Headline in the financial section:

Consumers Keep Spending Brislky Despite Persistent Inflation

What's with this "despite"? When you find that the cheese in your
fridge is starting to mold, you don't save it for later.

--
Joy Beeson
joy beeson at centurylink dot net
http://wlweather.net/PAGEJOY/

On 10/28/23 7:52 PM, Joy Beeson wrote:
> Headline in the financial section:
>
> Consumers Keep Spending Brislky Despite Persistent Inflation
>
> What's with this "despite"? When you find that the cheese in your
> fridge is starting to mold, you don't save it for later.
>

Hopefully we won't reach the point of spending all our money at
lunchtime before it gets even more inflated in the evening.

--
Gary McGath http://www.mcgath.com

On Sat, 28 Oct 2023 21:34:14 -0400, Gary McGath wrote:

> On 10/28/23 7:52 PM, Joy Beeson wrote:
>> Headline in the financial section:
>>
>> Consumers Keep Spending Brislky Despite Persistent Inflation
>>
>> What's with this "despite"? When you find that the cheese in your
>> fridge is starting to mold, you don't save it for later.
>>
>>
> Hopefully we won't reach the point of spending all our money at
> lunchtime before it gets even more inflated in the evening.

I doubt that conscious awareness of inflation enters into
consumer spending decisions in any significant way.

On 10/29/23 3:10 AM, Charles Packer wrote:
> On Sat, 28 Oct 2023 21:34:14 -0400, Gary McGath wrote:
>
>> On 10/28/23 7:52 PM, Joy Beeson wrote:
>>> Headline in the financial section:
>>>
>>> Consumers Keep Spending Brislky Despite Persistent Inflation
>>>
>>> What's with this "despite"? When you find that the cheese in your
>>> fridge is starting to mold, you don't save it for later.
>>>
>>>
>> Hopefully we won't reach the point of spending all our money at
>> lunchtime before it gets even more inflated in the evening.
>
> I doubt that conscious awareness of inflation enters into
> consumer spending decisions in any significant way.

During the Weimar hyperinflation, people did exactly what I said.

I don't know whether the knowledge that money in the bank at 0.1%
interest will be worth less in a year affects people's current spending
decisions, but it certainly takes away an incentive to save.

--
Gary McGath http://www.mcgath.com

On 10/29/23 3:10 AM, Charles Packer wrote:
> On Sat, 28 Oct 2023 21:34:14 -0400, Gary McGath wrote:
>
>> On 10/28/23 7:52 PM, Joy Beeson wrote:
>>> Headline in the financial section:
>>>
>>> Consumers Keep Spending Brislky Despite Persistent Inflation
>>>
>>> What's with this "despite"? When you find that the cheese in your
>>> fridge is starting to mold, you don't save it for later.
>>>
>>>
>> Hopefully we won't reach the point of spending all our money at
>> lunchtime before it gets even more inflated in the evening.
>
> I doubt that conscious awareness of inflation enters into
> consumer spending decisions in any significant way.

During the Weimar hyperinflation, people did exactly what I said.

I don't know whether the knowledge that money in the bank at 0.1%
interest will be worth less in a year affects people's current spending
decisions, but it certainly takes away an incentive to save.

--
Gary McGath http://www.mcgath.com

Joy Beeson <jbeeson@invalid.net.invalid> wrote:
>Headline in the financial section:
>
>Consumers Keep Spending Brislky Despite Persistent Inflation
>
>What's with this "despite"? When you find that the cheese in your
>fridge is starting to mold, you don't save it for later.

Unless it's supposed to mold, of course.

The thing is that much of what people buy is stuff that they don't
really need at all. And in spite of modest inflation, they are still
buying just as much of it.

How many books does one person really need? Probably not as many as
I have, and yet I bought another eight books this weekend.
--scott

--
"C'est un Nagra. C'est suisse, et tres, tres precis."

Charles Packer <mailbox@cpacker.org> wrote:
>On Sat, 28 Oct 2023 21:34:14 -0400, Gary McGath wrote:
>> On 10/28/23 7:52 PM, Joy Beeson wrote:
>>> Headline in the financial section:
>>>
>>> Consumers Keep Spending Brislky Despite Persistent Inflation
>>>
>>> What's with this "despite"? When you find that the cheese in your
>>> fridge is starting to mold, you don't save it for later.
>>>
>>>
>> Hopefully we won't reach the point of spending all our money at
>> lunchtime before it gets even more inflated in the evening.
>
>I doubt that conscious awareness of inflation enters into
>consumer spending decisions in any significant way.

It may for very large expenditures, but certainly not for small items.
Back in the seventies, though, when there was far higher inflation,
it did enter into spending decisions for small items and that made
economic problems even worse.
--scott
--
"C'est un Nagra. C'est suisse, et tres, tres precis."

