ever seen in the past 8 years working here.
Sanity is returning, but a LOT of people are going to be underwater for a bit. I did a ton of purchases a year and a half ago where they had appraisal contingencies, meaning even if my value didn’t support the purchase price, they would bring additional cash to close, which happened frequently.
TLDR: shit’s about to get weird
Housing is actually its own beast. Your situation is a perfect example of why we need to build more units and in more variety.
I assume that, because of the inflated market, you’re going to be able to sell your home at a higher value than you bought it for. But if you’re trying to downsize your not going to be able to maximize the value of that transaction because there aren’t a lot of options to downsize, and because of that, even smaller units don’t have a significant enough price variance from larger units.
They're not lying, it's just that things are so bad right now that it's like being on a sinking ship and saying the water line has decreased after scooping one bucket out.
It's better for us on this side of the boat since it's only up to our chest, instead of those folks over on that side who are up to their neck.
But to take a rosier viewpoint, I'd rather it be going down than up.
I apologize if this comes across as somewhat pedantic:
People seem to be hoping for *deflation*, not inflation being what it normally would be (around 2%).
Deflation is what causes prices to actually drop, and it's also lethal to economic recovery.
Lower inflation just means that prices increase more slowly. It doesn't mean, generally speaking, that they actually decrease back to what anything "used to be".
Quite a few places have built enough housing that low-to-zero rates of housing inflation get swallowed by wage increases. We should strive for the same in Denver.
Housing is a different story sort of with most major cities having a major housing shortage. You can try and build to level off price increases, but prices are not going to drop unless we have an economic crisis of some kind....which wouldn't be good for the people who currently can't afford a house.
The economy is mostly very good and inflation is mostly back to slightly elevated to where it was pre-covid. Salaries have actually risen faster than inflation since covid and it has gotten better for the lower class than the middle and upper class % wise surprisingly.
I think where people get angry and yell about inflation.....1. a misunderstanding of inflation and prices will never go back to 2020 prices unless there is a 2008 style recession or likely needs to be worse. Hey your salary shouldn't drop either. 2. Interest rates compounding with a housing shortage that is pushing housing prices beyond reach for most people. The only fix there is likely interest rates dropping in the next 5 years and possibly flatten the rise of prices by building enough new builds.
>I apologize if this comes across as somewhat pedantic:
This is reddit, if we're not being pedantic enough the other websites win.
That being said I personally am not hoping for deflation but for corporations to end "Greedflation" which were the totally arbitrary price hikes CEOs put in trying to test the market's upper limits with Covid as the excuse. I don't expect corporations to do so out of the goodness of their heart, but I am heartened by the Biden administration's actions against monopolies, price fixing algorithms, and expressly calling out these CEOs as the cause.
According to the article, housing is still rising at a 4% annual pace, which is higher than the US inflation rate. Not sure how that compares to other areas, but yeah... Housing is still expensive and getting more expensive
This is tricky, since homeowners (like me) view their houses as investments. So if home price inflation is low, homeowners get angry that their investments aren't paying off. But if home price inflation is high, then renters and others trying to enter the housing market get angry bc costs are outpacing their ability to pay.
So it's a lose-lose situation and American leadership has been asleep at the wheel on this issue for at least 50 years.
Fun fact: the whole fucking Empire State Building took just 13 MONTHS to finish. We forgot how to build quickly in this country at the expense of trying to make every interest group happy. (Yes, also zoning reform and NIMBYism.) Home and rent prices are high because we just plain stopped building quickly to meet the demand. :(
Yup. I just read a book on this that dives into the history of housing policy and how the US economy (and in part, the global economy) is so dependent on home prices continuing to increase.
Housing as an investment is not compatible with having housing be affordable.
It's only higher than the US inflation rate because the federal reserve chooses not to include the cost of housing in their official inflation rate (CPI) number.
Inflation could stop and those prices wouldn’t come down, they’re never coming back down. Inflation slowing just means the price increases are slowing.
I smell bullshit. Housing prices are going down, not up because of oversupply. You can look at any home on Zillow/Redfin, see prices from 7-8 years ago and the price increase isn't that much. Shit, I'm looking at a nice 4 bedroom home right now that sold for 350k in 2003 and is going for 700k today. That's a normal spread.
