Inflation? What inflation?

[TexasHusker]

As the Fed continues to do everything in its power to keep interest rates low, it simultaneously continues to deny that there is any inflation created by doing so.

https://www.forbes.com/sites/sarahha...h=5d3958406f10


I wonder if the Fed Chairman has looked at, say, lumber futures, traded on the Chicago Mercantile Exchange, of late? What about you? Are you also not seeing any signs of inflation where you live?

[disneysteve]

Measurement of inflation has always been a troubled thing. There are various indexes that exist and they don't all measure the same thing or in the same way. The Fed used to use the Consumer Price Index (CPI) but about 20 years go switched to the Personal Consumption Expenditures index (PCE). But SS still uses the CPI for the annual benefits adjustment, while many say they should use the CPI-E which looks at costs more relevant to the elderly population. And there are a slew of other ways to measure inflation.

I'm not sure why you chose to point out lumber futures. I'm assuming that affects new home prices if building materials are more costly but it probably doesn't really impact the average person. More important measures are groceries, fuel/transportation, utilities, healthcare, clothing, etc.

Have I seen price increases? Sure. I know grocery prices are up, a lot of which is related to COVID and supply chain interruptions. Gas has been up recently especially due to the bad winter conditions in Texas and elsewhere impacting supply. Overall, we haven't personally seen any significant change in our day to day spending. In fact, so far year to date our spending is even lower than it was in 2020, and that was a lot lower than 2019 due to COVID.

[Fishindude77]

Definitely inflation looming.
Gas prices are up, would not be surprised if we see $4.00 per gallon around July 4th.
All building materials are way up.
Groceries are up.

The only way to avoid or slow serious inflation is to get the economy cranked back up.

[TexasHusker]

[rennigade]

Lumber is up because no one traveled in 2020. Everyone did home projects. You'll hear from mainstream that dimensional lumber is through the roof because of the initial covid shut down of lumber yards. Demand grew and production couldnt keep up, blah blah. It was nothing more than an opportunity to screw everyone who is now choosing to do home renovations or build new homes.

Inground pools also skyrocketed in price. Did any of those basic items to construct a pool go up in price? Liners, concrete, stone, pvc, rebar....thats the majority of most inground pools. Around where we are, theres a waiting list now to get a pool...almost 1.5 years out. No one is traveling. People are going to find ways to spend their money. Pools was one of them. Again, that industry figured they can upcharge as much as they want since people are going to pay up.

[corn18]

Right now, inflation is highly secular. By any academic measure, we should be experiencing broad inflation, but we're not. While the Treasury is printing money like crazy, the Fed is buying it all and keeping it on their balance sheet. It's not finding its way into the GDP. So equities are highly inflated. And some commodities are highly inflated. But the CPI is not. The only reason I can find is the consumer is saving right now, not spending. This shows up in record high $2T personal savings. I think once the COVID restrictions are all lifted, the flood gates will open, and we should see CPI inflation. But experts have been saying that for 10 years now.

[myrdale]

I paid $108k for my house in 2006. Houses around me are now selling for $175k.

I've heard a lot of people discuss lumber pricing, but I don't know if this is because of COVID, new construction, or what.

I recently purchased a new truck. Despite being well within my budget, my stomach still turned a little bit at what I paid. And I think I was pretty conservative. What others are paying is just stupid.

Subway / takeout gets ever more expensive.

Gas is good for the moment, but it is going up.

Milk / eggs / groceries I've never paid much attention to.

Where my cable internet bill was $42 in 2005, it's now pushing $75 a month.

Coke prices are stupid. Nearly $2 for a 20 oz.

And just wait until they pass $15/hr minimum wage. If you think increasing the minimum wage = a promotion, just wait till that $1 cheeseburger at McDonald's is $2.50.

[Jluke]

Dunkin’ just raised their prices a few cents.

lumber affected my basement project. I was quoted in July but work was to begin in the fall. Contractor delayed to December when prices fell a little bit after spiking in the fall.

[LivingAlmostLarge]

I don't know but I see inflation in price of groceries. I don't drive enough but probably.

[corn18]

TexasHusker Have your rents been going up? I can tell you from my experience mid last year that rents for SFH in the Cincinnati area were ridiculous. Just nothing available and what was available is expensive. I would think that your type of rentals would be hot. As a matter of fact, can you PM me your contact info? My wife and I would love to make a jaunt down that way this spring.

[bjl584]

I'm seeing a lot of price increases on consumer goods.
Gas, diesel, lumber and building materials.

I work in warehousing and logistics
At least some of the increases are due to extreme port traffic and backups with moving freight
I'm not sure how much is due to pure inflation
Logistic chains are predicted to normalize around May or June, so we will see.

I am also seeing crazy increases in housing costs.
No supply and super low rates are causing houses to be snapped up almost instantly.
According to Zillow the value of my home has increased in value by $13,000 in the past two months
That is obviously artificial and probably not sustainable

[TexasHusker]

TexasHusker Have your rents been going up? I can tell you from my experience mid last year that rents for SFH in the Cincinnati area were ridiculous. Just nothing available and what was available is expensive. I would think that your type of rentals would be hot. As a matter of fact, can you PM me your contact info? My wife and I would love to make a jaunt down that way this spring.

Rents are climbing, but values are skyrocketing. In late 2018 about 27 months ago, I completed the construction of a cabin in Gatlinburg TN for around $300K. It appraised for slightly less than that amount after I was done. I just had it re-appraised in December 2020, it it came back at $520K, though it would probably easily sell right now for the high $600s. So it supposedly appreciated 70 percent in 2 years' time, and quite possibly 120-130 percent. That doesn't happen unless there is big-time inflation.

There is rapid inflation in automobile prices, too. In the spring of 2018, I purchased my son a 2016 Toyota 4Runner with 60K miles on it for $28,500. We are currently looking for a 4Runner for my daughter. I went to the local Toyota dealership two weeks ago to inquire about a one or two year old 4Runner. He told me "I hate to tell you this, but you wouldn't even be able to buy your son's 4Runner for $28,500." My independent market research confirms this.

My wife tells me that beef and groceries have climbed here significantly.

So at least in my world, I am seeing inflation. Thankfully, I am the beneficiary of some of it.

[bjl584]

Rents are climbing, but values are skyrocketing. In late 2018 about 27 months ago, I completed the construction of a cabin in Gatlinburg TN for around $300K. It appraised for slightly less than that amount after I was done. I just had it re-appraised in December 2020, it it came back at $520K, though it would probably easily sell right now for the high $600s.

corn - if you want to go to Gatlinburg, then stay in the cabin above that Texas is referring to. It is sweet.

[TexasHusker]

Wife reported that 90/10 hamburger meat is now $6.99 a pound. About 2 bucks a pound higher than a year ago, the best she can recall.

[LivingAlmostLarge]

Milk and butter and cream are noticeable more expensive but maybe I'm wrong. I didn't track last year just my feeling of remembering