Do you mean to say that other European countries are lying? This proposition seems knee jerk.
Inflation can be computed by anyone, so I don’t even understand how you could lie about it.
Inflation can be computed by anyone, so I don’t even understand how you could lie about it.
It does not have to be perfect to be meaningful.
If not using basics like food, fuel, and pricing on rent or mortgage - what are we basing the numbers off of? If it's the stable price of a Spotify subscription, rather than real goods needed to survive, something is horribly off.
Sure bread is still roughly the same as it was. But living costs have absolutely exploded recently, and far far beyond the 9% indicated.
That seems... unlikely.
https://www.globalpetrolprices.com/United-Kingdom/gasoline_p...
At best it doubled, but that's not the same as "increased by 200%", which implies it tripled.
Historically for me real inflation is the formal EU number + 2%. So that means that they're usually about a 100% off as inflation has been low for a long time, until now.
If the cost of meat goes up so much that everyone starts eating dog food, the inflation print will barely rise at all.
It's not a real measure for QoL which I hope most people would accept as being what societies actually strive for.
In fact most measures like GDP and a few others have no real bearing on increased living standards. GDP per capita should be the only real number when talking about economic growth for starters. Even then catastrophes like natural disasters and war bump up those numbers due to rebuilding so it's still quite a rough metric to report on each year.
It's done because factually consumers buy different and producers produce different things over the years, and it's hard to impossible to observe/measure which substitutions are by necessity and which by preference.
[1] https://en.wikipedia.org/wiki/Price_index#Paasche_and_Laspey...
There's always an implicit older == smarter bias in society but I doubt many people who passed with good grades in high school economics are good at the basic concepts into their 30's.
Not to mention the MMT experiments that have been undertaken in the west over the last few years. I'm not even sure MMT proponents understand the consequences of such things. There's been a lot of resource misallocation that no one seems able to take responsibility for.
GDP, inflation, interest rates, etc are oft considered the main KPI's for politicians by the people who vote for them. It's a dismal science even for those well versed in its ways.
But most kids and adults alike probably find textbook economics and statistics as appealing as unsweetened oatmeal, and strongly prefer to consume sensationalized headlines and conspiracy theories. There's some tension between free choice and paternalistically nudging/forcing the population towards healthier stuff, that I wouldn't know how to resolve.
and for the US: https://www.bls.gov/cpi/tables/relative-importance/home.htm
The weights are based on estimates of how consumers actually spend on different goods and services, rather than on how much someone would need to spend for subsistence or survival.
So I agree with you, but the problem is that it is arbitrary, and the arbiters could be rigging the outcome with their choices.
It is deceptive though, if this number is not representative of people's actual cost of living and it is then used to adjust their income for inflation. How clear is it that this basket really represents an average household (today)?
Employer: "What do you mean, cost of living has gone up by 14%? Official inflation is 7%, but the best I can do this year is 3.5%."
Politician: "Inflation is X every year, so we increase pensions by X% every three years."
It's the decline of purchasing power over time based on a basket of goods / services. So it all depends on how you fill that basket.
[controversial]: https://www.investopedia.com/articles/07/consumerpriceindex....
And even if we go with CPI stuff, the agencies that do these things try to stay consistent. At least in western countries they don't just do whatever they want.
The idea that all departments of all western governments are secretly changing the data inputs to achieve some sort of grand conspiracy about inflation number is pretty much delusional thinking.
I don't think they have to do it secretly. They do it in the open, otherwise there wouldn't be an Investopedia article on CPI controversy that clearly indicates a few problems. There's no internal whistle blowing going on. It's in the open.
> And even if we go with CPI stuff, the agencies that do these things try to stay consistent.
Sure, perhaps they "try", but:
"Over the years, the methodology used to calculate the CPI has undergone numerous revisions".
"Some critics view the methodological changes and the switch from a cost of goods index (COGI) to a cost of living index (COLI) as a purposeful manipulation that allows the U.S. government to report a lower CPI."
My personal problem with CPI is that it doesn't include the cost of purchasing a home. I get it...it's not a "consumer good" or whatever. But if you're talking about inflation, and everyone jumps to CPI for that, then CPI should include it, or maybe the media should stop quoting it so much. It's not representative of what people want it to be. People want a way to quantify how much harder it is to establish a good life with their earnings. And I don't think the government is being honest about that. Maybe it's too much to ask.
Then please point me at the methodological changes done by these government in the last 1-2 years that were specifically designed to hide higher inflation.
> "Some critics view the methodological changes and the switch from a cost of goods index (COGI) to a cost of living index (COLI) as a purposeful manipulation that allows the U.S. government to report a lower CPI."
Can this pattern be shown to always lower CPI and can they show that all western governments have enacted the same changes?
And such a methodology would maybe work over a long time-span, it could not be used to hide 1 years high inflation.
CPI is just a dumb and useless measure all together. It really should have no relevance to economic discussion. For macro economic analysis of any kind, the GDP deflator is to be preferred.
> People want a way to quantify how much harder it is to establish a good life with their earnings.
That is a wrong way of thinking about any inflation measure.
> And I don't think the government is being honest about that. Maybe it's too much to ask.
Not sure what honest means here. I don't think the government states anywhere that CPI is some magical measure of 'how easy it is to establishing a good life'.
The real problem is this class of claim:
There are secret statistics that support my reaction, which would without those statistics be obviously irrational. I do not have access to these statistics, because their existence is being intentionally hidden from me, but from my trips to the grocery store and discussions in the breakroom, I know what they are intuitively, with a fairly high precision. I have been confirmed correct by some people I've met on the internet who are saying the same thing.
If you felt this way, and could find enough people who also think this is true, you should be able to do a survey on your own, more representative basket of goods, and come up with a number that you find more meaningful. If you couldn't, you could at least attack the current basket of goods and methodology with specific criticisms, rather than vaguely plausible FUD. Instead, vaguely plausible FUD rules, because statistics that are not being offered are unfalsifiable.
Lies, Damned Lies and Statistics
Choose carefully and cherry-pick how you source your input numbers, as garbage in means garbage out.
Then let friendly media spokepersons help your PR quest by stating the numbers as if handed down by God himself. Then let peons on the internet call you conspiratorial.
All in all, we shan't worry - these numbers are all simply transitory :)
How about you propose a different metric then, that surely will be infallible and completely fair to everyone.