Invictus here.

Either because it was mildly political in nature or because it referred to government data, my recent critique of Sarah Palin’s foray into economics — specifically grocery inflation — garnered a fair amount of commentary.  Putting the politics aside, I thought it might be instructive to take a closer look at how the BLS crunches the numbers that many claim are worthless.  So, herewith a look behind the curtain at how the 12-month gain in Food at Home settled out at +1.4 percent.  [NOTE:  This may make some readers drowsy.  Do not read on a handheld device while driving.]

First, though, a look at what Food at Home — or Food and beverages purchased for off-premises consumption — represents as a percent of Personal Consumption Expenditures (about 7.8%):

With that in mind, let’s look at the most recent report from BLS on CPI (Table 3, Page 10).  For all who have shared their personal anecdotal evidence, please keep in mind that in addition to providing “U.S. City Average” data (which is what’s below), BLS breaks down by region and also by Metropolitan Statistical Area (MSA).  So, while the numbers here may seem off to you, they might seem more on target if we were to filter down to your region, MSA, or city.  I would expect the numbers for my locale to deviate significantly from the U.S. City Average (actual prices are referenced a bit further down).

There are six super categories, which I’ve underlined.  In the interest of saving innocent pixels, I’ve cut many of the sub-categories.  I left “Other food at home” because I thought it was important to look in the catch-all bucket; it’s included in its entirety (as is the Cereals category).

The first column above shows us what percent of total PCE is represented by the line item, hence 7.801 for Food at Home.  Within Food at Home, below is a table that breaks down the six super categories within and details their influence in arriving at the overall 1.4% year-over-year gain (sorted by Relative Importance):

So, “Other Food at Home,” at 2.023, is 25.9% of 7.801, and at a +0.4% YoY change contributes +0.1% (0.4 * 0.259 = 0.1036).   Clearly Meats, Poultry, Fish & Eggs comprised almost the entire year-over-year gain (1.745/7.801 = 0.224; 0.224 * 0.047 = +1.1), with Dairy & Related coming in a distant second, adding 0.3.

For those who would like to see the actual prices used by BLS in their calculations, please look in this PDF at Table P4, Page 107.  It is in this table that BLS cites the prices it is using for the average U.S. city and for each of the country’s four regions.  It is from this table that we can really do — pun intended — an apples-to-apples (~$1.30/lb. for Red Delicious) comparison.  Sample below:


I’m sure everyone’s mileage varies here.  And I do appreciate the fact that there are many anecdotal stories out there that differ from these numbers.  But again, I would make two points:

  1. No data set is perfect
  2. You may find a better correlation to your personal “truth” if you drilled down to your region or MSA; the differences can be significant.

Now, if I had to guess, I’d speculate that with wheat having gone parabolic, we’ll soon see a visible spike in Cereals & Bakery Products.

CPI 101 is adjourned.  Hope this is somewhat informative.

ADDING: Many questions about methodology are answered here and here (pdf).  Of course, if your brain is broken you’re disinclined to believe the government’s answers, don’t bother clicking through.

Category: Consumer Spending, Data Analysis, Economy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

87 Responses to “A Closer Look at the Grocery Cart”

  1. Sechel says:

    The data is so at odds with m first hand personal experiences, I don’t know where to begin.
    In the past year I’ve seen the cost of
    * bagels rise by $0.10 at the supermarket, more at the bagel store
    *orange juice rise by roughly $0.30 for a half gallon
    *fish rising by several dollars a pound
    *olive oil rising by roughly $1 per liter

    In short my grocery list is fairly constant yet my outlay has increased. I suppose the BLS may have us switching from Sockeye to Tilapia and claim prices stayed flat, but that’s not how consumers feel about it.

  2. Buchlajoe says:

    Fantastic analysis …. I could pour through pages of it and it still wouldn’t change the fact that everything is getting more expensive. I would change your first point to “no data set is worthwhile”

  3. baychev says:

    cereals and bakery down 5%? seriously? what are the BLS’ substitutes to come up with those numbers?

  4. dead hobo says:

    I can’t relate to a lot of this. I know how to cook and how to shop for groceries and I buy in bulk or in quantity when a good sale is available. I’m probably the shopper that most stores hate. I know where to buy vegetables, grains, staples, meat, bulk, and the like and often these are from different stores. If you have a routine, it’s not difficult. Some may rationalize that they don’t have the time or are too important to make this effort. I laugh at them and their lazy extravagance. On the other hand, I could never figure out couponing or how master couponers manage to do it.

    Re wheat: I hear the qty per item is low relative to packaging, labor, and distribution thus the price of the end item should be fairly insensitive for a long time. Oil is the elephant in the room when you apply that type of cost analysis because oil is so pervasive and because the contract delivered price may be much higher than the current spot price if commodity inflation is allowed to develop for a few consecutive months.

  5. MayorQuimby says:

    No offense BR but ALL of these anti-inflation posts are negated by the following:

    http://www.mdmproofing.com/iym/weblog/graphics/survey-paycheck2.gif

    IOW – prices HAVE to be lower because affordability is shrinking.

    Why? Because wages have been flat to down into commodity spikes.

    Also – one must overlay prices of:

    Tuition, housing, rent, mortgage, credit card interest payments, gas, tolls, property taxes, sales taxes, phone taxes, TAXES etc.

  6. carleric says:

    My personal experiences suggest you can buy some articles at reduced prices sometimes but that seems a temporary phenomena for the most part. I do know crowds are bakery outlets are bigger, you can’t get near a Costco store without a struggle and so forth. But, when related to the CPI, substitution severely distorts the fcts. Does buying chicken instead of steak decrease your cost of living or just your standard of living? Does food quality really make things cheapeer? It seems apparent you have an agenda and you are certainly welcome to have one….just give up trying to impose it on the rest of us…..

  7. Funny thing about inflation — its was RAMPANT last decade, and mostly ignored. Housing, Education, Food, Energy, Health Care, pretty much everything outside of technology — just exploded from 2002-08.

    Then it collapsed.

    This decade, at least half of that list is in deflation. Add in wages into the mix. Then just for shits and giggles, look at asset prices like Homes and stocks — still off their peaks by 30-50%.

    Yet now — with food and energy way off their highs — seems that everyone is screaming inflation. Welcome to 2005, right on time (half a decade late).

    Just goes to show, humans are backwards looking creatures in terms of their personal experiences.

  8. Julia Chestnut says:

    I would say that there are a number of things going on that these numbers, while they may be completely accurate, do not reflect. The first is the relentless downsizing of packaging. Remember when a can of coffee was a pound? These days, most are 12 oz and some are 11 oz. A bag of chocolate chips used to be 16 ozs – now it is 12. What used to be a 5 lb. standard bag of sugar is now 4 lb. I could go on. Accordingly, at this juncture, comparing prices on finished products from several years ago and now is comparing apples to oranges.