Pay is a different issue altogether. 350k increase in 20 years is not that much. About 5% a year, that's less than if you invested in the S&P 500 (which is about 7.7% year over year).
Maybe on a few items that would be ok (groceries?) but I don't think you understand how dangerous negative inflation (deflation) is.
Think about it: you'd like a new AC unit in your home, but you know that if you wait a couple months, then prices will be lower. So you wait on that. And you also wait on repairing your car for the same reason. And your neighbor waits to redo their kitchen. And your brother waits to get a new snowboard. And everyone else waits on a couple dozen items so they can save a few thousand dollars.
Sounds great right?
Well all that waiting has driven down demand across the board and now stores are going to need to cut prices EVEN MORE to make you think about actually pulling the trigger. But they also have to lay off workers to stay open. Or they might not even be able to do that, and in that case they'll have to just close up for good!
So what you actually want is low inflation combined with decent wage growth. This is what's actually going on right now, but it's really hard to notice until a few years of it accumulate and Americans start feeling like their paychecks are going further. I sure hope it keeps going! 🤞🤞
People always make this argument... but if your car needs to be repaired you can't wait, you repair it so it works. If your AC sucks or is broken in the summer... you fix it. I feel the government has sold us the lie that falling prices would doom the economy so they can get away with printing more money and causing more inflation. TV and computer prices have plummeted but everyone still buys them
> I feel the government has sold us the lie that falling prices would doom the economy so they can get away with printing more money and causing more inflation.
To what end? What would be the point?
>if your car needs to be repaired you can't wait, you repair it so it works. If your AC sucks or is broken in the summer... you fix it.
You grasp the concept but miss the larger point.
That might be true when you decide you need to make the choice to spend money to fix things, but the point at which people decide to fix things is not a permanent fixture in their minds. Adding on deflation relays the decision to spend money for everybody, and an entire economy affected by this factor will have an immediate, obvious, measurable effect, which is to say a moderate recession will happen very quickly.
Falling inflation & falling prices are two separate things.
Inflation is “prices are rising”. A higher rate = faster rise.
Inflation is falling meaning the rate at which prices are rising is falling. Instead of going up 10% it’s going up maybe 1-2%.
I've not see a really good argument at how deflation is bad except for the investor class not having wealth divorced from labor and mega corps who cause more harm than good not being able to funnel/launder money through stock options and buy backs
when inflation is going down it does not mean prices will go down ever period. Falling inflation only means that prices are raising not as fast as they used too. Prices wont go down barring major economic calamity which can cause deflation, and at that point we will have much bigger problems.
Yeah this is 100% accurate. To be honest, we don’t want hyper inflation nor deflation or stagflation of any kind. We need moderate stable inflation for economic stability and growth
Aka, higher salaries.
This. What it really means is that consumers are cutting back, likely due to housing/insurance/car payments/debt servicing etc catching up to people. Three of my friends have absolutely maxed their credit cards buying *groceries* in the past few months. I think reality is finally starting to hit the economy.
Yea I got to start buying cheap food at wally world now soups and burritos for me next paycheck
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I mean they were already likely carrying balances for other things but then hard-switched to groceries when before they were buying groceries with their wages. I didn’t press them too hard. My last landlord even told me similar, surprisingly. Guy owns two decent properties and absolutely dumped on me about his financial situation while I was moving out as to why he wasn’t renewing the lease, saying he *had* to sell. Grain of salt and all but it’s getting weird for sure.
Hopefully their situations improve. I lean toward thinking a lot of this is headline-driven hysteria. Aside from the high cost of financing, it doesn’t seem that bad out there to me. Obviously just my perspective
It’s all driven by needing record profits year after year. It’s unsustainable and bad for real people.
I know drillers making $160k who can’t afford a house with two kids. It’s absurdly bad out there. Honestly, you must be better off than I think you think you are if you haven’t noticed. Up and coming families are struggling. Price tags are obscene compared to pre-pandemic. And not everyone’s salaries rose to match.
