US Wholesale Inflation Rises by Most in 3 Years

https://www.bloomberg.com/news/articles/2025-08-14/us-producer-prices-rise-by-most-in-three-years-on-services

by master_crab • 11 months ago

320 320 11 months ago

bloomberg.com

master_crab2• 11 months ago

https://archive.is/JmMFk

master_crab2• 11 months ago

Updated version of the story:

https://archive.is/xzohV

isbwkisbakadqv• 11 months ago

2.8% doesn’t seem that crazy to me? Don’t we target like 2-2.5?

throw-qqqqq• 11 months ago

It’s the change/rise that is high, not the value itself.

The producer price index increased 0.9% from a month earlier, the largest advance since consumer inflation peaked in June 2022, according to a Bureau of Labor Statistics report out Thursday

unreal37• 11 months ago

A 0.9% month-over-month increase is significant.

estearum2• 11 months ago

The Fed targets 2% at PCE (consumer) whereas this is PPI (wholesale/producer). Not always 1 to 1 but in general you expect PPI to be a leading indicator for what's coming for PCE. Part of the attention is for sure people being vigilant to see the earliest effects of the tariffs and... here they are pretty unambiguously.

The more significant concern it seems to me is the rate of increase. Nearly a full percentage point in a month seems like a lot, but I'm no expert.

infecto7• 11 months ago

I think you mostly nailed it. I suspected this was going to happen to with this recent filing season having most companies recognize tariffs and already state they are mostly getting passed on.

AnimalMuppet2• 11 months ago

The question is, is that full percentage point in a month a trend, or is it a fluctuation? You can't tell much by one month in isolation, or even one month compared to the previous month.

It's concerning. It's hard to say much more than that yet.

throw0101a6• 11 months ago

2% "over the long run":

* https://www.federalreserve.gov/economy-at-a-glance-inflation...

* https://www.richmondfed.org/publications/research/econ_focus...

nimbius• 11 months ago

According to the Federal Reserve, for many years, inflation in the United States has run below the 2 percent goal. higher prices for essential items, such as food, gasoline, and shelter, add to the burdens faced by many families, especially those struggling with lost jobs and incomes. At the same time, inflation that is too low can weaken the economy. When inflation runs well below its desired level, households and businesses will come to expect this over time, pushing expectations for inflation in the future below the Federal Reserve’s longer-run inflation goal. This can pull actual inflation even lower, resulting in a cycle of ever-lower inflation and inflation expectations.

The fed argues that, If inflation expectations fall, interest rates would decline too. In turn, there would be less room to cut interest rates to boost employment during an economic downturn.

this economics explanation feels like gaslighting every time i hear the fed mention it. the reserve literally pushed negative rates and quantitative easing for so long that people came to expect prosperity as a feature of the economic framework of the nation, and now that we have rampant inflation that cannot be controlled by normal means (prime rate) the fed somehow wants us all to understand its our fault for enjoying affordable burger meat.

terminalshort2• 11 months ago

It's our fault for voting in people that can't manage a budget.

kevin_thibedeau• 11 months ago

Gasoline prices are not higher. Above $4 was commonplace across the country 20 years ago. Now that only exists in high tax states and large metros. Gas is cheap in the US.

ninetyninenine• 11 months ago

Eh don’t fully blame the fed. Ultimately it’s a constellation of external forces that drives the fed to lower the rates for so long.

Part of those external forces involves consumers in a major way.

freddie_mercury• 11 months ago

The target is 2%, not 2-2.5.

Being off by 40% is cause for alarm in almost any circumstance.

aaronax2• 11 months ago

That is the rise from one year ago in the "less-volatile PPI metric that excludes food, energy and trade services". This month was a 0.6% rise. So some people might think about how more months of 0.6% rise would cause the yearly one to increase gradually, up to 7.2% eventually if there are 12x 0.6% months. That would be pretty high.

And then headline figure PPI was even higher at 0.9% for the month, 3.3% year.

hvb2• 11 months ago

0.6% of monthly inflation wouldn't be 7.2% you can't multiply like that.

So the real number would be 1.006^12=7.44%

And over 7% inflation is a bit more than 'pretty high' that's getting really scary if there's no clear outside reason for it

datadrivenangel• 11 months ago

0.9% monthly annualizes to 11.3%

jfengel2• 11 months ago

In November 2024, inflation was at 2.7%. Inflation for the whole year was 2.9%.

The public was so incensed that they threw out the government.

Tesl• 11 months ago

We all know Trump voters didn't give two shits about the price of eggs. That's not why they vote for him.

xnx• 11 months ago

That is 40% over the target.

IAmGraydon• 11 months ago

I mean no offense, but it's a bit surprising that someone on HN would not understand what's wrong with this statement. It takes a very basic understanding of math to know why the YoY says very little about rapidly changing inflation metrics. MoM is what you need to pay attention to.

micromacrofoot2• 11 months ago

that 0.8% difference is probably in the area of 100 billion dollars — nearly $300 per American in a single month!

BartjeD• 11 months ago

And this is after they massaged the numbers, to avoid getting fired?

mhh__2• 11 months ago

Now we only get to hear if inflation is "Aladeen" or "Aladeen"

qzw2• 11 months ago

Employment aladeen, inflation aladeen. Chances of stagflation looking very aladeen indeed.

pm90• 11 months ago

I don't think any existing numbers were officially changed, just that the head of BLS was fired.

hiddencost• 11 months ago

They fired the head of the BLS because they didn't like the numbers. Explicitly. You kinda have to conclude they're going to cook the books. Like they're doing everywhere else.

outside12344• 11 months ago

Yes, for THAT head of the BLS. It is super clear to the next head of the BLS that they deliver the number the president likes or they will be fired.

So, just like in Venezuela, that number will be delivered.

ferguess_k4• 11 months ago

I think it's more like "No Sir we won't be able to lower the rate right now, look at this number" moment.

diego_moita2• 11 months ago

In the end, it won't matter.

Only economists, policy makers, investors and people blabbing on the internet do care about stats.