    The other thing that is completely evident on the ground, and masked in these numbers, is supply and demand affecting prices (which they still do in some places, believe it or not). Beef has been kept insanely low by the destruction of dairy herds. Even so, most consumers have traded down aggressively. This keeps the prices for hamburger, compared to the prices for better cuts, off balance. Pork is up. Parts of chicken have gone up, others down, depending on their use. You can see the same types of changes brought on by austerity in individual homes going on in the figures above: things that are necessities saw a stable price, where things that people could cut back on saw price declines. When you have a line like “meat, poultry, fish and eggs,” that masks a lot of movement. But if you look at the ground beef you pulled out, the cheapest – ground chuck of the 70% to 80% fat variety is up. Lean ground beef is down or flat. Why? DEMAND. People choose the lower priced, cheaper quality meat because they don’t have the money. In short, what is in that basket purchased by the average shopper has shifted – perhaps permanently.

    I am one of those coupon shoppers, and while I don’t manage to get heaps of stuff for free like some of the gurus (everything is priced higher in my large, metropolitan area) I can routinely drop my grocery bill by 30% to 40% with coupons. I choose where to shop and what my menu for the week will be based on sales, and I stockpile items that we use frequently when I can get them at the lowest price. You can trust me when I say that I am acutely aware of the price of most anything I purchase, and I notice when the prices change or the volume of a package decreases.

    Absolutely: over the past 40 years, food prices have come down. However, “food as a percentage of expenditures” is really swamped by huge, massive, disproportionate increases in nonfood items rather than accurately demonstrating a drop in the price of food. The information you display above can be entirely accurate and still not entirely mean what you think that it does, which is why I think you are catching so much flack from those of us who stand around doing complex math in the grocery aisle with a coupon that will double, and a buy three get two free container of peanut butter.

    But MOST importantly, it seems to me that everything feels more dear when you don’t have money; by that measure, we’re all feeling the pinch and food has definitely “gone up.” In short, given how perceptions and animal spirits tend to overrule reason in most human endeavors, it might be instructive to consider how it is that a person like Sarah Palin operates and why it is so hard to prove her wrong.

  9. Jack Damn says:

    Just goes to show, humans are backwards looking creatures in terms of their personal experiences.

    Buy high, sell low. ;-)

    Great work, Invictus. Admittedly, your two recent posts have educated me in regards to food inflation, or, as it may be, non food inflation. Thanks for the facts.

    Now, if I had to guess, I’d speculate that with wheat having gone parabolic, we’ll soon see a visible spike in Cereals & Bakery Products.

    Yeah, I think it’s that delay in price spike that has some people spooked. For example, arabolic cotton (see chart: http://chart.ly/p8rlhe9) show hit the wallet soon.

  10. Jack Damn says:

    Sorry…here is the parabolic cotton chart: http://chart.ly/p8rlhe9

  11. b_thunder says:

    Invictus,

    Let’s agree on a few ground rules: by doing QE2 (aka creating at least $600B dollars) The Fed DOES NOT create any new wealth. Paving road, or making a shirt, or growing apples creates wealth, not printing money. The Fed’s stated goal is WEALTH EFFECT. Wealth effect is different from creating actual wealth, the “effect” in this sense is an “feeling”, an “illusion” of wealth that they want the folks to have.

    So, here’s why Ben Bernanke will likely end up as the most hated person in America: because he relies on his math formulas, economic models, and the same charts and tables that you, Invictus, present here. The problem is that the people do not use this chart to feel wealthier. The government statistics doesn’t matter to them. People see retail prices, and, as the 1st poster in the thread @Sechel gave a few examples, this makes them feel less wealthy.

    This is why Central Planning has always failed and the Fed will get the effect which is opposite to what it desired. Instead of the “:wealth effect,” it will get consumer apathy. And, since usually the Central Planners don’t admit that they’re wrong, the Fed will use the new batch of tables and again use “tame” inflation, and utilization “slack” to justify QE3, maybe 4 and 5. And again it will produce exactly the opposite effect, because the charts do not jive with peoples’ perceptions, i.e. the “effect.”

    So, how about a little less of “Ph.D.” and a little more of the common sense? Would someone tell Ben. B. that for most people, the increase of the weekly expenses on food grow from $100, to $120 (which they can easily afford to pay as long as they’re employed), that little $80/month expense will outweigh $800 gain in their 401K portfolio? That is, until QE3, 4 and 5 have the “desired effect”, when inflation really takes off, and stocks really collapse (if valued in constant dollars.) And until then – congratulations to all the many Primary Dealer bank employees and the PD bank clients who are front-running The Fed, i.e. front-running Us, The People. Enjoy your free cash. Make sure to pre-order that new Porsche/Ferrari/Lambo, and please give a nice Christmas gift to your nanny, personal shopper/housekeeper, your favorite stripper(s) and escort(s.) Don’t be greedy, share the People’s wealth during this holiday season. After all, you’ll be participating in the creating of the virtuous circle of “wealth effect,” a very good thing if you ask Ben Bernanke.

  12. Ilya says:

    I love the chart -’food at home as a % of PCE.’ Thanks to Norman Borlaug, John Deere, Monsanto, refrigeration and the American farmer, the average bloke eats reasonably well for a mere 7.5% of income. My worry is that we may be headed to 10 or 15% of income over the next decade.

    If inflation was RAMPANT last decade, it sure wasn’t reflected in the COLA of my Pop’s social security check. His food at home as a percent of PCE has gone from 10% to 25% over the last 15 years.

    “Stuff” doesn’t cost more. Your coloured chits just buy less.

    ~~~

    BR: Some of that you can thank the Boskin commission for — they purposefully rejiggered CPI to understate inflation by 1% or so — it was a cowardly way to backdoor COLA adjustments

  13. CardinalRam says:

    I would like to see the first chart broken out by income group. If your wages have been stagnate for the last 10 years, then the cumulative rise of 1% or so a year for ten years becomes HUGE!

    Also, with the economy recovering only for those on Wall Street (sure haven’t seen any recovery in my region), and the housing market still depressed, no one feels flush with money. So they are watching every penny more than they did in the past. Hence, “small” rises are seen more, and felt more than in the past.

    ~~~

    BR: In the US, Equity disparity has become enormous over the past 30 years. But that is a different discussion. But your point as to how even modest inflation feels to the mdidle class is well taken.

  14. Sechel says:

    B.R. Has anyone attempted to reconstruct the food component of the CPI using commodity/whole sale prices? It would be nice seeing it done with a constant basket of goods

  15. Invictus says:

    @b_thunder

    It was not my intent to dispute what TBP readers are seeing in their daily lives. Nor was it my intent to debate the merits of QE2. It was my intent to simply produce an informative, instructive, explanatory, educational post that would allow those who are interested to learn what is going on behind the curtain at BLS when it produces its numbers. Full stop.

    I would prefer to discuss/debate issues once all interested parties are up to speed on process, methodology and facts instead of just being dismissive of anything and everything.

  16. Jackson says:

    No methodology and facts? Dismissive of anything and everything?