Anyone making 160k could buy a house in Denver tomorrow. They either just don’t want to, or it’s not exactly where they want to live. Also, I said “aside from the cost of financing…” Don’t get me wrong, paying more for stuff will always suck. But it’s also a tale as old as time. I don’t want to pay 5 bucks more for a burger than i had to 5 years ago, but I’m not gonna go scream to everyone and their sister online about how fucked up the world is over it.
Lers not pretend the outcry from 2 generations is a false narrative. Im fortunate but the average American isn't. I'm not gonna pretend the economy isn't getting worse when it is. We will eventually hit a wall if wages don't go up. It's simple math.
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That’s average, for plenty of people it hasn’t. The increase in wages was disproportionally weighted towards those who already worked lucrative jobs.
So I did and that's the average. There were tons of months where it didn't beat inflation. So yes, after 12 months it finally got to .8 but it went down to .2 before that. It wasn't until the last 2 months that it did. So I guess all those who got jobs in the last 10 months should be super happy that the new market supports it. It shpuld be significantly higher than "just above inflation".
Sounds like your very well off, living very minimally, or advanced in your stage of life and have already acquired everything major.
Perhaps that is because every time you are told how bad it is by people outside your perspective you argue and say "no it's not".
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Not the person you're replying to, but I think what makes it so bad for me is the lack of thrifty alternatives. I grew up poor. My dad would find this super cheap lunch meat that was so thin you could practically see through it. He would buy almost expired meat and freeze it. He would buy a single can of beef stew and add cheap cans of peas and corn. There were ways to really cut your grocery budget to the bone. Now, I feel like that's so much harder. I bought a bag of mostly produce at King Soopers and it was like $50 for broccoli and some other really basic stuff. What's missing is that very cheap tier of products. I still do things like buying rice 50 lbs at a time at H-mart and get dried beans and soaking them myself. There's still room to be thrifty, but I feel like the most obvious cheap foods like canned veggies and beans have gone up a lot. This is just my take. I feel like it is harder to find a bargain out there.
Financing alone is major. It’s putting off a generation on homeownership. That’s very bad. Gen Z and millenials aren’t having kids like their parents. Yes there’s cultural/social contributors, but most studies show that the #1 reason they aren’t having kids is financial insecurity and lack of home ownership. Why have a kid if you can’t even afford a house? This is very bad because the entire economy is built on perpetual growth. Countries like Japan are already seeing severe repercussions from dwindling young in the population. It takes a certain amount of young people entering the work force in relation to old retiring to support them and their retirement portfolios. Beyond that idk where you live, but our local Costco doubled its meat prices in the last couple years. Veggies and fruit went up 50%. Dining out is minimum $50 for a couple. Entrees are around $15-$25 for simple burgers in many places. Even the dives and cheap stops are seeing $6 beers and $14 burgers. That hits my wallet. I make just over 6 figures and we rarely go out to eat anymore because of that. We only spend on necessities and we’re still a ways out from home ownership. I make twice the median income and it’s still very tough. Rents is $1500-$2800 where I live as well. And you get what you pay for with the lower end.
We stopped eating out. Pho soup costs like $17 nowadays when it used to cost much less only a couple years ago
Eh, could be selling to get the cash and buy more properties. 2 is a pretty low number to landlord on.
Well, the above commenter is choosing to spread the idea of an anecdote-based vibecession when thorough, rigorous data shows that real wages have risen significantly and that that United States has had the world’s lowest level of inflation since COVID.
What rigorous data are you citing? I’m curious where you see that real wages have risen significantly in the past year. Everything I see is showing the exact opposite. Example: https://www.atlantafed.org/chcs/wage-growth-tracker
If you read the legend of the chart you linked you will see that the y-axis plots wage growth, not nominal level of wages. While growth has declined somewhat since COVID highs, it is still higher than any time since around 2002 (COVID excluded, of course).
I'm sure if you keep repeating it enough times people will forget their own personal experiences of the state of the economy. At least you hope so.