Ordinary people just look at price tags; that's all they need.

bobbylarrybobby• 11 months ago

It's nice to have agreed-upon, citable facts though, even if only so that voters know who's full of crap during a debate. When the next R candidate says that Trump handled inflation beautifully, it's important to be able to point to an authoritative source that shows that that claim is BS.

outside12344• 11 months ago

The challenge with that idea is that investors and business people depend on these numbers being solid for investment decisions like "building a new factory" or "investing in GPUs."

Without solid numbers I wouldn't be surprised to see a shift to "assuming the worst case" and much more conservative and lower investment.

tomrod2• 11 months ago

I fall into all four categories, which identity am I allowed to require that we not kill our economy with inflation?

the_real_cher2• 11 months ago

Inflation too high?

Straight to jail.

Inflation to low?

Believe it or not, straight to jail.

motbus3• 11 months ago

More like the Epstein Massage

mark_l_watson13• 11 months ago

Over the years I have read a few articles or blogs that make the argument that if government inflation figures in the US were calculated as they do in Europe, then our reported US inflation figures would be much higher. Can anyone here verify this?

Our main problems involve under the table unreported to the public military expenditures. If you look at a map of our military bases, we have many bordering China. I think our total number is close to 900. Those costs are a bleeding hemorage to the middle class tax payer who aren’t getting a cut of military profiteering because they don’t own ‘defense’ stocks.

Consumer debt is almost as much of a worry as government debt.

Eventually countries that don't spend most of their treasure on their military will win. There has to be a balance between true defense spending and healthy spending like feeding and educating children, infrastructure, R&D that helps society, etc.

andsoitis• 11 months ago

Over the years I have read a few articles or blogs that make the argument that if government inflation figures in the US were calculated as they do in Europe, then our reported US inflation figures would be much higher. Can anyone here verify this?

Your question at the end suggests those blogs and articles didn’t include compelling evidence for the case they were making. If true, then it is worth reconsidering whether it makes sense to incorporate into your world view.

mark_l_watson13• 11 months ago

Good point. How do you gather information? I split my time about half each reading US news and news from other countries. There are a few people I find believable like Dr. Jeffrey Sachs and retired congressman Ron Paul (these two guys are quite different politically) and I will listen to each of them once or twice a month, just to occasionally get non-mainstream news viewpoints.

monkeyelite4• 11 months ago

That’s because consumer inflation is subjective. You can choose which goods and data point represent personal experience.

As you well know the government uses “hedonic adjustment” which is when they say a car in 2025 is so much better that a car in 1980 that higher prices should be reduced to reflect that better good.

A different model is that you need A car to participate in society so even if it’s better we just raised to the cost to exist.

mlinhares• 11 months ago

Defense stocks are shit to own, you only make money by buying up politicians and landing large contracts.

queuebert• 11 months ago

In other words, comparatively little of their profits are returned to shareholders. Insiders are making money, but the rest of us are shut out?

tootie3• 11 months ago

Likely very specious. Inflation is an emergent property. CPI is measured by looking at consumer prices which is pretty transparent. The underlying causes may be obscured and, in fact, we see a lot of debate on the causes but that is irrelevant to actually measuring CPI.

mark_l_watson13• 11 months ago

Well, look at the history of removing things like living necessities and increasing things that have dropped in price like TVs.

Calculation of CPI is deranged by the cherry picking of what they measure.

9rx7• 11 months ago

I have read a few articles or blogs that make the argument that if government inflation figures in the US were calculated as they do in Europe, then our reported US inflation figures would be much higher.

Do you mean the other way around? The EU headline inflation rate doesn't include costs of owning a home like the US' does (owner's equivalent rent), which, as you might have guessed if you have ever wanted to own a home, is a component that has been quite inflationary, at least as far as recent memory goes. Or maybe those blogs were talking about some point a long time ago when that component pulled the US figures down (e.g. during the last housing crash)? What specific details did they give?

FirmwareBurner• 11 months ago

Exactly. Don't know about all of Europe, but I find the way inflation is calculated in the countries i lived here as bad faith since it intentionally omits housing costs.

So just like a commenter below said, I haven't seen a single country where I spent any significant amount of time, where official inflation numbers were not seeing as a complete joke by the common folks. Everyone unanimously agreed the numbers are gamed in order to control public opinion.

I've also seen a lot of gaslighting from politicians with mental gymnastics on how the population is not poor but actually rich because "look how many (Asian made)washing machines you can buy with an average salary here today, while for previous generations this type of items was a luxury".

Yeah mate, my parent could barely afford a European made washing machine, but they could afford their own house at age 25-30, working jobs that required litte education. Must be all that avocado toast to blame.

leogiertz• 11 months ago

This is actually quite interesting. I ran into Stefan Ingves on the street in Stockholm, the former Governor of the Swedish Riksbank, and asked him why the Swedish inflation calculations did not include housing prices.

The short answer is that they're waiting on a harmonised EU wide system for that will include housing in some measure, but that has been taking longer than expected and they didn't want to change the system in Sweden before the new system was finished...

Quite frustrating given the massive increase in housing prices since '08. Would probably have been much lower with a higher interest rate.

hshdhdhj44443• 11 months ago

What does debt have to do with the calculation of inflation?

It may impact inflation but you seem to be claiming debt is a component of inflation calculation, when inflation is little more than the change in prices.

phkahler• 11 months ago

> What does debt have to do with the calculation of inflation?

Debt isn't a component of inflation calculation but they are related. During Covid the US government increased the deficit (not debt, the derivative of debt) by a trillion dollars (no partisan stuff here, Trump did it first and then Biden). The infusion of money into the economy was one of the drivers of inflation between 2021 and 2025. You may ask, where did the money come from? I don't know. The government "borrowed" it, but from whom I don't know. Money "invested" does not necessarily get into the economy, but money invested in treasury bond gets spend by the government and definitely ends up in the economy.

I would love to have time (get paid?) to sit around and develop useful economic models. All I ever see is people offering simple cause and effect relationships (like I did above) without showing anything close to what I would consider a reasonable model of the economy.

mark_l_watson13• 11 months ago

Thanks for pointing out something: I didn’t mean that debt is a component of CPI.

Interest on 37 trillion in US government debt as well as huge consumer debt certainly is a long (and short term?) drag on the economy, but I accept your point that I don’t understand the correlation.