Scott Dorsey <kludge@panix.com> wrote:
> Joy Beeson <jbeeson@invalid.net.invalid> wrote:
>> Headline in the financial section:
>> Consumers Keep Spending Brislky Despite Persistent Inflation

>> What's with this "despite"? When you find that the cheese in your
>> fridge is starting to mold, you don't save it for later.

Right. It's my understanding that the government aims at a non-zero
inflation rate to encourage spending and discourage saving.

> The thing is that much of what people buy is stuff that they don't
> really need at all. And in spite of modest inflation, they are
> still buying just as much of it.

True. But would we be better off if nobody bought anything they
didn't really need? We could all live like Puritans, but our lives
would be less full of stuff and experiences. And of course those who
make, ship, and sell the stuff would be worse off. When England made
that experiment, after fighting a war to abolish the monarchy, within
about a decade they overthrew the Puritans and restored the monarchy.
They even sewed the head back on the king they had beheaded, and
beheaded Cromwell (who had died of natural causes years earlier).

> How many books does one person really need? Probably not as many as
> I have, and yet I bought another eight books this weekend.

Define "need." People need food, water, warmth, and air. Most people
throughout history never owned any books at all, and many of them
lived long and interesting lives.

You'll be pleased that I didn't buy any books this weekend. I had
planned to buy perhaps 20 at a used book sale at a local library,
despite most of my books being in storage. (I moved this summer, into
a smaller space, and had to put more than a hundred boxes of books,
each weighing around 50 pounds, into a self-storage unit for which
I'm paying hundreds of dollars a month in perpetuity.) But the only
reason I didn't buy any books this weekend is that rain was expected.
--
Keith F. Lynch - http://keithlynch.net/
Please see http://keithlynch.net/email.html before emailing me.

On Sun, 29 Oct 2023 07:10:23 GMT, Charles Packer <mailbox@cpacker.org>
wrote:

>On Sat, 28 Oct 2023 21:34:14 -0400, Gary McGath wrote:
>
>> On 10/28/23 7:52 PM, Joy Beeson wrote:
>>> Headline in the financial section:
>>>
>>> Consumers Keep Spending Brislky Despite Persistent Inflation
>>>
>>> What's with this "despite"? When you find that the cheese in your
>>> fridge is starting to mold, you don't save it for later.
>>>
>>>
>> Hopefully we won't reach the point of spending all our money at
>> lunchtime before it gets even more inflated in the evening.
>
>I doubt that conscious awareness of inflation enters into
>consumer spending decisions in any significant way.

Mostly true, when it's less than 10% or so. They do, however, when
it's over 100%. The inflation rate the Fed is trying to reduce, at
the moment, is something like 4%. But it's be at less than 1% for so
long that people are panicking over that.
--

Qualified immunity = virtual impunity.

Tim Merrigan

--
This email has been checked for viruses by AVG antivirus software.
www.avg.com

Tim Merrigan <tppm@ca.rr.com> wrote:
> The inflation rate the Fed is trying to reduce, at the moment, is
> something like 4%. But it's be at less than 1% for so long that
> people are panicking over that.

I don't think it has ever been less than 1% in our lifetime, at least
not for more than a year or two at a time.

For instance 50 years ago a copy of the Washington Post cost 10 cents.
Today it costs $3. That's an average inflation rate of about 7%.
--
Keith F. Lynch - http://keithlynch.net/
Please see http://keithlynch.net/email.html before emailing me.

On Sun, 29 Oct 2023 22:50:06 -0000 (UTC), "Keith F. Lynch"
<kfl@KeithLynch.net> wrote:

>Tim Merrigan <tppm@ca.rr.com> wrote:
>> The inflation rate the Fed is trying to reduce, at the moment, is
>> something like 4%. But it's be at less than 1% for so long that
>> people are panicking over that.
>
>I don't think it has ever been less than 1% in our lifetime, at least
>not for more than a year or two at a time.
>
>For instance 50 years ago a copy of the Washington Post cost 10 cents.
>Today it costs $3. That's an average inflation rate of about 7%.

The last 50 years includes the late '70s double digit inflation. Also,
50 years ago the Washington Post, like most newspapers, made most of
their money from advertising, and sold the paper at a loss, some
smaller papers even giving them away.

Note: 50 years ago was 1973, the year I graduated High School.

BTW according to
https://www.usinflationcalculator.com/inflation/current-inflation-rates/

Annual inflation rates over the last ten years were:

2013: 1.5%
2014: 0.8%
2015: 0.7%
2016: 2.1%
2017: 2.1%
2018: 1.9%
2019: 2.3%
2020: 1.4%
2021: 7.0%
2022: 6.5%
2023 to date: 3.7%

For a 10 year mean of 3%, mode of 7%, and median of 2% (if I
calculated the median correctly).