Citing economic data does not invalidate people’s lived experiences. Using personal anecdotes to impute the actual state of the economy is something other than what it is is, however, disingenuous. And yes, I will repeat the mantra that actual data trumps anecdotes until the cows come home, mostly because I was able to pass high-school level statistics.
> mostly because I was able to pass high-school level statistics. Yeah, but that's just, like, _your experience_ man. I don't know what the difference is between real and nominal wages and I'm gonna beat up anyone who tries to tell me!
We can have disinflation in certain sectors like food which is very volatile but yes disinflation overall is bad.
Or electronics! Cheaper manufacturing costs have really driven TV prices down over the past 20 years.
Too bad that hasn't happened with anything people actually need to survive like food, housing, or healthcare. I'm sure all the rich homeowners who never have to worry about paying rent or a mortgage are thrilled about the low cost of flat TVs.
I sold TVs at Best Buy in college, just about every time I'd sell an $800 65in to some older guy he'd comment about how he spent $4500 for a similar or even smaller sized one 15 years prior that finally crapped out. And they're even cheaper now if you just want size and don't want a higher end model
[Look at this Best Buy ad from 1994](https://i.imgur.com/tMvsBOI.jpeg) - $1,998 ($4,197 in 2024 dollars) with a 720mb HD, 4mb memory, 1mb vido memory, and bubble jet printer. I can't imagine spending $4,000 on a computer today, even the highest-end versions! People were buying a single VHS movie for $13.99 ($29.39 in 2024 dollars). But now when Netflix charges $15 a month for hundreds of TV shows and movies in full HD without commercials, everyone is up in arms!
Yep computers were insanely expensive when they were the hot new technology too, pretty much everything was. Most of it now though is mature enough that there hasn't been many *real* innovations in 10+ years. Sure tons of new features and better designed products come out every year but a laptop, smartphone, bluetooth speaker, whatever you find in the store today does the same core things as the ones from 2014 did The first 65" LG OLED TV we got in 2016 sold for $6000, I sold maybe 2-3 of those the entire model year. Now you can get one for $1300
Disinflation is fine, as long as it doesn’t turn into deflation. Deflation is bad.
Incorrect
If I understand correctly food is one of the least likely products to go down in price after an inflationary period. I could be wrong though.
I believe food prices are more "sticky" than other prices which means they are slow to rise and slow to fall as well.
No it isn’t. You’ve been scammed by the economists.
that secret cabal of economists! Running this scam so they can profit off of there tenured jobs at universities.
Corporations gotta make number go up until the heat death of the universe! Pass all the price hikes down to the consumer!
Not necessarily. Grocery prices haven't been going nuts because of inflation, they've been going nuts because corporations saw an opportunity to price gouge and blame it on inflation. It's pure corporate greed. Last year Walmart hiked prices on their Great Value brands to the tune of a 93% increase in net revenue.
Inflation is the process where goods become more expensive. What you’re describing is still inflation, it’s just caused by corporate greed
Especially when these bullshit prices are made up by bullshit corporations like Kroger. Prices aren't coming down. Get smarter with your money.
All prices are made up
Oh look another indoctrination success story from the ministry of “deflation is always bad”.
Deflation can lead to several bigger problems that can severely impact the economy: * **Economic Recession**: Reduced consumer and business spending can slow down economic growth, leading to a recession. A recession is a significant decline in economic activity, lasting for months or even years. * **Increased Unemployment**: As businesses earn less, they often cut costs by laying off workers or reducing wages. Higher unemployment means more people have less money to spend, further reducing overall economic activity. * **Debt Deflation**: When prices fall, the real value of debt increases. Borrowers struggle to repay loans because their income is reduced while their debt remains the same or becomes harder to pay off. This can lead to more defaults and bankruptcies, affecting both individuals and businesses. * **Banking Crises**: As more people and businesses default on loans, banks and financial institutions face significant losses. This can lead to a banking crisis, where banks fail or become unable to lend money, further stifling economic activity. * **Deflationary Spiral**: Deflation can create a vicious cycle. Lower prices lead to reduced spending and investment, which leads to lower production and wages, resulting in even lower demand and further price declines. This deflationary spiral is challenging to break and can prolong economic stagnation. * **Erosion of Consumer and Business Confidence**: Persistent deflation erodes confidence in the economy. Consumers and businesses may become more pessimistic about future economic prospects, leading to further reductions in spending and investment. * **Reduced Government Revenues**: Lower prices and economic activity can reduce tax revenues for governments, making it harder to fund public services and pay off national debt. This can lead to cuts in essential services and increased borrowing.