I have a simplistic way of thinking about the economy: I tend to view things as being healthy or unhealthy to the economic well being of all people in my country. In general, hiding information from the public is not healthy. Look, this is just my opinion, but I believe that our government is in the business of hiding information from the public; the government (both political parties) exists in its present form to protect and nurture the special interests who pay them off one way or another.

terminalshort2• 11 months ago

It's like 3% of GDP. Not that big of a deal.

Thorrez2• 11 months ago

If the US dollar was being devalued faster than reported, and the Euro wasn't, wouldn't that be visible in the exchange rate?

mark_l_watson13• 11 months ago

I think Europe has worse financial problems than we do.

kingkawn• 11 months ago

The Pentagon’s informal name for those bases is “the Noose.”

infecto7• 11 months ago

Had trouble following your core point. Do you have references regarding 900 bases with many bordering China. I have never seen such figures or that they border China.

mark_l_watson13• 11 months ago

Google Gemini 2.5 Pro just estimated 200 military bases close to China (I used “close” in my prompt, not very precise, so that number is likely including bases in the general area.)

Gemini estimated 750 to 800 total military bases.

zug_zug2• 11 months ago

I can't speak to this, but I suspect something is afoot.

I know my mom went to a university that she paid for with a part-time job while a student. Currently that university's tuition is 80,000 a year. When I looked at what inflation figures said for college education, it wasn't enough to account for that 10x+ increase.

9rx7• 11 months ago

Inflation seeks to understand the change in value of a currency, not the change in value of a good or service. College being worth more (in the eyes of the customer), rather than the currency being worth less, is what accounts for the 10x increase.

I don't know how old your mom is, but it wasn't that long ago that people only went to college if they had good reason to, not because they were told they "had to" under the "A diamond is forever"-style marketing campaign. That shift in mindset enabled colleges to charge basically whatever they want. That is not a product of inflation.

apical_dendrite• 11 months ago

Most US students don't go to selective private universities that charge $80,000 a year (and most students at those universities don't pay $80,000 a year). Only about a quarter of students go to private universities and most of those are not particularly selective. Most students go to state schools that are a lot cheaper and where tuition is subject to different economic forces.

You can't decide that official inflation figures are inaccurate based on a specific, outlier example, when the official figures are based on averages.

chasd00• 11 months ago

as far as college education prices go, there's no ceiling on education prices because there's no risk to lenders, they can lend as much as they want with no risk. As long as young people feel there isn't an alternative to a college education and risk to lenders is close to zero then there is no limit to what colleges can charge.

saghm2• 11 months ago

That's wild, I had no idea they had gotten that high. When I was in college (2012-2016), the most expensive places were in the $50k-60k range, which already was quite absurd. The fact that they've grown so much even in the past decade is mind-boggling.

outside12344• 11 months ago

Many more people want to go to university now yet we haven't increased the supply of quality universities.

I suspect this is also bimodal as well. The top universities can charge this, but the bottom probably are struggling to survive.

Aurornis4• 11 months ago

Currently that university's tuition is 80,000 a year.

University tuition is a known example of an extreme inflation outlier. The cause is also known: The availability of loan dollars and the laws preventing their discharge in bankruptcy.

Tuition figures are also misleading because almost nobody pays that number. The tuition number is the maximum possible amount someone could pay without financial assistance, but when you look at the numbers you would be surprised to see that often 80% or more of students have some financial assistance. At many universities now, students with families below certain income levels have tuition adjusted down to $0.

You can’t judge university prices by the number on the website any more.

Workaccount26• 11 months ago

The defence budget is America's job program. Very little of the money that is defense spending ends up in defense shareholder pockets. The overwhemling vast majority goes to propping up America's (now) anemic industrial base. Remember that virtually all defense dollars are constrained to only be spent on American made things and services. And most of money sent to the big contractors goes to the gazillion sub-contractors they use.

This is why the defense budget is never cut. By anyone red or blue. It's a funnel of money that can be pointed at any location in the US and give a bunch of decent full benefits jobs.

atomicnumber3• 11 months ago

It is also kind of handy that we get aircraft carriers out of it too.

Mind you, I'm a socialist, so like, I personally wish we could move a bunch of the "jobs program" stuff over so that instead of carriers, we get well-educated, fed, and cared-for children and good medical care for all, and stuff like that. And that if we want a certain number of aircraft carriers, we should just try to actually get that many carriers on purpose for the cost that building the carriers entails. Without also trying to do 10 million other things on top of it to the point that the carrier output is a side-effect.

But like, it's probably better than no carriers at all, which is how it's going for lots of other countries. So I guess that's something to hold on to.

mbfg• 11 months ago

I believe less than a quarter of the defense budget is for salaries and compensations.

landtuna• 11 months ago

The US defense budget, as a percentage of GDP, has been cut a huge amount! https://data.worldbank.org/indicator/ms.mil.xpnd.gd.zs?locat...

If you don't think it makes sense to scale it by GDP (though I do), then in real terms it has gone through cycles since 1965, with definite periods of decrease, even though the overall trend is upward: https://www.johnstonsarchive.net/policy/edgraph.html

anjel• 11 months ago

https://www.shadowstats.com/ Tl;Dr. The outlook has changed little. ShadowStats numbers show that the economy remains in a deepening downturn, intensified by ongoing Federal Reserve Rate Hikes. Headline inflation faces a near-term rebound, thanks to the continuing and broadly based excessive growth in the Money Supply and Systemic Liquidity, as triggered by the Fed. Separately, with the Debt Ceiling now eliminated by Congress and the Executive Branch, unfettered Federal Deficit Spending increasingly is adding fuel to the unfolding Inflation. The systemic Inflation is not driven by the Fed’s proclaimed overheating economy. Such an economy simply does not exist, at present.

mikeyouse• 11 months ago

Shadow stats is a crank blog with absolutely no validity. Choose your debunking source, but the owner of the blog literally just adds an amount to the official rate that he thinks represents the government error. There’s no calculation, there’s no “pre-1980 methodology”, just one dude’s vibes. If the rate has averaged 9% over the past 25 years, you’d be talking about over 750% inflation since 2000. You can buy any manner of new car today for $35k - could you buy a new car for $5k in 2000? Did a gallon of gas cost $0.40/gallon? Could you rent a modern $1,500 apartment for $200/month?

https://www.fullstackeconomics.com/p/no-the-real-inflation-r...

hibikir• 11 months ago

It's a very difficult belief to have in the long run, because if the source of the "error" is always in one direction, it will compound to price level differences impossible to hide.