    That’s what Zero Hedge is for!

  17. torrie-amos says:

    i’ll say it again, SPREAD SHEET BLINDNESS, i can’t count the number of meetings managers had spread sheets and computers and all the numbers were BEAUTIFUL, while on the ground the numbers are blantant lies

    yes, the job is very profitable if we don’t

    a. count overtime, and not pay it
    b. shift material costs from one job too another
    c. make warranty costs go down from 4% too 2%, when the project is overbudget, and u know the work is shoddy
    d. do not supply things we were contracted too because no one asked or checked up on it……mmmm, sounds like fraudclosure

    once again it is obvious to me, i live in a different world, my bread up 75%, fruit up 30-50%, etc.

    really i could give two shytes about someone elses statistics, these are my FACTS, real right in front of me two days a week

  18. call me ahab says:

    nothing like looking in the rear view mirror BR (or do you have another agenda- such as defending Ben “there is no housing bubble” Bernanke’s clueless initiatives [why pray tell?]) – from CNBC-

    “So even if measures like the Consumer Price Index and the tally of food prices from the Bureau of Labor Statistics don’t outwardly show inflation yet, it won’t be long.

    General Mills (NYSE:GIS – News) recently said a quarter of its cereal brands will see single-digit price increases soon, and Kraft Foods (NYSE:KFT – News) plans to hike prices on about half of its products. McDonald’s (NYSE:MCD – News), Nestle and Unilever (NYSE:UN – News) are among those expected to follow suit.

    And a new survey from MKM Partners shows prices at Wal-Mart (NYSE:WMT – News), the world’s largest retailer, have risen 0.6 percent in just the last two months.

    In the meantime, regular unleaded gasoline is now $2.88 a gallon nationwide”

    let’s see .6% over 2 months- annualized = 3.6% (not the end of the world- but not negligible either)

    oh yeah- one final thought- Invictus is a clown

  19. I have to tell you Ahab, your continual misstatements of my positions are tiresome.

    1) I don’t defend BB — that’s not my job. Figuring out the impact of what he does in the market is.

    2) Why would we annualize any single month’s data? That extrapolation exaggerates any single month’s excess or shortfall.

    3) Backwards looking? I use history to discern what has come before, than apply prior cycles to current situations.

    4) There is a group of permas who in 2009-10 have been forecasting the collapse of 2008 — two years after it happened. And now you repeat that error with inflation.

  20. wunsacon says:

    I dislike QE not because it isn’t stimulative but because it gives money most directly to the people who create/perpetuate our problems. I oppose QE on those grounds. But, QE *is* stimulative, in that it lowers the burden of paying back existing *fixed-interest* debts. If the QE would go to the poor, I’d be in favor of it.

    Unfortunately, the only way that QE will go “to the poor” is after — channeling Churchill here — Americans (controlled by Wall Street) try everything else.

  21. Robespierre says:

    @Barry Ritholtz Says:

    “Funny thing about inflation — its was RAMPANT last decade, and mostly ignored. Housing, Education, Food, Energy, Health Care, pretty much everything outside of technology — just exploded from 2002-08.

    Then just for shits and giggles, look at asset prices like Homes and stocks — still off their peaks by 30-50%. “

    No actually the funny thing is that you make such a silly comment. Yes home prices have collapsed, however, homeowners payments have not. So they are still paying the inflated prices of the past. Now add the current inflation on the little items you know just for giggles and you will get a true picture of real people cost of living.

    ~~~

    BR: For 5 million foreclosures, those payments have collapsed to zero. There are likely another 3-5m behind them.

    For another 10 million people who are underwater, they have to decide if its worth keeping the house or moving on. But in terms of energy, food, and other metrics, its way way off from prior levels.

  22. sgornick says:

    Because they cannot create a CPI for each individual, inflation from each person’s perspective will vary.

    But five minutes with the data, here are some thoughts.

    If I don’t own a car and instead rely on public transit, fares in almost every metro area have gone up 15% or more since 2008.
    Here are some increases from a 2009 survey: http://t4america.org/wp-content/uploads/2009/08/stranded_figure4.jpg

    Yet the CPI detail, Table 26 shows Intracity Mass Transit up just 4.1% for 2010 through September, and from Table 25 I see the total increase since 2008 as 7.9%.

    Now on the other end, under:
    Recreation service:
    Club dues and fees for participant sports and group exercises,
    Table 26 shows a -0.7 (a decrease), for 2010 through September, and Table 25 shows, since 2008, a 2.4% decrease.

    Your transit rider is likely not paying any club dues for participant sports and group exercices so is seeing no price deflation there, but has no alternative than to pay the 15%+ increase he’s experiencing to get to work each day.

    So my conculsions: I’ve no idea where they got their data for public transit but I’m pretty sure its wrong. Additionally, even if they had an accurate picture, the CPI number would still be irrelevant to me as my personal profile is so very much different from the weightings used in coming up with the CPI.

    So, who are you going to trust, the CPI or your lying first-hand consumer eyes?

  23. ItalicBold says:

    @Barry, your completely right in pointing out that what inflation we do have now is no where near what we have had over the past decade. However the context for the average individual is completely different now.

    Before we had CPI inflation with asset inflation and wage inflation.

    While you may have marginal CPI inflation now it is off the high base that has been established over the past decade.

    The average individual has experienced a nasty bout of asset deflation, in particular housing, equities and commodities, wherein they where heavily overweight these components. Many missed out in the rebound furthering a negative view towards any inflation in these assets, apart from housing.

    Wages are stagnant, deflating or non existent for many.

    The cost of servicing debt is really the real elephant in the room and is probably also causing the average individual to be sensitive to the pricing of consumables and services

  24. Invictus says:

    @call me ahab

    oh yeah- one final thought- Invictus is a clown

    About whom do you think the ad hominem speaks more — its writer or its subject?

  25. daf48 says:

    You don’t need a weatherman to know which way the wind blows. Doesn’t everybody in this corrupt society cook the books?

  26. First, this argument is not over whether there is inflation. It is over whether prices have increased. They are two different things. There can be inflation in an era of declining prices, if the price declines are moderated by monetary shenanigans. Inflation is all about the money.

    That said, we are in an era of contracting or sluggishly-growing demand, which means prices should be falling, which the fed calls deflation but isn’t–it is, or would be, regular price declines due to declining demand, which, incidentally, would solve the problem of declining demand if they were allowed to proceed. That prices have fallen very little, or have even increased, tells me the Fed has successfully engineered some inflation.

    What’s really happening though is the Fed is inflating consumer goods while wages languish, trying to solve the unemployment problem by effectively decreasing the real wage rate. Wages are languishing because the supply and demand effect of so much slack in the labor market is overwhelming the Fed’s inflationary policies.

    Incidentally, the decline in percentage of income going to food is nothing less than remarkable, but it probably explains a goodly portion of the problem with obesity. Food is the cheapest drug on the market these days.