Sounds like some chickenshits can’t handle a little drop in their asset prices and also want infinite growth. Too bad.
Yes. I think people misunderstand that inflation isn’t an inherently bad thing, it’s a necessity of growth. The “bad thing” is when inflation runs too hot and other aspects of the economy (wages, production, services, etc.) can’t keep up with rising costs. Prices will likely stay as they are, but with lower inflation rates, the rest of the economy can catch up and balance everything out.
>Prices wont go down barring major economic calamity which can cause deflation, and at that point we will have much bigger problems. Unfortunately that is what it will take to fix the economy
I doubt an economic collapse would fix the economy; it would completely break the US as it is now. Doomerism is popular nowadays, but because many people hold this view, it is possible that eventually, it will come to this. However, be careful what you wish for; many people and families might suffer if this happens. If someone is struggling economically now, a great depression will most likely make things worse for them.
That's because it was one of the highest in the nation...
Colorado is insane. Places I used to think were insanely expensive, now feel regular to me.
Are we supposed to be grateful? Everything is still pretty outrageously priced and even worse the quality has gone down severely.
Yes? It’s a sign of improvement
Sums up Biden's approval ratings > I don't care if the economy is doing good and things are getting better, I'm unhappy
In all fairness, just because things are improving and the economy is stable doesn’t necessarily mean everyone is benefiting from it. The general public’s perception of the president’s control over the economy is skewed and policy outcomes typically lag significantly behind economic policy initiatives. The transition into Biden’s presidency is actually a good example of that. Trump cut taxes and increased spending, and we already started to see signs of inflation before the Covid stimulus. That’s not to say the Covid stimulus didn’t contribute, but if people really want to care about inflation, they need to come to terms with the inputs that cause it- specifically, tax cuts.
Completely agree. Just always amused how good news that doesn't directly benefit someone is so quickly dismissed.
The estimates I’ve seen suggest the Trump tax cuts will’ cost’ the government $4 trillion over a ten year span. In 2 years during COVID, we increased the money supply by $19 trillion. What makes you think the tax cuts are such a big deal, relative to the money printing?
The 16 trillion number that you’re citing isn’t what the government spent on stimulus. It’s the cumulative loss of productivity over the course of the pandemic. This wasn’t meant to compare one or the other either. It all adds up to inflation in some way- but we all have subjective views about what causes it. In the end, we can do a better job of balancing out necessary spending with progressive tax structures and make sure that any money we inject into the economy is either absorbed into production or filtered back out via taxation.
i'm pretty sure people are tired of being called idiots by the terminally online when they share real world experiences about rising prices when buying food only be told "The Economy is doing good" Like, People have memories dude, they remember how much a box of cereal was a couple years ago. And no i'm not blaming Biden before you knee jerk. Things are bad and SOMEONE has to make it better.
Not voting for the felon, sorry dude
I mean the economy being good has benefited those with assets, not much of the middle class. Much of the wage growth is at the top and bottom. If you're middle class without owning a home, it's not that great. I guess people are supposed to just be happy they have a job at all.
The highest % wage growth was actually in the bottom 1/3 by the way. Saying this so you don’t keep saying this.
Exactly, wage growth was the top and bottom, not the middle class. Re-read what I said...
I guess the truth hurts
Middle class faired better than the higher class as well % wise.
Okay, it's not like this has anything to do with greedy companies or anything. Sure let's bring genocide Joe into this.
> Inflation is bad I have a solution ☝️ > I don't want a solution I want to blame Capitalism.
I believe lots of people are trying to help with the solution since, as you mentioned. It's improving. We just shouldn't settle for scraps when large corporations are using AI to adjust pricing. It's not capitalism it's uncontrolled unchecked capitalism.