It's like the traditional view on GDP growth. Be a little slower than a similar country (say 0.5% a year) wait 20 years, and your formerly similar neighbor now sees your country as quite poor.

danans• 11 months ago

And yet many less-rich countries have better infrastructure and health outcomes than the US. It seems clear that chasing GDP without also considering what is happening to wealth distribution has socially hollowed the otherwise-rich US.

klooney• 11 months ago

Eventually countries that don't spend most of their treasure on their military will win.

Stipulating that they don't get eaten by their bigger neighbors. We're going to miss the Pax Americana.

mark_l_watson13• 11 months ago

We will miss the US Navy keeping most shipping routes open and safe.

Simon_O_Rourke• 11 months ago

Eventually countries that don't spend most of their treasure on their military will win.

Win what exactly?

sleepyguy• 11 months ago

Eventually countries that don't spend most of their treasure on their military will win. There has to be a balance between true defense spending and healthy spending like feeding and educating children, infrastructure, R&D that helps society, etc.

Ask Ukraine how that worked out for them. While your at it, tell the Baltics they should focus on society and not the Russian world that is coming for them.

christianqchung• 11 months ago

Our main problems involve under the table unreported to the public military expenditures.

This is a common claim but I don't think it's supported. Defense spending is about 3.3% of GDP [0]. 15 years ago it was 4.9%, 40 years ago it was 6.45%, and it hit almost 10% in 1967 during peak spending in the Vietnam war. World War 2 made it around 35%. Also, what does unreported mean? Are you claiming that there is a significant amount of money being spent that isn't part of the reported military budget? How much? Defense spending was about 13% of the government budget in 2024 [1].

If you look at a map of our military bases, we have many bordering China. I think our total number is close to 900.

How much do those cost? I understand the claim is a lot, but how much? If you don't know, why pick this as an example?

Those costs are a bleeding hemorage to the middle class tax payer who aren’t getting a cut of military profiteering because they don’t own ‘defense’ stocks.

Defense stocks have not performed better relative to the Dow Jones. Raytheon stock has increased 5-fold since 1985 while the Dow has increased 33-fold over the same period. If defense was easy money, you'd see hedge funds loading up on it year on year. These companies aren't valued that much. Raytheon is valued at 208B [2], which is less than McDonalds, Nestle, T-Mobile, AMD, Home Depot, and Costco individually.

Eventually countries that don't spend most of their treasure on their military will win. There has to be a balance between true defense spending and healthy spending like feeding and educating children, infrastructure, R&D that helps society, etc.

I agree with this, but given that America only spends 13% of the budget on the department of defense, your own claim is claiming an American win. In 2021 the American Rescue Plan induced a giant amount of domestic welfare spending plans such as almost doubling the child tax credit. This was a tremendously expensive plan that cut child poverty in half, but people didn't feel strongly enough to successfully pressure politicians to keep it, which does seem pretty frustrating to me.

Also, I see you're using AI for sources below. Feed your comment into GPT 5 thinking and ask for an opinion, because it apparently thinks your inflation claim is completely reversed.

[0] https://www.macrotrends.net/global-metrics/countries/usa/uni...

[1] https://fiscaldata.treasury.gov/americas-finance-guide/feder...

[2] https://companiesmarketcap.com/

abtinf8• 11 months ago

When you make insane claims like “the US has 900 military bases close to China”, you discredit yourself and your entire body of work.

4fterd4rk• 11 months ago

They didn't say that. Your reading comprehension is poor.

mark_l_watson13• 11 months ago

Please quote me correctly. I said:

“” If you look at a map of our military bases, we have many bordering China. I think our total number is close to 900.””

I intended to say 900 in the entire world, but I corrected that in a comment to 750-900.

giantg2• 11 months ago

US vs Europe inflation https://www.bls.gov/opub/mlr/2006/05/art3full.pdf

"balance between true defense spending and healthy spending like feeding and educating children, infrastructure, R&D that helps society, etc."

Spending does not equal outcomes. There doesn't need to be a spending balance, but there should be an outcomes balance. We can see this with school funding. There are some schools that are underfunded and underperform, but there are also schools with adequate funding that underperform lower funded schools. The implication that you are making is that we could fix things just by cutting back military spending. However, we are also leaders in some of the areas you mention already, such as R&D. The Pentagon fails their audits frequently and should be trimmed down in areas that it makes sense. However, just shifting that money to education isn't going to make that much of an impact.

Aurornis4• 11 months ago

Over the years I have read a few articles or blogs

Without linking the blogs or articles it’s hard to say much.

Inflation is a topic that attracts a lot of quackery. There are a lot of blogs and websites that go viral from time to time with claims that the “true” inflation number is dramatically higher.

There is a quick reality check you should run whenever you encounter these claims: Take the claimed inflation number over a period of time and calculate the net multiple. Then run a reality check on something like a $500,000 house or a $5 hamburger.

There’s one prolific website and author who claims the “true” inflation rate is some number like 11% going back decades. If you do the math, that means something purchased 50 years ago in 1975 would cost 185 times less. A $1,000,000 home today would have been $5,400 in 1975 and a $5 hamburger today would have been less than $0.03. Obviously these numbers don’t work, so you can discard the author’s claim.

Actual inflation numbers over long periods are very sensitive to small changes due to compounding. Even over a 10 year period. When you see someone claiming dramatically different results, run a quick math check.

Also be careful for the cherry pickers: They’ll identify one or two outlier year-over-year jumps (eggs during COVID, home prices during a housing rush, insurance prices in a city after a fire) and try to use those as their basis.

username332211• 11 months ago

At the risk of defending quackery, most claims about inflation being inaccurate involve the changes made to CPI estimations in 1996. I'll go as far as to say I've never heard any claim that is inaccurate going back to the 1970s.

deeg5• 11 months ago

Good response. I might suggest not using housing because so many people treat it like an investment, which means its value goes up faster than inflation (if it's a good investment). But otherwise I totally agree with you.

whimsicalism4• 11 months ago

Secret defense spending would not and should not impact inflation numbers except in so far as it impacts the already measured consumer basket, the US does not have 900 military bases near China, etc. etc.