  27. Fred C Dobbs says:

    The fact that the statistics are about averages, proves nothing. If the average gallon of gas costs $1, it doesn’t mean when I go to the gas station to get gas I am going to pay $1 per gallon. I might pay $9 per gallon in Alaska, and $1 per gallon in NYC, and the average would be $5, when no one in Alaska or NYC pays either price. In Nevada one might pay $8 for a pound loaf of bread, and in Utah the cost might be $12, and the average is $10. In all cases, those paying more in Alaska and Utah pissed they are not paying the lower price in NYC and Nevada. So far, this comment has been directed at static prices, and not prices moving over periods of time and amounting to inflation if prices go up, but the analysis remains the same. Averages prove nothing by themselves. Assume too, for example, that Alaska had 10 times the population of NYC, 10 times as many people would pay $9 per gallon for gas, as pay $1 per gallon in NYC. So the statisticians would be doing themselves a favor if they adjusted their numbers to take quantity rather than geographic into account. Regardless, anyone visiting DC where the numbers are crunched would see for themselves they are not to be trusted. All of the tax payer money spent on statistics is spent on supporting the governing class, irrespective of the party in power.

  28. Invictus says:

    @baychev

    BLS has the overall cereal category down 0.5% YoY, not 5.0%, through Sept. 2010.

  29. Greg0658 says:

    first – this is turning into a fun Saturday LOL thread ..
    2nd “Fed is inflating consumer goods while wages languish, trying to solve the ___” .. labor redistribution all over the world so the world can have the American Dream and the world can have stuff they will relish and not go to war for (or allow destruction of) …. thing is thats bunk too … try create demand all over the world for diminishing raw materials is closer to the truth .. ie raw capitalism

  30. obsvr-1 says:

    you know we are screwed when this much time is spent arguing over the price of sustenance … the elitist/plutocracy continues to win by keeping everyone from focusing on their criminal acts in stealing the country blind (in this case hungry).

  31. Good post. Some very thought provoking comments.

    Several regulars have emailed suggestions as to ways to make the comments more useful. These include scoring/ranking comments, “super commentors” with moderation rights, and other group moderation of comments.

    Ahab, your name seeems to come up a lot (lol)

  32. oldtimer says:

    I am reading this post from Britain. It interests me to make comparisons.
    As some commentators have noted there is a percieved disparity between statistical inflation and personal inflation. You are not alone, we have the same problem with our stats too.
    Having lived through the entire period under discussion, I would agree in principle that the cost of food at home is much lower now, (as a % of income) than it was in 1947. However I think that selecting this particular time frame produces a disproportionate skew in relation to recent events. For my own analysis I compare prices over a five year period.
    I am retired, my pensions are adjusted for inflation annually, so in theory I should be able to buy the same quantities and qualities as I did five years ago. However that is no longer possible. Govt. stats. say that food inflation is running at between 3% and 5% . When I come to find the greenbacks at the checkout my wallet is telling me that food is increasing in cost at a rate of 10%
    I have been making economies to take account of this e.g. buying larger quantities of non-perishables, buying less brand names, and cutting down on little luxuries and treats. But there is only so much you can do with this idea.

  33. Tulm says:

    Since some put great confidence in these stats, why not an analysis of the BLS unemployment stats? Specifically the U3? Is the same level of confidence placed on the U 3? Or are those numbers being doctored to keep the level at a more politically <10% level.

    Invectus? I'd be interested to hear your analysis on that one. I'd be interested to see if you arrive at a similar level of confidence.

  34. Fred C Dobbs says:

    Thanks baychev for reference. I watched it, and says what I believe to be true. Thanks.

  35. patfla says:

    Having lived several years each in Europe and E Asia, my impression (backed up by all the stats I’ve ever read on the matter) is that Americans pay less for food as a % of income than almost any other nation.

    http://www.nationmaster.com is a good site for international comparison of various stats including economic measures but I didn’t find food as a % of income there. Did find this:

    http://www.foodreference.com/html/ffoodcost.html

    9% – or even less according to what I read upthread?

    I know that international comparisons (esp where we Americans lose) are anathema to our exceptionalism but you can also try eating less. Japanese portions are smaller to begin with but then you have an expression “hara hachi-bun” which means, literally, -“stomach 80%”. That means eat until you’re 80% full – not 160% as we do on Thanksgiving or our more normal 120% full.

    Recent scientific evidence tells us (totally aside from obesity, heart disease, etc) that you live longer if you eat somewhere less rather than to excess. I think it may have something to do with not wearing out your metabolism which one can think of as overstressing and wearing out parts in your car.

    So what does that mean in practice? Look at your grocery cart – if you’ve packed it so high that you’re having to carefully balance things so they don’t fall off the top, maybe you’re indulging in excess. Except of course (need to genuflect in the direction of these kinds of American “objections”). “I live in Alaska, many miles from civilization and only shop once every two months”. Yeah, right. The truth is that the vast majority of us are now fully urbanized.

  36. iratherbe says:

    We’ve track our general expenses for going on 6 years now. From Jersey, born & raised in NYC metro, now live in Philly metro. Yesterday we literally paid the most ever for about 1 week’s worth of groceries. Give or take a few items we have a routine selection shop at the same store & always look for sales on those things. Just a few examples … premium breads that were 2 for $5 on super sale are now 2 for $6, prices for good coffees have steadily risen, certain cheeses that had been priced specially at 2 for $4 are now $5 & $6, cereals might be the same price on sale , but as many food stuffs have, are sneakily 2, 3 or 4 ounces less in quantity … we could go on & on.

    Doesn’t really matter what Palin, Invictus, BR or the stats tell ya. There are 2 kinds of lies; dirty lies & statistics. Very simple: when you put less in the cart & pay more at the register, it is what it is. Or rather the proof is in – albeit less of of it – the pudding.

  37. Invictus says:

    @Tulm

    All I’m doing is working with what I believe are the most reliable data sets extant. If there are data out there more reliable, I’d be interested in knowing what they are and, more importantly, why they’re more accurate and/or reliable. Can anyone who dismisses government stats tell me when, exactly, they went in the tank? Nixon? Carter? Reagan? Clinton? Have they always been doctored — by every administration since the recordkeeping began? Which series are doctored? GDP? Unemployment? PPI? CPI? All of them? Would a whistleblower not have come out of the woodwork by now to announce that s/he was part of an ongoing fraud? Is there no one within BLS, BEA, DOL, or any other agency with the cojones to come forward? Does the correlation between the ADP number and the government’s nonfarm number mean that ADP is in the tank, too? What about the Ceridian-UCLA Pulse of Commerce Index? What about the National Association of Realtors? What about the University of Michigan and its Sentiment Index? The NFIB? Where does it end?

  38. patfla says:

    I was lazy.

    http://www.ers.usda.gov/Data/InternationalFoodDemand/

    Download the excel file “Food Budge Shares for 114 countries”; sort on column J; and the US pays less for food as % of income than any other country. For that matter, it’s the only country under 10%.

