Why do all the "experts" claim that inflation is low?

Question

How is inflation low when I am paying more for food, gas, building materials and everything else while my salary has remained the same? My dollar buys me less and prices continue to rise.

Answer 1

Well there are tow classes of measures. Headline inflation and core inflation. Headline inflation has been a bit higher, because it includes food and energy. Core inlfationd oes not include food and energy, because these two things tend to be very volatile so the core measurment is supposed to give a better sence of long term underlying inflation.

Usually policy makers use core as the gauge, so in relatily, the last few years have seen higher end user inflation.

However, inflation is not as bad as it seems. Yes food and energy have skyrocketed, largely because of booming global demand. This is the ifrts time since WWII that every global region has been booming. (There is also the stupid ethonal mandates that have doubled the price of corn which then causes most foods to go up because corn is an imput to livestock, dairly, oils and sweeteners. Also farmers are plowing up other crops to grow corn. But thats another issue).

But other things that we arent all worked up about right now, so we really arent paying attention, have come down in price. Clothing and consumer electronics for example have come down a lot in recent years, and cars have seen lower inflation too. So the average isnt that bad.

Also, you cant equate that just because something has a higher price tag now, that it is more expensive. It is possibel that the quality has gone up and you are getting more. For insatnce, part of the increase in price for healthcare is becasue it is better. You cant compare health insurance cost today with that of 1970. Todays healthcare is much better. Its like trying to say that if a Ford Explorer costs more then a Model T, then it must be inflation.

Answer 2

Inflation is a change in price level. Low inflation is a relatively small change in price level. So if inflation is low, say, 2%, you still pay more for your food.

Note also that the core inflation excludes fuel and housing...

Answer 3

The government lies about inflation.

Answer 4

they are liars. they don't count food or energy in the inflation index. it's a shell game to keep consumer confidence high.