Just not a very good comment in my view.

GreedClarifies• 11 months ago

Fred has the data:

https://fred.stlouisfed.org/series/CP0000EZ19M086NEST#

https://fred.stlouisfed.org/series/SUUR0000SA0

I’m driving, it’s difficult to put them on the same chart and normalize. But they are very similar. There are differences in methodology (housing, healthcare) but those generally add a small amount to US inflation chained index vs HICP.

layer82• 11 months ago

You read and post on HN while driving?

CalRobert• 11 months ago

Please don’t use your phone while driving.

mulmen• 11 months ago

Put your phone it down before you kill someone. You’re taking an indefensible risk.

timcambrant• 11 months ago

American consumer debt is also a different beast in the US because households tend to counter inflation and higher prices by shifting over their monthly spending to credit cards. Most Europeans use credit only for certain goods and mostly pay the full amount off every month. This creates an elasticity in the US, where inflation leads to higher prices which slowly leads to higher household debt, which makes recessions more grave when they do appear. Europeans are instead quicker to move to cheaper stores and start buying cheaper goods in bulk.

Al-Khwarizmi2• 11 months ago

Eventually countries that don't spend most of their treasure on their military will win.

Being from Europe, I wish. But for now, it doesn't seem to be the case. Your military power basically allows you to bully Europe and many others, tell us what to buy and whom to buy it from, which is an enormous economic advantage. You just made our puny European leaders promise an enormous investment in the US defense industry in the moment where we would need to propel our own industry the most (it probably won't materialize, but still, we'll spend at least some of it because most of our leaders don't want to be in a bad standing with the US). You are also bullying us into signing contracts with inferior American suppliers rather than Huawei, among many other things. All of this happens mainly due to the US's disproportionate military power. Meanwhile, you can afford having a president who is borderline illiterate (and actually makes binding decisions) without the economy even meaningfully sinking (stocks at historical maximums).

So spending in the military seems to actually be a good choice, unfortunately.

rsynnott2• 11 months ago

The US and EU have reported broadly similar inflation numbers for the last five years or so, with the EU generally being a little lower. If your thing was true, you'd expect a vast gulf in prices to have opened up, but it doesn't really seem to have.

Anecdotally, I was in SF once or twice a year for a few years before the pandemic, and it felt like mostly similar prices to Dublin (an expensive European city). I've also been back a few times since the pandemic, and it now feels somewhat more expensive than Dublin, but not dramatically. Which is about what you'd expect if the official inflation figures were broadly correct. Obviously this is super-anecdotal, mind you.

throw0101a6• 11 months ago

The surge in services costs seems to be a bit of a surprise (?):

Services inflation provided much of the push higher, moving 1.1% higher in July for the largest gain also since March 2022. Trade services margins rose 2%, coming amid ongoing developments in President Donald Trump’s tariff implementations.
In addition, 30% of the increase in services came from a 3.8% increase in machinery and equipment wholesaling. Also, portfolio management fees surged 5.8% and airline passenger services prices rose 1%.

* https://www.cnbc.com/2025/08/14/ppi-inflation-report-july-20...

The government on Tuesday reported a mild increase in consumer prices in July, though rising costs for services like dental care and airline tickets caused a measure of underlying inflation to post its largest gain in six months.
While financial markets have priced in an interest rate cut from the Federal Reserve next month, rising services inflation and the expectation tariffs could still significantly boost goods prices left some economists doubtful of a resumption in policy easing in the absence of labor market deterioration.

* https://www.reuters.com/world/us/us-producer-prices-accelera...

When it comes to (Fed) policy, the other thing they look at besides inflation/PCE is employment, which appears to be softening (see recent revisions which caused recent Trump-BLS turmoil).

The US risk for stagflation seems to be growing:

* https://www.investopedia.com/terms/s/stagflation.asp

* https://en.wikipedia.org/wiki/Stagflation

* https://paulkrugman.substack.com/p/its-beginning-to-smell-a-... (check out the music video link at the end)

tim3333• 11 months ago

The current policies seem almost designed for that. Choke real growth with unpredictable tariffs and print lots of money.

Cuuugi• 11 months ago

Tarrif's will do that...

yalogin2• 11 months ago

Oh no someone is getting fired again. This poor soul forgot that telling the truth is forbidden

swarnie• 11 months ago

Maybe these are the numbers after they were fudged to save a job?

yalogin2• 11 months ago

With a d———- there is no nuance. You don’t get credit for fudging them and making them less bad, you save your job by releasing a positive number, the more positive the better. Truth be damned

projectazorian2• 11 months ago

The problem the admin has is that economists at the BLS by and large aren't scared of getting fired. That work experience is gold in the private sector - most of them can easily get a job in finance and 3x-4x their comp.

troyvit• 11 months ago

I'm not being sarcastic when I say it probably looks great on an economist's resume to say they were fired by the Trump admin.

Havoc• 11 months ago

Are there inflation indicators that aren’t government controlled? Don’t think anything coming out of trump influenced bodies is worth the paper it’s on anymore

Nicook2• 11 months ago

There are plenty of indicators, not like its an exact science. Can trust the government one to be always under-reported, the incentive is obvious. I'm a fan of gold prices for longer periods of time.

abtinf8• 11 months ago

Gold.

The purchasing power of Gold has been remarkably consistent over the long term.

That is, if you convert the gold to dollars, how many eggs could you buy?

To learn more, read up on the work of Keith Weiner of Monetary Metals, or listen to the early episodes of his podcast “The Gold Exchange”.

Workaccount26• 11 months ago

The problem with gold is that it's price fluctuates just like any other commodity. The practical uses of gold accounts for only ~8% of gold mined, while half is for vanity (jewelry, a luxury product) and the rest for speculation and reserves. Similar to fiat, most of the value in gold is in people believing it has value.

dchftcs3• 11 months ago

The price of gold is not immediately responsive to goods inflation, it can be lagging or leading and the correlation can also fluctuate. Long term it's been good at tracking money supply but short term it doesn't necessarily give you a timely signal.

wqaatwt6• 11 months ago

So there was no inflation whatsoever between 1980 and 2000. In fact there was slight deflation since the price of gold actually declined?

