Real Reports of Price Inflation

[Market Harmony]

If you didn't already know, government figures of inflation are distorted images of actual real-life inflation. At best, they are lagging indicators. And, at worst, they are wildly inaccurate portrayals of what you and I face as consumers of stuff. Essentially, the figures are worthless gobbly gook. So, lets talk about boots-on-the-ground observations of prices around you. Here's an example:

I bought an attic gable fan from Lowes (item# 813964) on March 9, 2018 for $177.55, free shipping. Today, I decided that I would like to get another one. Today's price is $199.00. There's nothing like a 12% increase in a month!

[Market Harmony]

Ha! After a little phone work, I learned that Lowes will do a price match over the phone, given that you have already paid for the item. I had gift cards, bought the fan online, called Lowes with my order#, told them how to find exact item from Walmart, and they gave me a $30 refund. Because I paid with a gift card, they are going to send a new gift card to me. It took about 15 minutes in all to save the $30... seems like it was worth it!

[Thogey]

Sound's like a seasonal increase. I'd imagine the attic gable installation rush doesnt start till spring in PA.

I also would avoid lawnmowers and bbqs

[natsb88]

I bought some 1/4" birch plywood at Lowe's 4th quarter of 2016. I started a project December 2017 with the material I had left and needed a little bit more to finish. Went back to the same Lowe's, same shelf, same SKU number, same description of 1/4" birch plywood, same price (from what I remember). Got it home to discover it was 22% thinner. The sheets I had left over from the previous year were 0.240" thick, the new stuff is 0.185" thick.

[68Camaro]

Grcoery wise, loss leaders still provide a deceptive view of normalcy. Bananas still run 59 to 69 per lb. A dozen eggs variously 1.29 to (today) 1.99. But (as if we're not paying attention, and many probably aren't) the packs of 18 eggs (same egg size and brand) are 4.59. What? That doesn't make sense. But that's the real price. 3.06 per dozen.

[Recyclersteve]

Deviating a bit from the topic, but still relevant IMHO.

Walmart sells small 3.5 oz. dogfood squares with the brand Cesar (owned by Mars, the candy bar company) on them for 66 cents each (18.9 cents/oz.). Fair enough, except that a 24-pack is $16.88 (20.1 cents/oz.). When you buy in bulk, you should get a DISCOUNT. You should not have to pay a premium!

Now back to the subject of inflation. Here are areas where I imagine it won't be too difficult to find price increases in the near future:

1) Sports (teams raising prices for individual tickets and season tickets- gotta pay those multi-million dollar salaries);
2) Restaurants (since lots of employees earn minimum wage and that has been going up the past couple years or so); and
3) Postage (though we just did have a rate increase)
4) Healthcare
5) School tuition

The whole thing about inflation can be tricky because right now we are having both inflation and deflation at the same time. Areas that are deflationary:

1) Computer related stuff (technological advances make my iPhone much cheaper and more powerful than a computer was even a few years ago)
2) Brokerage commissions and fees (Schwab's commissions for brokerage stock trades in the past several years went from $9.95 to $8.95 to $6.95 and are now $4.95. They have a couple hundred ETF's that you can trade with ZERO commission. Back in the late 1990's I remember some trades costing $300 to $2,000 each, and even that was cheap vs. the competition. 10,000 shares of a $1 stock traded online about 15-20 years ago was exactly $300 (3 cents per share)- now that same trade is $4.95. Schwab is not alone- the industry is getting much cheaper.)
3) Airfare (one that I just don't get is airfare. I used to fly coach in the early 1980's on business trips and frequently would pay $400-450 to fly from San Francisco to Seattle or Denver. Here we are about 35 years later and that is still roughly what I would expect to pay. Amazingly, jet fuel, employee wages and the cost of aircraft are all much higher than they were 35 years ago. Also amazingly, the airlines are profitable and even Warren Buffett has investing in this industry, which he has criticized in the past. Not sure what gives here.)
4) Long distance phone calls (remember we all had a separate section on our phone bills for long distance calls- now any time I want to make a long distance call I can use my iPhone or even Skype from overseas while traveling)

My point here is that it is ok to keep track of inflation, but we need to be fair and give credit where credit is due. I don't want to be a total pessimist.

[IdahoCopper]

3) Airfare (one that I just don't get is airfare. I used to fly coach in the early 1980's on business trips and frequently would pay $400-450 to fly from San Francisco to Seattle or Denver. Here we are about 35 years later and that is still roughly what I would expect to pay. Amazingly, jet fuel, employee wages and the cost of aircraft are all much higher than they were 35 years ago. Also amazingly, the airlines are profitable and even Warren Buffett has investing in this industry, which he has criticized in the past. Not sure what gives here.)

Computers and the Internet have optimized the filling of passenger seats. Planes now fly with far fewer empty seats. That's why prices and profits are steady, regardless of higher airline costs.

[justoneguy]

I just flew round trip to Portland.
The cost for 1 piece of luggage was almost as much as for both of us.
$187 Total !!

[Recyclersteve]

3) Airfare (one that I just don't get is airfare. I used to fly coach in the early 1980's on business trips and frequently would pay $400-450 to fly from San Francisco to Seattle or Denver. Here we are about 35 years later and that is still roughly what I would expect to pay. Amazingly, jet fuel, employee wages and the cost of aircraft are all much higher than they were 35 years ago. Also amazingly, the airlines are profitable and even Warren Buffett has investing in this industry, which he has criticized in the past. Not sure what gives here.)

Computers and the Internet have optimized the filling of passenger seats. Planes now fly with far fewer empty seats. That's why prices and profits are steady, regardless of higher airline costs.

I did also forget about flights being intentionally overbooked.

[everything]

I notice it more in services, i.e. plumbers charge by the minute, health care system is doing that now as well. With every day products they keep the price the same and build products that wear out quicker, like i.e. right after the warranty expires. Food is no exception, CAFO farms and large farms have made food so much easier to produce, it remains cheap but the product has less nutrition.

Savvy consumerism tends to feed into this dynamic, and being able to scam people, corruption is rampant but legal due to under writing standards. I guess one example is the last RE crisis, subprime, trenches, bonds, hedge funds, etc. Lol, they cost more when stock markets are up, stock price inflation anyone?

A good example, going back to health care, my friend goes to the doctor three times, they charge him each time and do nothing, but in order to get his salmonella infection diagnosed and cured, he has to get on a plane to Mexico where they have doctors who are not steeped in liability compared to American doctors who know if they do nothing they can't get in trouble for anything, i.e. they have no quality control departments. It's about what you can get away with, and collusion exists within systems/networks. They took turns ripping him/us off via charge offs to insurance companies without doing the work. In talking to other people I know who finally got their diagnosis, the U.S. health care system prefers to wait until the condition costs more to treat, it's a better deal for them.

Many, many women I know don't bother with car repairs, they just buy or lease another one, they know the industry preys on women and rips them off because they are known to be more naive regarding auto dynamics.

Some of my examples may not seem directly correlated to inflation, but I think inflation comes in many forms.

[Thogey]

Many, many women I know don't bother with car repairs, they just buy or lease another one, they know the industry preys on women and rips them off because they are known to be more naive regarding auto dynamics.

Some of my examples may not seem directly correlated to inflation, but I think inflation comes in many forms.

The car repair industry preys on everyone. Women just think it's because they are women. They just deal with it differently because they don't wan't to hassle with the car and I don't blame them.

Either you pay for the repair or you pay for the depreciation of new car.

The big issue now (inflation)is new cars wear out before you pay them down. So do you fix a POS 5 year old hundai that is not paid off? Banks are going to lose this bet.