So, yeah, it only went below 1% for 2 years, but for 7 years it was
below 3%. I think 2% is the Fed's goal.
--

Qualified immunity = virtual impunity.

Tim Merrigan

--
This email has been checked for viruses by AVG antivirus software.
www.avg.com

On Sun, 29 Oct 2023 16:55:06 -0700, Tim Merrigan <tppm@ca.rr.com>
wrote:

>On Sun, 29 Oct 2023 22:50:06 -0000 (UTC), "Keith F. Lynch"
><kfl@KeithLynch.net> wrote:
>
>>Tim Merrigan <tppm@ca.rr.com> wrote:
>>> The inflation rate the Fed is trying to reduce, at the moment, is
>>> something like 4%. But it's be at less than 1% for so long that
>>> people are panicking over that.
>>
>>I don't think it has ever been less than 1% in our lifetime, at least
>>not for more than a year or two at a time.
>>
>>For instance 50 years ago a copy of the Washington Post cost 10 cents.
>>Today it costs $3. That's an average inflation rate of about 7%.
>
>The last 50 years includes the late '70s double digit inflation. Also,
>50 years ago the Washington Post, like most newspapers, made most of
>their money from advertising, and sold the paper at a loss, some
>smaller papers even giving them away.
>
>Note: 50 years ago was 1973, the year I graduated High School.
>
>BTW according to
>https://www.usinflationcalculator.com/inflation/current-inflation-rates/
>
>Annual inflation rates over the last ten years were:
>
>2013: 1.5%
>2014: 0.8%
>2015: 0.7%
>2016: 2.1%
>2017: 2.1%
>2018: 1.9%
>2019: 2.3%
>2020: 1.4%
>2021: 7.0%
>2022: 6.5%
>2023 to date: 3.7%
>
>For a 10 year mean of 3%, mode of 7%, and median of 2% (if I
>calculated the median correctly).
>
>So, yeah, it only went below 1% for 2 years, but for 7 years it was
>below 3%. I think 2% is the Fed's goal.

Sorry, I misunderstood what the mode is. It should be corrected to
2.1%, if I now understand it correctly.
--

Qualified immunity = virtual impunity.

Tim Merrigan

--
This email has been checked for viruses by AVG antivirus software.
www.avg.com

On Sun, 29 Oct 2023 17:09:34 -0700, Tim Merrigan <tppm@ca.rr.com>
wrote:

>On Sun, 29 Oct 2023 16:55:06 -0700, Tim Merrigan <tppm@ca.rr.com>
>wrote:
>
>>On Sun, 29 Oct 2023 22:50:06 -0000 (UTC), "Keith F. Lynch"
>><kfl@KeithLynch.net> wrote:
>>
>>>Tim Merrigan <tppm@ca.rr.com> wrote:
>>>> The inflation rate the Fed is trying to reduce, at the moment, is
>>>> something like 4%. But it's be at less than 1% for so long that
>>>> people are panicking over that.
>>>
>>>I don't think it has ever been less than 1% in our lifetime, at least
>>>not for more than a year or two at a time.
>>>
>>>For instance 50 years ago a copy of the Washington Post cost 10 cents.
>>>Today it costs $3. That's an average inflation rate of about 7%.
>>
>>The last 50 years includes the late '70s double digit inflation. Also,
>>50 years ago the Washington Post, like most newspapers, made most of
>>their money from advertising, and sold the paper at a loss, some
>>smaller papers even giving them away.
>>
>>Note: 50 years ago was 1973, the year I graduated High School.
>>
>>BTW according to
>>https://www.usinflationcalculator.com/inflation/current-inflation-rates/
>>
>>Annual inflation rates over the last ten years were:
>>
>>2013: 1.5%
>>2014: 0.8%
>>2015: 0.7%
>>2016: 2.1%
>>2017: 2.1%
>>2018: 1.9%
>>2019: 2.3%
>>2020: 1.4%
>>2021: 7.0%
>>2022: 6.5%
>>2023 to date: 3.7%
>>
>>For a 10 year mean of 3%, mode of 7%, and median of 2% (if I
>>calculated the median correctly).
>>
>>So, yeah, it only went below 1% for 2 years, but for 7 years it was
>>below 3%. I think 2% is the Fed's goal.
>
>Sorry, I misunderstood what the mode is. It should be corrected to
>2.1%, if I now understand it correctly.

And recalculating the median, after rearranging the data points into
ascending order, it should be 2.1%, the fifth and sixth values both
being 2.1%, as opposed to taking the 2 middle values as presented,
making the fifth and sixth values 2.1 and 1.9, respectively.
--

Qualified immunity = virtual impunity.