It’s easy to make data to fit your narrative when you ignore everything that conflicts with it..

duxup2• 11 months ago

Nothing as complete or reliable (historically speaking) as the government numbers. Truth is they're just the best at doing it, or were.

tim3333• 11 months ago

I asked perplexity and there are a few independent calculations (ShadowStats, Truflation, Billion Prices) that put the rate at about 10%

https://www.perplexity.ai/search/what-is-the-us-inflation-ra...

throw0101a6• 11 months ago

ShadowStats

Just no:

Responding to prior criticisms made by economist James Hamilton, John Williams explained in a private phone call that Shadowstats does not actually recalculate BLS data, rather, the Shadowstats CPI merely adds a constant to the officially reported numbers.[28]

* https://en.wikipedia.org/wiki/Shadowstats.com#Negative

    SHADOWSTATS(t) = 1.9 + 0.0055*t + CPIAUCNS(t)

* https://old.reddit.com/r/badeconomics/comments/3zik5t/shadow...

* https://www.fullstackeconomics.com/p/no-the-real-inflation-r...

Truflation

* https://old.reddit.com/r/AskEconomics/comments/1beg6db/how_r...

Billion Prices

They actually published code so other folks could recreate:

* https://en.wikipedia.org/wiki/MIT_Billion_Prices_project

the_real_cher2• 11 months ago

We're losing 10% of our money annually. That's absolutely insane.

Analemma_• 11 months ago

If you actually stop and think about it for a couple seconds, you should realize immediately that a “secret” inflation rate of 10% is impossible. You can lie about that for a month or two, but 10% annual inflation means prices double every 7 years, which is obviously not what we observe.

deeg5• 11 months ago

I briefly scanned the BPP data and it was pretty close to the official CPI. The BPP is usually a bit higher, and for a short time noticeably higher, but they generally converge.

https://thebillionpricesproject.com/datasets/

johnsimer• 11 months ago

truflation has inflation at 2% right now, not 10%

https://truflation.com/marketplace/us-inflation-rate

AtlasBarfed8• 11 months ago

What you really need to understand about inflation, is that we've had particularly exceptionally low long-term inflation in America for the last 50 years, outside of stagflation in the '70s.

And this is all enabled by globalization and global trade. Globalization fundamentally provides arbitrage for two things. Labor costs, and environmental regulation.

Because there were a lot of poor desperate countries that would build your stuff for near slave labor conditions.

In particular, China of course. But China has now passed through its phase of poor desperation. It is now an urbanized economy. So of a lot of other poor desperate countries aren't quite as poor desperate.

Globalization is fundamentally enabled by the US Navy and US military supremacy guaranteeing shipping trade on the oceans.

This has not been the historical Norm. It's actually historical anomaly caused by the power vacuum of world war II, and secondarily by the fact that the Cold war was between the US and maritime power and Russia, who are effectively landlocked.

Some scholars term China as a continental power, especially cuz of their history of invasion like the Mongols, but unlike Russia, China has a very large coastline with a lot of ports that aren't locked in by Arctic ice.

They are a hybrid Continental and a maritime power, and based on their shipbuilding, their ambitions are to become a maritime power.

This combined with American lack of enthusiasm for maintaining this global order, likely means that globalization will come to an end.

And that means onshoring production back from China.

We'll see if this actually happens, but that is the trend long-term.

And that involves a huge amount of switching costs, which essentially is going to be inflation.

I'm certainly not going to sit here and say that Trump's economic policies are correct. Of course, the proper way to handle a transition of reonshoring our production from our previous 50 years of globalization would be gradual and controlled.

Not a bunch of stupid chaotic tariff policies.

But essentially what Trump is doing is in line with everything I've described.

judahmeek• 11 months ago

But essentially what Trump is doing is in line with everything I've described.

No. Trump's tariffs are too unfocused to accomplish any goal besides increasing American inflation from what I've read.

Trump's tariffs on raw materials, metals, etc make no sense whatsoever.

Motivating the creation of new mines or refining facilities should have been done through subsidies, possibly combined with promise of future tariffs.

And, obviously, Trump's tariffs on raw materials raise the cost of construction & composite products, which will likely push manufacturing out of the U.S.

amy_petrik• 11 months ago

Globalization is fundamentally enabled by the US Navy and US military supremacy guaranteeing shipping trade on the oceans.
This has not been the historical Norm. It's actually historical anomaly caused by the power vacuum of world war II, and secondarily by the fact that the Cold war was between the US and maritime power and Russia, who are effectively landlocked.
This combined with American lack of enthusiasm for maintaining this global order, likely means that globalization will come to an end.

Oh here friend, I think you forget to add a citation to all that, here's your citation so people know where the idea come from (not you): https://en.wikipedia.org/wiki/Peter_Zeihan

bigbadfeline2• 11 months ago

What you really need to understand about inflation, is that we've had particularly exceptionally low long-term inflation in America for the last 50 years, outside of stagflation in the '70s.

What you really need to understand is that we can, and we must absolutely, generally and non-exceptionally have low inflation at all times. There's absolutely no sane reason to have high inflation in a low-corruption financial system - none!

Globalization... US Navy... US military... China hybrid... American lack of enthusiasm for guaranteeing shipping trade on the oceans.

A bunch of red herrings meaning nothing... It's not lack of enthusiasm, it's the overabundance of enthusiasm for tariffs and sanctions backed by the same US Navy & US Military to maintain a restricted trade regime which, not-accidentally, results in the US public being trapped in a monopolized and inflationary market.

And that involves a huge amount of switching costs, which essentially is going to be inflation.

You mean, the population will bear the costs via the inflation tax, while the rich will be getting richer, because... historical norms should not be broken, especially this one?

Historically, messed up trade led to global wars, actually, it's either global trade or global wars, there's no middle ground. You failed to mention that important historical norm which is also one of the ways to make the rich richer.

The historical norms are something we should absolutely steer clear of, not use them as excuses for more nonsense in the future!

throw0101a6• 11 months ago

Are there inflation indicators that aren’t government controlled?