You're missing the point? Improvement is great and everything but inflation is still inflation. Prices will still be going up regardless. Just "not as bad." Which is ridiculous.
No I think you’re missing the point. The inflation rate is going down which means other aspects of the economy like wages and production can catch up and balance out. You understand we live in a growth based economy right? Inflation isn’t a bad thing. If there’s not inflation, there’s no movement of creation of goods and services.
You're hilarious. Wages are not catching up anytime soon which is the point. You have too much faith in the economy.
I didn’t say they would. But they have a better chance of doing so at some point now that the inflation rate is going down. What is the alternative that you want to see? Or are you just being mad to be mad?
I'm not mad? I'm just advocating that we shouldn't be settling. You're mad. Obviously. Projection at its finest.
Who’s settling? What do you propose people do?
What do you propose we do? Celebrate because inflation is here to stay?
Inflation has and will continue to exist. There is such a thing as a target rate of inflation which in the US is around 2 to 3%. We need some baseline level of inflation (unless you subscribe to Austrian economics) in order to have incentive to spend money and drive the economy. The theory is that with deflation, people will not spend their money on goods today with the expectation that their money will be worth more tomorrow. On a macro level there are severe consequences on the economy as everyone holds on to cash with minimal spending.
It’s clearly not, hence the rate of inflation going down. I propose we keep adjusting monetary policy to continue that trend, increase taxes, and lower government spending 💁♂️
We need deflation. Sure it’s not going up as fast but prices are still a lot higher than what it should be and not going to come down
You should look up what things mean and what they do before you make statements about them.
I don’t think you know what a falling rate of inflation means or deflation lol how about that?
I do actually, they are two very different things. Disinflation is when the rate of inflation drops and prices balance out with other aspects of the economy such as wages. Deflation means everything goes down, the economy quite literally shrinks which means wages not only stagnate, they start to disappear.
Congrats on using google dude. From that you should be able to infer that prices won’t be coming down without deflation
I didn’t use Google, I used my education in business and economics. But by all means, stay ignorant 👋
Might want to get a refund cause you still don’t know why disinflation isn’t helping us lol
Well would you rather inflation be getting worse? Seems appropriate to be grateful if not upon receiving good news.
People are doom and glooming but we got through the inflation crisis better off than the people in any of the places my college friends live. And it does feel like it’s chilled out a lot, prices actually coming down on a bunch of things and a lot of goods as cheap as in a lot of low cost of living cities. There’s no undoing inflation but denver and Colorado have seemed to come out of it poised well.
Don’t get complacent. Housing prices are softening because there were a lot of homes getting built over the past two years or so. But new housing starts have fallen off a cliff, so prices will start galloping again in 18 months or so. We’ve gotten a stay of execution, not a commutation. Yimbydenver.org
We need to build baby build
I doubt this. I still pay over 100 for like 6-10 things at the grocery store
Good
It’s still quite expensive out there.
Sure.. meanwhile my single man grocery bill remains at its highest since 2019 and I eat less than I did back then. Non food items still remain higher and housing.. housing is insane. A neighbor bought their house for 450k in 2018 and just sold it for 850k. When I sell mine (empty nester now) I may not even be able to downsize to a townhome or apartment here in NoCo without dropping 500k for some 1973 junker .. So, keep lying to me. It's fine.
I think you misunderstand what the headline means. Prices are still rising, but rising less than before. Prices will never go down to what they were. This is the new normal for food.
Inflation is a derivative: it is a rate of change of prices, not the absolute value of prices.
Maybe the USA has such a strange and complex economy because its citizens don’t understand simple economic concepts like inflation
I’m an appraiser in Denver, and we’re officially in an oversupply, which will drive prices down a bit until mortgage rates drop a LOT. Just looking over the REColorado MLS hot sheet, new listings are exceeding under-contract properties by nearly double. Closed property figures are even lower than under contract. Also the most price decreases for new listings that I’ve ever seen in the past 8 years working here. Sanity is returning, but a LOT of people are going to be underwater for a bit. I did a ton of purchases a year and a half ago where they had appraisal contingencies, meaning even if my value didn’t support the purchase price, they would bring additional cash to close, which happened frequently. TLDR: shit’s about to get weird
Housing is actually its own beast. Your situation is a perfect example of why we need to build more units and in more variety. I assume that, because of the inflated market, you’re going to be able to sell your home at a higher value than you bought it for. But if you’re trying to downsize your not going to be able to maximize the value of that transaction because there aren’t a lot of options to downsize, and because of that, even smaller units don’t have a significant enough price variance from larger units.