  39. Tulm says:

    Invictus – wasn’t attacking. Just asking and am curious to your thoughts on that one. I think it would be a thought provoking article.

  40. Invictus says:

    @patfla

    Nice link. Interesting. Thank you.

    @Tulm

    My bad, and apologies. Pardon the momentary frustration.

  41. Tulm says:

    No worries. I think this topic has been very interesting with respect to macro and micro observations. Good big picture and street level data from all.

  42. DeDude says:

    I remember when a 6 pack of my favorite chocolate bars were $ 1.99 and now they are almost twice of that. Problem is that my memory is perhaps somewhat selective and would naturally pick out the exceptionally low price and forget that it was $3 six month before that $2 price occurred. One of the reasons that everybody always complains about high prices is that their reference for each item is always to a previous time of unusual and unrealistic low prices. That is why actual collected prices beat anecdotal “gut feeling” type of information. As bad as some data collection and calculation methods can be, the human selective memory gut-feeling method of getting to the facts is a lot worse.

    The right wing and Fox has for a long time been attacking facts and “PhD” “ivory tower” etc. ways of getting to decisions and policy. It is a lot easier for them to get through with their agenda if reality can be created by gut-feelings rather than be anchored in facts. As a result, a lot of people have given up on using data and facts to create their opinions and grasp of reality. Rather than trying to understand the data and weaknesses in how it is collected and analyzed, they simply dismiss it and use their gut-feelings. The thing that makes Sara Palin so effective a populist (and so despised in the data-based community) is that she knows exactly how to connect to and manipulate these people. To great applause she dismisses facts and data because she “knows better” and she goes straight for manipulating people based on their gut-feelings.

    Eventually we will see serious increase in food prices and the idiots that listen to Sara Palin will believe that it was because of 600 billion in QE. The people (and failed policies) that are behind commodity speculations will harvest huge benefits from it and will not be held responsible. Sort of like the housing bubble where the right wing also managed to hide those responsible and benefitting behind a smoke screen of gut-feeling misinformation.

  43. hughakston says:

    I believe the 7.8% weighting is at the heart of why the numbers don’t seem to reflect reality for many people. If discretionary purchases have dropped from the levels of the past decade, then the weightings in the model could be understating the portion of personal expenditures going to things that you need, and overstating spending on things that you don’t – which happen to be “disinflating”. Inflation of what you must have, deflation where de-leveraging is occuring. Personally speaking, 7.8% appears low based on my consumption and that of my peers.

  44. dogboy says:

    first post

    America is fat AND stupid.

    Fat because the stats show it. Stupid because, if we knew how to spend money on food. we wouldn’t be fat. With fatter comes sicker. Perhaps, with rising prices, America will learn how to better allocate food dollars. Probably not though. Too bad, because if we did, there would be NO “health” care crisis. Since we probably won’t, we’ll just get fatter, sicker, and then dumber. Disaster in the works. Note the peril the dairy industry, for example, is in. Why? Because the consumer is squeezed and not enough money is getting back to the production side. F the educated idiots that put together inflation stats, look what’s going on all around you.

  45. Bill in SF says:

    My frustration with grocery shopping lately has to do with the pricing games most stores are starting to play. It appears to me that many stores have inflated there “regular everyday shelf prices” but offer discounts on select products on a rotating basis if you sign up for their club card or use their online coupons. For example, I can often buy a loaf of good whole wheat bread for $1.99 with the store card while the regular price is listed at $3.49. The savings may look substantial if you participate; but in fact this is just distorted by the bogus shelf pricing.

    The end result is I’m left confused at what the true cost of a loaf of bread or a gallon of milk should be… the shelf price or what I’m willing to actually pay.

    Since many stores are playing these pricing games, what price does the BLS use in calculating these averages?

  46. Julia Chestnut says:

    @Bill in SF, you know – you are right. They have managed to pull off something in groceries that is truly amazing – something akin to perfectly flexible pricing. They have the extremely high shelf price that some people will pay, they have a club card price that some who are more price sensitive will pay (in return for handing over their data – nice trade, but it’s darn hard to not take the deal), and then there is the amount that the coupon people pay. Perfect pricing would sell the product on a sliding scale at the highest price that any given person is willing to pay. Already, the brand names and the store brand were capturing the consumers who valued name on the one hand, and price on the other — which was a start in that direction, because the products were made by the same company with different margins, or with profit coming from different areas. But now, they have truly perfected the game.

    I absolutely agree with you that this masks what the true price of the good is, because it is very different for each person – in the same store, on the same product.

    I wonder what on earth price they are using — did I miss that, Invictus? Do they use the asking price, or the one on the receipt?

  47. madcow6993 says:

    I assume that “club cards” track all purchases and pricing so that grocers can use the information to influence shopping behavior? If so that data would be an excellent way of tracking perceived personal inflation. Even if a grocer didn’t use a club card they could use credit/debit card numbers to get some of this information.

    One other side note I’ve always thought some consideration should be given to price/calorie. Our industrial food system and its use of cheap corn syrup in everything has probably brought us below the 10% of income threshold.

  48. Invictus says:

    @Julia Chestnut

    Do they use the asking price, or the one on the receipt?

    I do not know, but will try to find out and report back. I’m going to guess they use the ask.

  49. Transor Z says:

    First, kudos to Invictus for tackling a macro micro subject. I’ll add that even coupons ain’t what they used to be. Most grocery coupons I see nowadays are $2 off ANY TWO of product X rather than $1 off ONE.

    Grocery purchases are difficult to analyze at the micro level.

    [cue "100 Years" by Five for Fighting] http://www.youtube.com/watch?v=tR-qQcNT_fY

    steaks, wine, lobster… Diapers, formula, instant dinners… jarred baby, powdered oatmeal/rice cereal, diapers, instant dinners… phase out pull-ups, chicken fingers, PEANUT BUTTER, bread, pasta, ground beef, fresh produce, meat on sale [x 10 years]… phase out chicken fingers, increase volume of remainder… [x ~7 years]… steaks, wine, lobster… low-sodium diet, fiber, wine… death

  50. dss says:

    @Barry,

    Assclowns are everywhere these days; your suggestion of 1:05.

    Other successful sites have had this sort of thing for years, and it works very well. The community’s most trusted users earn the ability to “hide” rate comments, and pretty soon the site is self policed. The worst of the trolls are hide rated into oblivion and silence and the most respected commentators are rewarded, without regard to their political and/or economic agendas.

  51. dss says:

    Could it be that some of the comments here are perfect examples of “Your brain is broken”?

    “New research suggests that misinformed people rarely change their minds when presented with the facts — and often become even more attached to their beliefs. The finding raises questions about a key principle of a strong democracy: that a well-informed electorate is best.”