There have been research programs that collected the data themselves:

* https://en.wikipedia.org/wiki/MIT_Billion_Prices_project

htrp• 11 months ago

which became a hedge fund data provider

tmaly• 11 months ago

I don't trust any government numbers regardless of who the president is. There will always be pressure to fudge the numbers to make who ever is running things look good.

There use to be a billion prices project out of MIT that got shutdown years ago because it show higher inflation than what the rulers at the Fed wanted to show. I believe its funding was pulled or something like that.

qzw2• 11 months ago

What’s crazy is that of all the fudgeable numbers in economics, consumer inflation is the one they should try to be the most honest about. It’s something that consumers can more or less directly observe, so having an official number that’s much below people’s “wallet meter” is doing nothing but erode trust in government. In fact, given that a steady inflation rate actually leads to bigger and bigger price increases, most people are going to feel worse about it at a visceral level. If the government wanted to build credibility with the public, they’d come up with a metric that better aligns with people’s actual economic situations. But then that might lead to people demanding higher wages, so I guess it’s a nonstarter in America.

deeg5• 11 months ago

Do you have any evidence it was shut down by the Fed? I looked briefly at the BPP numbers and they aren't that far off the CPI. There were even a few times it was lower than the CPI. There was a 2 year period that BPP was noticeably higher but it eventually converged.

https://thebillionpricesproject.com/datasets/

buyucu• 11 months ago

This is what happens when the same item now has a %20 tariff on it.

monkeyelite4• 11 months ago

Then they use an alternative which will raise the price less than 20%.

elzbardico2• 11 months ago

Frankly, I haven't seen a single country where I spent any significant amount of time, where official inflation numbers were not seeing as a complete joke by the common folks. And my experience usually matched it.

There's plenty of space to hide reality when building a price index.

Price index do not capture the reality of most people cost of living. They don't capture the family that have to buy margarine instead of butter, because butter became too expensive, while margarine became cheaper, Weight both items as the same, and voilá! no inflation, increases in the price of butter were cancelled by cheaper margarine, fuck you if you prefer butter.

We can also do the same with housing: Capture prices as the average of a basket of cities. In reality, some cities will have absurd price increases while others are in decadence. The average prices increase of a disputed locality like NYC metro area will probably be masked by the fact that houses in BeltRustAssEnd, MI are becoming increasingly cheap. But, for the real person, what the fuck matters if BeltRustAssEnd houses are cheap as bananas? Who can get a job there?

And of course, a single number cannot capture the subtleties of reality like the fact that while it is great that 80" TVs are now so cheap that they can be bought by the commoner, this fact means fucking nothing if having a roof over your head in a place where you don't need to spend most of your live commuting is becoming increasingly too expensive for a lot of the same folks. Too bad the commoner is just a paycheck away from being in the streets as he cannot pay for a house! He now has a TV that not even Queen Elisabeth could have just a few years ago!

jahnu2• 11 months ago

Frankly, I haven't seen a single country where I spent any significant amount of time, where official inflation numbers were not seeing as a complete joke by the common folks.

The public in general can be really bad at perceiving the truth. I might take note of people's feelings to go and recheck something but I would not trust peoples feelings with stuff like this to make any sort of conclusion.

Verifiable metrics* are the only way to get any sort of objective handle on this.

* Edit: I replied below that I should have said verifiable metrics and context with discussion. Verifiable metrics are necessary but not sufficient.

ferguess_k4• 11 months ago

No. It's more like the elites don't GaF about the ordinary people, and then there is no trust between the two.

elzbardico2• 11 months ago

Let's unpack this. The real, objective reality of people living their lives is not the Truth.

But, instead a single index based on what is basically a bunch of arbitrary choices of a bunch of bureaucrats, subject to all kind of agendas and political/economical/social pressure, and based on an simulacrum of science that stands upon a bunch of questionable premises and unfalseable propositions is Truth.

The pythagorean cult of number has been a disgrace for the human race.

ferguess_k4• 11 months ago

Yeah. Most people should build their own inflation index. It's not hard whence you realize the biggest expenditures are usually 1) mortgage/rent, and 2) food. I wouldn't be surprised that given the rate hiking in recent years going along with higher food price, some people see dramatic "inflation".

Ofc one can always say that No this is not the academic way to define inflation, but who cares?

mendelmaleh• 11 months ago

In 2022 I scraped the current prices for things I bought on amazon the year before, and got a 7% increase.