Tim Merrigan

--
This email has been checked for viruses by AVG antivirus software.
www.avg.com

Tim Merrigan <tppm@ca.rr.com> wrote:
> BTW according to
> https://www.usinflationcalculator.com/inflation/current-inflation-rates/

> Annual inflation rates over the last ten years were:

> 2013: 1.5%
> 2014: 0.8%
> 2015: 0.7%
> 2016: 2.1%
> 2017: 2.1%
> 2018: 1.9%
> 2019: 2.3%
> 2020: 1.4%
> 2021: 7.0%
> 2022: 6.5%
> 2023 to date: 3.7%

> For a 10 year mean of 3%, mode of 7%, and median of 2% (if I
> calculated the median correctly).

If I assume 2023 -- which is about 5/6 over -- will remain at 3.7%,
then at the end of 2023, the mean will be 2.7%, the mode will be 2.1%,
and the median will be 2.1%.

The mode isn't really meaningful in this context; it's 2.1% only
because that's the only number that appears more than once.

But there are lots of different means. There's a different power mean
for each real number. You raise every element to the Nth power, take
the average, and take the Nth root of the result. Where N=1 you have
the usual average, called the arithmetic mean. N=2 is called the
quadratic mean, or Root-Mean- Square (RMS). The RMS is useful for
measuring AC voltage, as X volts RMS AC has much the same effect
as X volts DC. N=0 (or rather the limit as N approaches 0) is the
geometric mean, so called because the geometric mean of the sides
of a rectangle gives the same area as a square whose sides are the
geometric mean. It's useful for finding the average of an exponential
distribution. For instance one minute is the geometric mean of one
second and one hour. N=-1 is the harmonic mean, useful when averaging
speeds. The harmonic mean of your speeds is the constant speed that
would give you the same trip duration. It's also useful in finding
equivalent resistances when you have resistors in parallel.

Then there's the arithmetic-geometric mean (AGM), in which you take
both of those two kinds of means of a pair of numbers, then repeat the
process with the resulting pair of means, ad infinitum. The two means
converge very rapidly. This is useful, not for actually averaging
data, but for rewriting formulas in terms of an AGM to get rapid
convergence. That's how it's possible to calculate trillions of
digits of pi, for instance. If you tried to use one of the simpler
formulas for pi, such as 4/1 - 4/3 + 4/5 - 4/7 + 4/9 - 4/11 + ...
you'd be lucky to get a dozen digits after weeks on a supercomputer.

"Mode" is the most common value. For some distributions, there are
two or more modes. Or every value is different, so you have to decide
on bin sizes, i.e. make an arbitrary choice of how close values have
to be to be considered equal.

"Median" is the value in the middle once the list is sorted in
numerical order. It's useful if there are outliers. For instance if
Elon Musk were to move to your small town, the average net worth of
its inhabitants would increase enormously.

ObFandom: Someone once humorously suggested that the fairest way to
weigh votes on future Worldcon locations is to average all of the
locations voted for. But it was pointed out that if just one joker
votes for another solar system, even if it's the closest one, and even
if 20,000 people voted for somewhere on Earth, the average would be
well outside our solar system. The median would make more sense here.
Or rather the epicenter of the median, since the median would probably
be deep underground. If the epicenter is in an ocean or other body of
water, the closest point of dry land would be used.

So which kind of mean is best for averaging inflation rates? Assuming
that by "average" you want the constant inflation rate that would have
resulted in the same price increase, then none that I've mentioned
will do. You want to turn them into price ratios by dividing them by
100 and adding 1, i.e. 1.015, 1.008, 1.007, 1.021, 1.021, 1.019, 1.023
1.014, 1.070, 1.065, 1.037, then taking the geometric mean by multiplying
them together to get about 1.34, then taking the 11th root of the result.
Or, equivalently, take the log of 1.34, divide it by 11, then take the
antilog of the result. You'll get 1.027, or 2.7%. That happens to be
close to the arithmetic mean, but it didn't have to be.

A separate issue is that I don't trust any of these official
statistics. I know how my spending has varied, and it has gone up
much more than that (ignoring rent, since I've moved twice since
2013), even though I live increasingly frugally. As for rent, I just
looked up the apartment complex where I lived in 2013, and the lowest
rent for any unit in that complex is 72% more than what I was paying
in 2013. That's more than *twice* the official 34%.

Many of my favorite foods have more than doubled in price since 2013,
even though I'm still living in the same general area and still
shopping in the same stores. Metrorail fares have also more than
doubled, even as Metrorail service has become much worse.
--
Keith F. Lynch - http://keithlynch.net/
Please see http://keithlynch.net/email.html before emailing me.