  52. Lyle says:

    The second chart in the post does show year over year rates in these areas. Meat is up the most, followed by dairy.
    Other post have shown commodity prices over the last 3 years and its clear we have not yet hit the peak even in nominal terms of 2008 . If you want to take Nov 2008 as a baseline, gas then was $1.45 (at its cheapest) its now 2.75 here but did hit 3.99 in July 2008. Other charts show similar behavior, recall the rice crisis of 2008.
    Yes the percentages spent on food vary by individual and size of family, once the kids leave the percentage spent on food decreases. (it would be interesting to adjust the percent on food by family size) I suspect todays smaller families would lead to some decrease over the last 50 years just by itself. I suspect that if one knew where to go on the BLS site this data is available, but …

  53. wally says:

    There is no doubt that food is getting cheaper and cheaper. There is ‘noise’ from season to season and item to item, but food costs are just not an issue for most families.
    Of course, some people can screw up anything: you can always by more and more expensive items and all kinds of non-food items and them think your bill are going up.

  54. Molesworth says:

    This is a good post.
    I listened to interview on PBS with BLS Econ Asst and they appear to conduct very detailed apples to apples data points to compile their statistics.
    But I can’t quite square this post or reconcile the PBS interview with my one data point experience. I like goldfish crackers. I buy big boxes of goldfish. I used to be able to score them on sale for $4.99 two years ago. Now I’m excited to find them for on sale for $6.59. Over 30% increase.

    And btw, Call me Ahab, shouldn’t bother to read Invictus if he doesn’t like Invictus. Posting nasty barbs is impolite; not the nature of this blog.

    I like that Mr Ritholtz keeps it clean and tidy.

  55. Estragon says:

    Interesting thread. Although food price inflation obviously affects us all, it seems to me that it might be time to have a detailed look (again) at the housing and shelter CPI calculations. After all, shelter is the single largest component of CPI (esp. the “core” rate), and we all know that there are lots of unprecedented things going on in that particular cabbage patch.

    IMHO, there is no question that QE will “work”. It’s clear the fed wants to reflate, and it’s also clear that they have the means to do so. What’s far less clear is whether the fed can fine tune those means so as to control both the degree to which prices are inflated, the incidence of the inflation, and the timing of the inflation. If inflation happens to far, or too fast, the fed may be forced into an exit plan prematurely (i.e. with unemployment high, etc). That obviously has big implications for investment, which is BR’s stated reason for digging around in these numbers in the first place.

    Eyeballing housing vs core cpi (chart link), it looks to me as if (post 1983) housing often leads core by a year or so. The wonkish among us might recall that OER is the largest component of housing CPI, and the OER method of calculation was introduced c.1983.

    So some of the questions in my mind include:
    - I’d guess rents change relatively slowly, so why is there apparently a leading relationship between housing and core CPI?
    - Assuming there is a leading relationship, is the recent big drop in housing inflation fully reflected in core CPI yet?
    - Recent data suggest vacancies may be peaking, and rents may be bottoming. Is this reflected in housing inflation yet?
    - How does the foreclosure mess figure into rents and housing CPI?
    - OER is an abstraction, unlikely to be experienced by most of us in the same way as, say, tomato price inflation, so while OER deflation might anchor the CPI arithmetically (for now), does the abstraction change how inflation expectations are influenced? In other words, are TIPS priced off CPI, or what we understand viscerally?

  56. Transor Z says:

    @Bill in SF & Julia:

    Enter behavioral economics. We all “know” that sale prices are an inducement to get us into the store where we will buy the sale items and then give it right back plus some by purchasing higher priced items for the convenience factor.

    At the individual consumer level, you need personal tech along the lines of the iCache to track and analyze product prices over time — and maybe highlight the results of grocery-shopping while hungry. Someone was telling me just yesterday about a new handheld product with a bar code scanner that allegedly comparison-shops in real time. Anyone familiar with that?

  57. Julia Chestnut says:

    Thanks, Invictus. The grocery store tracks everything by the person and by the product, of course. My favorite grocery store sends offers directed at ME based on my past habits and strike prices. It’s creepy. Unless there’s a good deal on chicken nuggets, then it is handy, LOL.

    Considering that the store probably creates a weighted average price at which each item sold by bar code, but that information is probably insanely proprietary, I’m just curious to know how they build up the price at the government.

  58. Estragon says:

    Transor Z

    I think the new handheld item with a scanner is your cellphone. Maybe using something like QR code

  59. JimRino says:

    It was the “Wealth Effect” during Bush’s INFLATED Economic Policy.
    That’s why “Republicans” love to inflate the money supply. Bush did. Remember he even didn’t want you to see the rocket growth of M3, so he just stopped publishing!

    Anyway, with the Wealth effect during the bubble, these people weren’t looking at prices.
    When oil went to $120 and pushed the Economy into a Recession, THEN people started to see Inflation.

    I for one will Never Vote Republican Again.
    I know who destroyed the economy.

  60. gd says:

    So a massive dose of unacknowledged inflation has pushed the cost of life-critical resources from 8% to maybe 9%– oh, what the hell, 10%– of one’s personal expenditures. And within the lives of many of the people complaining about it, that percentage used to be 25%.

    You want something to be outraged about? If the USA pegged its military budget to be twice the next largest in the world (not an unreasonable idea, since it’s supposed to be for defense, not offense), it’d save 500B per year.

  61. Tulm says:

    JimRino – so it was oil that pushed the economy into recession? Here I thought it was a credit bubble that had been building for decades with the help of fractional lending and poorly planned and overseen deregulation enacted by both parties.

  62. Transor Z says:

    @estragon:

    It may very well have been a phone app, but I don’t think my BB has it. Unfortunately, I was only half-listening to the person speaking.

  63. Lyle says:

    Went mining the BLS site at the location http://www.bls.gov/cex/#tables for 2009
    you can find tables of consumer expenditures by family size
    Food at home 1 pers 1.9k, 2 3.6k, 3 4.4k, 4 5.1k, 5 or more 6.3k
    Food away from home 1 1.5k,2 2.6k,3 3.0k,4 3.5k,5 3.7k
    total food 1 3.6 k,2 6.3k,3 7.5k,4 8.7k,5 or more 10k
    Pre Tax Income
    1 32k, 2 65k 3 74k, 4 85k 5 or more 80k.
    So now taking the total food divided by the total pre-tax income
    1 10.2%,2 9.2%,3 9.8%,4 10.2% 5 12.5%
    The numbers do show that single folks and folks with 2 or more kids pay more for food than a empty nest couple. further clearly once you go to a couple, then the increment per child is about 1/2 % per child
    Note that on average we spend 10k for shelter (rent mortgage etc) and about 6k to operate the place utilities with supplies and services about 20k on average for shelter.
    Taxes are 2.1k (average of the sample) (Not clear if FICA is included in the taxes)

    There are a lot of facts on this page which can also be downloaded in excel form to play with.

    Note that the food away from home

  64. Lyle says:

    Missed last line, food away from home decreases as a percentage as family size increases which is not a suprise.