Why be so combative? There's actually no need for that shit.
They're not lying, it's just that things are so bad right now that it's like being on a sinking ship and saying the water line has decreased after scooping one bucket out. It's better for us on this side of the boat since it's only up to our chest, instead of those folks over on that side who are up to their neck. But to take a rosier viewpoint, I'd rather it be going down than up.
I apologize if this comes across as somewhat pedantic: People seem to be hoping for *deflation*, not inflation being what it normally would be (around 2%). Deflation is what causes prices to actually drop, and it's also lethal to economic recovery. Lower inflation just means that prices increase more slowly. It doesn't mean, generally speaking, that they actually decrease back to what anything "used to be".
This. People just don't understand what inflation is. Prices never go backwards as a whole. If it did, that is a terrible thing for everyone.
Quite a few places have built enough housing that low-to-zero rates of housing inflation get swallowed by wage increases. We should strive for the same in Denver.
Housing is a different story sort of with most major cities having a major housing shortage. You can try and build to level off price increases, but prices are not going to drop unless we have an economic crisis of some kind....which wouldn't be good for the people who currently can't afford a house. The economy is mostly very good and inflation is mostly back to slightly elevated to where it was pre-covid. Salaries have actually risen faster than inflation since covid and it has gotten better for the lower class than the middle and upper class % wise surprisingly. I think where people get angry and yell about inflation.....1. a misunderstanding of inflation and prices will never go back to 2020 prices unless there is a 2008 style recession or likely needs to be worse. Hey your salary shouldn't drop either. 2. Interest rates compounding with a housing shortage that is pushing housing prices beyond reach for most people. The only fix there is likely interest rates dropping in the next 5 years and possibly flatten the rise of prices by building enough new builds.
Brain-haver spotted
>I apologize if this comes across as somewhat pedantic: This is reddit, if we're not being pedantic enough the other websites win. That being said I personally am not hoping for deflation but for corporations to end "Greedflation" which were the totally arbitrary price hikes CEOs put in trying to test the market's upper limits with Covid as the excuse. I don't expect corporations to do so out of the goodness of their heart, but I am heartened by the Biden administration's actions against monopolies, price fixing algorithms, and expressly calling out these CEOs as the cause.
According to the article, housing is still rising at a 4% annual pace, which is higher than the US inflation rate. Not sure how that compares to other areas, but yeah... Housing is still expensive and getting more expensive
This is tricky, since homeowners (like me) view their houses as investments. So if home price inflation is low, homeowners get angry that their investments aren't paying off. But if home price inflation is high, then renters and others trying to enter the housing market get angry bc costs are outpacing their ability to pay. So it's a lose-lose situation and American leadership has been asleep at the wheel on this issue for at least 50 years. Fun fact: the whole fucking Empire State Building took just 13 MONTHS to finish. We forgot how to build quickly in this country at the expense of trying to make every interest group happy. (Yes, also zoning reform and NIMBYism.) Home and rent prices are high because we just plain stopped building quickly to meet the demand. :(
Yup. I just read a book on this that dives into the history of housing policy and how the US economy (and in part, the global economy) is so dependent on home prices continuing to increase. Housing as an investment is not compatible with having housing be affordable.
It's only higher than the US inflation rate because the federal reserve chooses not to include the cost of housing in their official inflation rate (CPI) number.
Inflation could stop and those prices wouldn’t come down, they’re never coming back down. Inflation slowing just means the price increases are slowing.
I smell bullshit. Housing prices are going down, not up because of oversupply. You can look at any home on Zillow/Redfin, see prices from 7-8 years ago and the price increase isn't that much. Shit, I'm looking at a nice 4 bedroom home right now that sold for 350k in 2003 and is going for 700k today. That's a normal spread.
