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Comment by Someone1234

5 days ago

> US real median household income has been steadily rising[1] for the last 40+ years.

Compare it to the Consumer Price Index:

https://fred.stlouisfed.org/series/CUUR0000SA0R

REAL income is adjusted for inflation. If real median income is increasing then it is outpacing inflation by definition.

  • Why is it that the cynics and doomers always have such a poor grasp of the data?

    • Because the basket of goods for inflation doesn't separate optional from mandatory consumption.

      If housing, healthcare and education are outpacing the topline inflation number, a lot of marginal families will be squeezed. The cheap LG TV doesn't really make up for it.

      6 replies →

    • I think once you have a good command of data and broader trends its harder to be cynical or a doomer. You just see that things aren't perfect but are larger better than the past on most metrics.

      9 replies →

I think CPI is a poor measure, because it's a moving meter stick that understates inflation. When beef is overpriced, hamburger switches into the basket. When hamburger is a luxury, then chicken swaps into it instead. It understates inflation.

M2 change is a much better measure in my opinion. Using M2 is literally comparing supply of item to supply of cash which could immediately buy it. When scaling SPX or GC1! by M2SL[0]/M2SL, you get a surprisingly flat time series over decades, which reads to me that the effects of the change in M2 are being filtered out of an otherwise exponential price curve.