  65. Robespierre says:

    @Invictus

    From the BLS:
    “Shelter, the service the housing units
    provide, is the relevant consumption item for the CPI. The cost of shelter for renteroccupied
    housing is rent. For an owner-occupied unit, the cost of shelter is the
    implicit rent that owner occupants would have to pay if they were renting their
    homes.”

    “The OER and Rent indexes have the largest weights of the 211 item categories (item strata) that comprise the CPI market basket. As of
    December 2008 their shares of the total weight (their relative importances) in the CPI
    for All Urban Consumers (CPI-U), were 24.433 percent and 5.957 percent,
    respectively.”

    As you can see from above, OER is the largest component of the CPI. This particular item has dropped the most since the implosion of RE. HOWEVER, the owner of the OER is STILL paying the old OER (unless they have moved to cheaper housing). So here we have the BLS calculating the CPI with a new (much lower OER) while the consumer is still paying the old (inflated) OER. An honest CPI would use a moving average of the OER with a 7 to 10 year “roll” to be more accurate. AS it is today, the CPI published by the BLS is TOTAL pile of BS and the FED knows it.

  66. Jim67545 says:

    This started with Palin’s (incorrect?) remark. Like her predecessor W she might have misspoken as relates to food but, as often happens when she “connects” with the ordinary folks, she may be putting her finger on a valid issue as perceived by her audience.

    Should she gripe about runaway inflation in a discretionary item like cable TV or cellphone? That would not resonate. Should she gripe about the rise in health care draining Americans’ pocketbooks? And open herself up to questions about what she would propose? So she would gripe about food, or the price of kid’s clothing = perceived as necessities and emotional moma-bear items.

    What we have is diminishing income for a majority of families, coupled with stretched housing costs (with increasing real estate taxes, utilities and insurance), coupled with drains from new “necessities” like cell phones, coupled with unemployment and higher health costs and, presto, you have people concerned about being able to afford true necessities like food or kid’s clothing. Should they throw away the cellphone or cut the cable (as apparently many are doing?) Maybe so.

    The food thing is a symptom of the decline in living standards in this country as we fall back into the rest of the pack of nations and the premium we earned over what residents of other countries earn disappears.

    So, criticizing Palin on food prices is too literal an exercise. I doubt she was actually focusing on food although that is the item she chose to signify the larger problem.

  67. Phil says:

    I took a look at the data in the given Table P4, Page 107. The prices are all higher than what I see locally. Looking at the data for my region at BLS I find the same. My conclusion is that if you are a conscientious shopper the current BLS numbers are of limited value since your are not the buyer they try to model. My own initial reaction is that stores are cutting discounts on lower priced and sales items. Looking at the BLS methodology for collecting data t seems likely that discounts would be culled from their samples by their pricing analysts so any loss of discounts would be invisible.

    Looking for something more then anecdotal evidence to show to myself that I wasn’t wrong I visited the financial page at Kroger’s website (http://www.thekrogerco.com/finance/financialinfo_investorconferencecalls.htm). The latest investor conference is available by webcast but at three and a half hours it seemed to much time just to scratch an itch. I satisfied myself with viewing the PowerPoint presentation.

    From page 8 of the presentation:

    Cost volatility in food

    – Inflation in perishables

    – Deflation in grocery tied to promotions to drive volumes

    While not a full validation for what I’ve seen it is some backup. From my experience the discounts mentioned are on overpriced P&G type items. Again if your are a conscientious shopper you’re already not buying overpriced items so the discounts are irrelevant.

  68. Bill in SF says:

    This topic sure has captured a lot of attention…

    Now, even Krugman is Talking Turkey!

    http://krugman.blogs.nytimes.com/2010/11/13/the-turkey-standard/

  69. DeDude says:

    Jim67545;

    The impetus for the first posting on this topic was that Sara Palin had stated something that was without any support from available data – and that pissed off a data-driven guy like Barry. The reason it got so much milage was that she actually resonated with an emotional cord in a lot of people, even regular posters on this strongly data-driven site.

  70. oldhillbilly says:

    obsvr-1 Says:
    you know we are screwed when this much time is spent arguing over the price of sustenance … the elitist/plutocracy continues to win by keeping everyone from focusing on their criminal acts in stealing the country blind (in this case hungry).

    Amen!!

  71. Jim67545 says:

    My point is that food is not the real topic. It is just a convenient whipping boy. By our actually literally focusing on the invalid topic of food we are missing a valid broader point she probably feels she is making.

  72. Transor Z says:

    Okay, now my broken brain appears to be rebooted. What’s up with butter?

    The .pdf Invictus links to has some very cool tables. Check out Table 8. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): U.S. city average, detailed expenditure categories

    Invictus, Food at home looks like 8.9% for urbanites, no? (Table 8, p. 30) Note also that overall food is 16.9% for avg urbanite.

    I think somebody said it earlier: a lot of us seem to be processing the dramatic YoY jumps in 2007 and 2008 as ongoing increasing inflation. Interesting. Another interesting thing is that I remember produce, bread, and pasta seeming to jump overnight during the crisis but a statistical trend line smooths that turbulence out.

  73. dmlopr says:

    I think I have it solved.
    Everyone likes their breakfast of OJ, eggs and sausage! All three are up 10% from last September..

    On another note, my dad got his heating oil this week for $2.90 a gallon. I got mine only two weeks ago for $2.73. And people wonder why I burn 8 cord of wood each year.

  74. andrewp111 says:

    Pork had a HUGE price spike, although it looks like it is settling down now. If you eat a lot of bacon, or just have it every morning, you saw massive inflation earlier this year. Ice cream and coffee are also up quite a bit. The pork spike is probably due to unique supply and demand factors and is not monetary inflation. Ice cream has been going up steadily for a good decade or more, mainly because the container size has been steadily dropping. Ice cream is a good measure of inflation.

  75. The Window Washer says:

    @Lyle

    your 6:17 comment is world class. On topic follow up on data that allows me to be lazy. What more could one ask for.

    Thanks to everyone else that did data crunching comments.

    Invictus: A great post that kept out your political feelings. I like you hot or cold. Cold data or hot emotions, when you mix the two comments get messy and we don’t get good imput like this.

  76. Lyle says:

    One issue that my father who taught ag talked about was different cycle times for different live stock.
    A report from the University of AZ suggest a 4 year stock reduction and thus price rise, followed by a 6 year stock build, and thus price fall assuming static demand levels. From the time producers decide to increase production its 2 to 3 years for cattle, about 10 months for hogs, and 3 months for chicken. This is consistent with Andrewp111′s observation as it is getting close to the 10 month mark. All these items were of course greatly affected by the hugh commodity runup in 2007 and 2008.

    I thought the olympics would break the cycle, but it occured about a month earlier.

  77. cognos says:

    Invictus – Thanks, very nice post.

    I think the key focal point is that “food at home” has dropped from 25% of consumption basket to only 7.5%. We can always see short-term price spikes in very small parts of the consumption basket (i.e. gasoline). Take this point further — the LARGE parts of the consumption basket are mainly SERVICES — healthcare, education, entertainment, financial svcs — or HOUSING.