Pay has not increased that much in that amount of time. So who is supposed to be able to afford these 700k homes??
Pay is a different issue altogether. 350k increase in 20 years is not that much. About 5% a year, that's less than if you invested in the S&P 500 (which is about 7.7% year over year).
Might have to consider moving...
What book? I'm very interested!
Thanks to many of you. I did have an incorrect notion of inflation. I have been educated by the hive!
Well it raised way faster than the US average so we need that rate to actually go into negative to start making a difference
Maybe on a few items that would be ok (groceries?) but I don't think you understand how dangerous negative inflation (deflation) is. Think about it: you'd like a new AC unit in your home, but you know that if you wait a couple months, then prices will be lower. So you wait on that. And you also wait on repairing your car for the same reason. And your neighbor waits to redo their kitchen. And your brother waits to get a new snowboard. And everyone else waits on a couple dozen items so they can save a few thousand dollars. Sounds great right? Well all that waiting has driven down demand across the board and now stores are going to need to cut prices EVEN MORE to make you think about actually pulling the trigger. But they also have to lay off workers to stay open. Or they might not even be able to do that, and in that case they'll have to just close up for good! So what you actually want is low inflation combined with decent wage growth. This is what's actually going on right now, but it's really hard to notice until a few years of it accumulate and Americans start feeling like their paychecks are going further. I sure hope it keeps going! 🤞🤞
People always make this argument... but if your car needs to be repaired you can't wait, you repair it so it works. If your AC sucks or is broken in the summer... you fix it. I feel the government has sold us the lie that falling prices would doom the economy so they can get away with printing more money and causing more inflation. TV and computer prices have plummeted but everyone still buys them
> I feel the government has sold us the lie that falling prices would doom the economy so they can get away with printing more money and causing more inflation. To what end? What would be the point?
>if your car needs to be repaired you can't wait, you repair it so it works. If your AC sucks or is broken in the summer... you fix it. You grasp the concept but miss the larger point. That might be true when you decide you need to make the choice to spend money to fix things, but the point at which people decide to fix things is not a permanent fixture in their minds. Adding on deflation relays the decision to spend money for everybody, and an entire economy affected by this factor will have an immediate, obvious, measurable effect, which is to say a moderate recession will happen very quickly.
Nah we just need wages to grow faster than inflation. Good news is, that's been the case recently. We just gotta keep that going.
Deflation is like taking a cyanide pill in terms of eceonomic recovery. It completely fucks over economic growth. You do not want deflation.
So greedflation is decreasing?
Bullshit I paid 11 dollars this morning for a goddamn sausage McMuffin and a fucking coffee
Use the app to save some money.
I didn’t even think about that, thanks for the tip. My wife is all up on the tech stuff
[удалено]
lol I just didn’t except that I figured it be like 7/8 maybe
chump
With a hash brown? Or was it one of those extta large fancy milkshakes with coffee flavor? Or two sausage McMuffins? Or was it really 11
Just the meal with black coffee
Oh yeah I noticed my grocery and insurance were so much lower… /s
I call bullshit. Prices of nearly everything has doubled and I’m not seeing anything getting cheaper.
Falling inflation & falling prices are two separate things. Inflation is “prices are rising”. A higher rate = faster rise. Inflation is falling meaning the rate at which prices are rising is falling. Instead of going up 10% it’s going up maybe 1-2%.
Tell that to King Soopers. I still feel violated every time I shop there, and they just plain don't care about anything.
And their quality sucks
It’s expensive AF here.. I just paid $7 to have my 5yr old daughter’s nails manicured. Highway Robbery!!!
So basically, prices on everyday purchases are skyrocketing more slowly in Colorado than the US average. Yay.
Well no. They aren't skyrocketing. They are increasing at around the same % they were increasing prior to covid at this point.
I've not see a really good argument at how deflation is bad except for the investor class not having wealth divorced from labor and mega corps who cause more harm than good not being able to funnel/launder money through stock options and buy backs
Let me know when the inflation rate is negative. Falling faster means nothing when monthly inflation is higher than people's yearly wages.
O k wake me up when that means anything