Unfortunately amazon stopped providing order reports recently...

``` $ inflation -y 2021 -f items.csv 86 successful items, 30 failed items 2256.76 total 2021 2427.62 total now +170.86 (+7%) difference ```

lentil_soup• 11 months ago

sure, but are there any alternatives? To make data backed decisions you need to measure something, even if not perfect it gives you some sort of relative direction for the things measured. Not perfect but better than no data at all

Aloisius• 11 months ago

This is the the Producers Price Index. It tracks wholesale prices which are far less affected by locality. It also doesn't measure housing prices at all.

The PPI is not a measure of consumer inflation. It's a leading indicator for it.

projectazorian2• 11 months ago

Price index do not capture the reality of most people cost of living. They don't capture the family that have to buy margarine instead of butter, because butter became too expensive, while margarine became cheaper, Weight both items as the same, and voilá! no inflation, increases in the price of butter were cancelled by cheaper margarine, fuck you if you prefer butter.

I don't know how this works in other countries, but in the US the weights do not change month to month like this. If consumers keep making this choice over a period of years the index will eventually get reweighted, but reweighting only happens once every few years.

(Of course, if you were an official put in charge specifically to cook the books you could just reweight on a monthly basis like you describe, which is something that might well happen now...)

flanked-evergl2• 11 months ago

In Norway our food prices has gone up by more than 4 in one month while we are destroying any capacity for local production while we have protectionism that would make Trump blush.

How is that not newsworthy, but this is?

Nicook2• 11 months ago

america/trump obsession

Workaccount26• 11 months ago

Norway has a population half that of New York City.

celsoazevedo• 11 months ago

It's probably newsworthy, but this is an American website and Norway isn't exactly on the same level as the US. I wouldn't expect the same level of attention, at least internationally.

dragontamer• 11 months ago

In the USA, food prices are non-core inflation and most volatile indeed.

Food prices go up because of random weather events (or locus or disease). USA beef prices are skyrocketing because of some new disease for example.

Anyone who says that a monthly food price change is an underlying indicator of overall inflation is simply lying to you.

flanked-evergl2• 11 months ago

Food prices in Norway are going up because the government keeps importing people who do not want to work, and then they give those people our tax money so that they can compete with us in the labour and food markets, which are heavily restricted. It has 0 things to do with the weather or some disease.

The main change is that the central bank dropped interest rates while inflation was already way above target (about twice the target inflation rate), and they did that to help the socialist party in govenment win the election, the problem is that dropping interest rates while inflation is already high and then while you still import more tax leeches results in a massive spike in inflation.

apt-apt-apt-apt• 11 months ago

Four what, cats, pesos or quesos?

neuroelectron• 11 months ago

Whatever the problem is, it's everything but unicorn funding. We can be sure of that on this forum.

Buttons840• 11 months ago

When I was about 20 I started listening to Sean Hannity, and while I no longer agree with anything he says, I do appreciate the glimpse I got into his way of thinking. I mention this because...

I can't tell you how many times I've heard the idea that success in free market capitalism comes from offering goods and services to customers with the right balance between quality and price, and that good quality and price is assured because of competition in the market.

But now I see that the true path to success is to first gain favor from those who already have wealth and power, and then use their wealth and power to reduce or eliminate competition.

jjice• 11 months ago

I see what you mean, but I believe that's more so directed towards the massive scale businesses. Companies that get measured in billions and not millions.

At a smaller scale (the majority of business, but maybe not the majority of revenue), that existing wealth and power is often much smaller and eliminating competition is much less feasible.

Like a local coffee shop, for example. Or a small industry specific software company.

Maybe they matter less in the grand scheme, but they're still a big part of things.

But I do agree with the idea that VC subsidized services to then grip the market and wring them later seem counter productive to a "free market".

whimsicalism4• 11 months ago

If you can see why the former narrative is inherently appealing to the rich, you should also be able to see why

But now I see that the true path to success is to first gain favor from those who already have wealth and power, and then use their wealth and power to reduce or eliminate competition.

is attractive to the disaffected (as Nietzsche wrote on). narratives that say the whole thing is rigged are going to be appealing because they offer a non-intrinsic explanation for underperformance.

tomrod2• 11 months ago

The government is the one entity with a monopoly on violence. Concerns of regulatory capture, pork, and rent-seeking stem from this one fact.

Yes, you can certainly get wealthy by being corrupt in legal ways.

tim3333• 11 months ago

I can think of a lot of people who have got on by gaining favour of those who have wealth and power, the Altmans, Musks etc have done some of that. I'm not sure about the wealth and power to eliminate competition though. Tesla, OpenAI etc have competition but mostly out execute it. Or did in the Tesla case.

duxup2• 11 months ago

Perhaps I'm misunderstanding the comments, but I find the comments here to be fairly disconnected from the rah rah VC world. Plenty of criticism about those systems around here, and perhaps more pointed and accurate than other places.

The domain name here isn't really driving the comments or content that I can tell.

almog• 11 months ago

You can read the actual BLS PPI release here: https://www.bls.gov/news.release/pdf/ppi.pdf

Another thing to watch for is the BLS import prices which show prices excluding tariffs. If these remain flat for July as they did for June, it would be another data point suggesting tariffs induced inflation.

SV_BubbleTime5• 11 months ago

I’m always shocked at how many economics experts there are on a tech forum!

monkeyelite4• 11 months ago

This one isn’t surprising at all though. It’s a technical subject with everyday relevance and lots of material to learn about it.

Unless you’re implying special credentials should be required to comment.

amanaplanacanal6• 11 months ago

Yeah this stuff is not expert-only level economics, this is pretty basic.

fragmede2• 11 months ago

Is anti-intellectualism really the look you're going for?

SV_BubbleTime5• 11 months ago

That’s funny, I’m looking for intellectual honesty. And honestly admitting no one here really has any fucking clue about global trade, economic effects, and policy would be a good start.

Nah.. “I’m an intellectual, I read tech blogs and listen to NPR… I’ve never made anything outside of a computer program, but listen to my opinion on tariffs that happens to align with all my media sources!”

dcchambers• 11 months ago

It's been clear for years that the actual the majority of people are experiencing is well above the reported numbers.

steveBK1233• 11 months ago

So if you tax imported raw materials, intermediary goods, and other inputs, then producer prices go up... who would have known!

altairprime3• 11 months ago

Not necessarily!

If you implement a tiered tax credit on gross regenue earned for wages paid, that decreases exponentially from the lowest-paid worker percentile to the highest, then producers could offset the tax on imported materials by paying an increased share of the revenue to their lowest-paid workers rather than raising prices. The government wins because household buying power and taxes paid increase, the household wins because buying power increases are decoupled from price increases, and shareholders win because wage increases shift the domestic demand outward (rightward), compensating for downward shift along the demand curve from price increases.

Setting the refund rate to (the target inflation rate minus the current inflation rate) times a constant defined by the Fed alongside the reserve rate also provides the Fed a long-term lever of financial incentive: for firms to increase wages paid rather than profits paid, when the Fed raises the constant to combat price inflation, and to increase profits paid rather than wages paid when the Fed lowers the constant to combat price stagnation. It also offers a control against layoffs for profit by specifying such that reduction in workforce in each percentile reduces the target inflation rate in the above equation; a layoff of the entire lowest-paid percentile to avoid lowering prices would result in a significant tax penalty charged at the next higher percentile’s rates, unless prices were so stagnant (or decreasing!) that the Fed’s target had been adjusted to allow it.

That this isn’t coded into today’s U.S. monetary policy is certainly true; but it merely requires an act of Congress to resolve. It’s important not to take for granted that what we’re used to is therefore what must be.

owebmaster2• 11 months ago

that's not even close to what the government did. Less taxes for the rich and more for the workers won't help inflation

RandomUser4976• 11 months ago

Wholesale prices for fresh and dry vegetables rose a whopping 38.9% month over month. Source: 5th row in the following table. https://www.bls.gov/news.release/ppi.t02.htm

alpha_trion• 11 months ago

And still this administration is pushing for rate cuts.

US Wholesale Inflation Rises by Most in 3 Years

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