    If wages are down, then service prices are down (i.e. – “the only real inflation is wage inflation”).

    And if wages are down AND housing is down. Man, prices must be deflating causing problems for banks and real estate. Is that happening?

    DeDude — A very nice comment. Everyone loves to “reference” on gas prices from 2000. Forgetting they were 100% higher in the mid 80s. So then when they are 200% higher in 2008, everyones going crazy… like there has been all this inflation. Gold is similar. Both oil and gold are up about 4% per year over longer term horizons. And man do they go through some 10-yr periods where they go down like an anchor.

    I see very little inflation. I carry a super-computer around in my pocket. Fly airplanes while watching TV and having access to all worldwide news and business info. My groceries are organic, chemical free, and have a worldwide selection of fruits and vegtables all year round. My healthcare today is better than the most expensive Swiss team of doctors of 20-yrs ago… and often in the form of a pill (Lipitor, Viagra). These basic middle-class lifestyle items were only (or not even!) available to billionaires 20-yrs ago.

    Remember — quality of service, availability, convenience… these are all elements of “goods” and “goods prices”. Starbucks lattes at $4 on every corner. This is NOT inflation, right? This is wealth. Inflation is when the same good (in same packaging, same locations, same quality, same experience) goes up because of “too much money chasing too few goods”.

    C’mon… the “lobster roll” is now a regular everyday item. Thats not inflation, thats wealth.

  78. torrie-amos says:

    Bill in SF,

    That has always been the game, now with keener eyes and higher numbers the price differentials are more noticeable.

    Again personally cause I’m good with numbers and have a budget I started buying in bulk five years ago, with any habit gets better and stronger with age. Like everything else discipline helps, lol.

    FWIW, if you buy higher dollar items some stores specialize in certain products. I buy one item from cvs because it has always been 10% lower then everyone else all the time, the other stores migh have a random sale that maches cvs.

    I’m now at the point I’m considering buying certain items in one swoop for 3 years, toilet paper, cleaning products, etc…………I have the room.

  79. Lariat1 says:

    Went to my local IGA ( independent grocer ), yesterday. Big banners in window. Local apples .79 lb., white mushroom 8oz. pk. 10/10.00, Pints of Guida half & half 10/10.00, IGA cereal ( corn flakes, honey nut, 14-18oz box @ 10/10.00, Perdue oven stuffer @ .89 lb and Pork loin center cut 1.99 lb. When I can buy food as if I am in a dollar store, I don’t see the inflation. This store was usually more expensive than big chain food stores. If I can get off my lazy ass this Sunday morning, I’ll wander up there and talk to the owner and get his humble opinion.

  80. baychev says:

    Invictus,
    you are fixated on the numbers, those are ‘the best sets of data you can get’ so they must by all means be true representation of reality.
    housing is weighted 7% in the CPI when it represents roughly 30% of each consumer’s expenditures. now tell me after this that those numbers could be relied upon for any sort of analysis besides gauging when the fed will alter interest rates.
    furthermore, CPI is by no means representation of consumer prices or inflation, it is a representation of what gov’t thinks would cost you to maintain a 1950-ties standard of living, it is NOT what you are paying at the register and that is explicitly said on the BLS site. by saying that CPI represents inflation and arguing here that there is no food inflation you are making yourself a fool, you are showing us you really do not know what the CPI means and you are out of touch with both reality and numbers.

    elementrary logic rules stipulate that with a false premise you can never reach to a correct conclusion.

  81. Argent says:

    Has anyone posted the recent price survey at Walmart posted at cnbc.com?

    http://www.cnbc.com/id/40135092

  82. Invictus says:

    I can find many references to the “secret” Walmart survey — but not the survey itself, which immediately sets off my BS meter.

    What I can find, right at the Walmart website, is this:

    Nearly 60,000 Items — Including All Electronics — Ship for Free This Holiday With No Minimum Purchase Requirement or Subscription Fees at http://www.walmart.com

    And I ask myself, is that inflationary or deflationary? And I also ask myself if there were any Reg FD violations if MKM got this report while no one else did.

  83. Bill in SF says:

    Invictus says,
    “Nearly 60,000 Items — Including All Electronics — Ship for Free This Holiday With No Minimum Purchase Requirement or Subscription Fees…

    “And I ask myself, is that inflationary or deflationary?”

    It’s neither. This is just another sales gimmick. All of the online merchants, including Amazon are playing this game. They take your order and wait… and wait… and wait… until you contact them about the order status. Then they try to up-sell you to pay for a quicker shipping option. At least Amazon doesn’t bill your credit card until it actually ships, unlike some other skunks.

    I had a New York electronics merchant call me everyday for a week, trying to get me to pay for a quicker shipping option. Finally, one day I was on the phone with the pleasant sales rep and the doorbell rang; it was UPS delivering my HDTV. That doesn’t happen any more, because they’ve learned not to actually ship until they’ve exhausted all their efforts against your resolve to actually get the agreed-upon price.

  84. Bill in SF says:

    OK, the last post was way OT… how did we get from food to electronics… hint, Invictus you started it with the walmart segway.

    Anyway, this should bring us back on course.

    Now, Invictus, How does this affect inflation/deflation?

    Robust Dungeness crab season expected:

    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/11/14/BAJG1GA4A2.DTL

    After a cyclical downturn between 2006 and 2009, populations of the tasty crustacean appear to be rebounding, giving hope to fishermen battered by recent cancellations and cutbacks of the salmon fishing season.

    “It looks like we’re on the upward leg of the trend cycle,” said Pete Kalvass, senior marine biologist with the California Department of Fish and Game.

    Initial reports from recreational crabbers – whose season started Nov. 6 – show hearty numbers of adult Dungeness crab in coastal waters, Kalvass said. That bears out the agency’s census of juvenile crabs in San Francisco Bay back in 2007 and 2008.

    Crab boat crews from Monterey to Bodega Bay are banking on a large haul. Most have spent the last few days fueling up, baiting traps and haggling over the per-pound price they will fetch from local processors.

    Dungeness devotees, meanwhile, are dusting off their favorite recipes in preparation for the spate of “crab feeds” that hits Northern California as soon as the season opens.

    “It’s tradition – people have crab for Thanksgiving, Christmas, and New Year’s,” said Jeanette Caito, whose family seafood processing business in San Francisco dates to the late 1800s. “Hopefully we’ll have a good season. We’ll see.”
    Dungeness crabs, meatier than their cousins and prized for their sweet flavor, are found from Santa Barbara to Alaska. Local Dungeness spend their early lives in San Francisco Bay before migrating into coastal waters. Only males that reach 6 1/4 inches across the carapace are harvested; smaller males and all females must be thrown back.

    Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/11/13/BAJG1GA4A2.DTL#ixzz15JK9qcah

    Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/11/13/BAJG1GA4A2.DTL#ixzz15JJWYEVY