The Inflation Shield?

The Producer Price Index shows that grocery stores appear to be shielding consumers from inflation, not hiking prices to gouge Americans.

The worst bout of inflation in four decades has battered consumers for months, but it has been even worse for businesses. When the Consumer Price Index peaked at 9.1 percent annual growth in June, the Producer Price Index, which shows the change in selling prices received by domestic producers for their output, hit a 48-year high of 22 percent.

Despite what Sen. Elizabeth Warren (D–Mass.) and others have suggested, grocery stores and similar corporations don't appear to be hiking prices to gouge Americans already beset by high inflation. If anything, businesses that buy from producers and sell to consumers seem to be shielding the rest of us.

Comments

[Liberty Lover]

inflation is 22% or more. The government's hand picked basket of goods is not representative. Obama changed the goods to make inflation appear lower than it is during his Administration.There is little to no price gouging going on. Besides Congress spending $5 trillion in printed money, Biden has spent another approximately $4 trillion. That is $9 trillion in less than three years. Throw in Biden's oil polices that raised prices of oil and gas not just here in the US but world wide as we quit exporting and started importing oil. There is no way inflation is around 8%. Remember everything grown, manufactured or transported takes energy, most if it coming from oil. What hasn't went up in price has shrunk in size, shrinkflation!

[Longtobefree]

My favorite part is where they take out food and energy, the two things everyone HAS to buy, and then focus on the lower number.
Why not take out everything, and say inflation is zero?

[Earth-based Human Skeptic]

What about chewing tobacco?

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[BillyG]

I've looked into that. I agree with you food should be included. Energy gets pulled out because it's too volatile. If they included energy, they'd basically be trying to control the price of gasoline and little else. It's just too big a part of the CPI to be useful.

[Earth-based Human Skeptic]

Do you want official inflation numbers as info on the national economy, or as justification for government meddling?

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[Utkonos]

Oh it’s a LOT of zeros!

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[Barnstormer]

**inflation is 22% or more. **

This. And Boehm knows it too, but it doesn't fit the narrative he's paid to promote.

[Mike Laursen]

“When the Consumer Price Index peaked at 9.1 percent annual growth in June, the Producer Price Index, which shows the change in selling prices received by domestic producers for their output, hit a 48-year high of 22 percent.”

That sure doesn’t look like Boehm is trying to suppress anything.

[virowax]

8956

[Homer Thompson]

at the fancy steakhouse by me
NY strip pre covid $50
NY strip today $70

it's still filled all the time and tough to get in

[StackOfCoins]

The middle class in this country lives like kings of old. They have no idea how good they have it. Even a poverty-level fool like me can afford incredible comforts through frugal spending.

The middle class though. They really have it good. Annual weeks-long pilgrimages to Europe are practically expected at that level of compensation. Owning a house? Of course, it's not even a question. Two houses? Why not? Three cars? Cleaning staff? Taking the family out to eat every week?

Such are the riches of the average American. A soft people. A weak people.

[NOYB2]

I'd add to that that middle class Americans are wealthy by European standards, and ridiculously wealthy by world standards.

Even poor Americans are a lot better off than poor Europeans.

And instead of being grateful, Americans endlessly whine and complain.

[NOYB2]

Incidentally, the money supply grew by about 20% each in 2020 and 2021, and that pretty much perfectly tracks the actual inflation.

Prior to 2020, a lot of the increase in money supply was soaked up by "stock price inflation". People don't think of rising stock prices as "inflation" because they erroneously think that it's always a good thing and makes them richer.

[karinoirann]

good

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[Á àß äẞç ãþÇđ âÞ¢Đæ ǎB€Ðëf ảhf]

Wrong take! Shows that grocery stores can absorb the 22% inflation because the have been charging too much before.

[TJJ2000]

And yet somehow charging too much before was far more end-user sustainable than today’s absorption.
There is nothing ‘evil’ about free-market profits.

[Á àß äẞç ãþÇđ âÞ¢Đæ ǎB€Ðëf ảhf]

I was being sarcastic.

[TJJ2000]

You mean the reseller-for-profits actually serves the people to a degree? How can that be; leftard-indoctrination calls it completely unfair and corrupt with no purpose at all but to enrich greedy people.

Huh… Maybe all along it was just ?greedy? people serving the people with something that had unseen value behind it.

And maybe leftard-indoctrination is just a demonization game used to justify unjust armed-theft (conquer and consume). Like how the slaves were demonized into slavery, how the jews were demonized into genocide, etc, etc, etc…. A ploy as old as the hills and the worst stain on human history while even todays participants remain completely ignorant to their deeper motivations.

[Jefferson's Ghost]

"If anything, businesses that buy from producers and sell to consumers seem to be shielding the rest of us"

Mostly due to competition, or, in other words -- a free market.

Many, many, businesses rely on repeat customers for stability and long-term growth. Most businesses will choose to "take it on the chin" in the short term rather than risk losing regular customers by hiking prices.

[Eeyore]

My local grocery store tried raising the price of a pie to $10, but they all just sat there unsold. Maybe they will try again next year after everyone gets used to paying $7.50.

Maybe they can lobby to make consuming pie mandatory to maintain employment? Until then there are 2 parties involved in every trade and they have to agree to the trade.

[Earth-based Human Skeptic]

You know who else was fixated on pie?

[Its_Not_Inevitable]

The Three Stooges?

[Vernon Depner]

John Lennon?

[stainles]

The Chudnovsky brothers?

William Shanks?

Srinivasa Ramanujan?

[Pear Satirical]

Hugh Neutron?

[Utkonos]

The Jeffersons?

[Fetterman's Hump]

Every circle, everywhere?

[EISTAU Gree-Vance]

Cartman?

[Longtobefree]

"Until then there are 2 parties involved in every trade and they have to agree to the trade."

Ever hear of Obamacare?
Do you pay taxes?
Is the DMV in your state open to negotiating the price of a title transfer?

[Earth-based Human Skeptic]

Let's use Bernie-nomics.

1. All profit is immoral.
2. Revenue is the same as profit.
3. Therefore, any business with measurable revenue is evil, and should be nationalized.

[DevonCampos]

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[Utkonos]

If grocers aren’t gouging the public, who’s Warren gonna scold? This narrative needs work.

[SIV]

This has to be one of the dumbest things I've read on Reason.
When inflation is driving prices up the pressure to broadly hold prices down goes away. Grocers make hay when the sun shines and there's a blindingly blazing hot celestial inferno right now. There's still loss leaders and various deals out there but I'm seeing 300 % price increases on stuff the wholesale price is likely only up only 10-25%. Walmart and Kroger are two of the worst "offenders".
Half your cart of groceries rings up higher than the latest price increases marked on the shelves at Walmart and Kroger's digital coupons routinely fail at checkout. The silver lining is chains that give you the item free if it is mispriced but they've begun to burn labor costs dragging it out. I had to attend a "meeting" with the meat department to get the advertised price on a large package.
It wasn't worth my time but it was worth a whole lot less of their's.

[defaultdotxbe]

Interesting that you mention Kroger and Walmart, since they often serve large geographic areas with little to no competition. Where I live there are dozens of grocery stores and I've seen exactly what the article describes: stores seemingly struggling to keep the prices down. Competition works, Store A doesn't want to raise prices sooner or faster than Store B, and Store B doesn't want to go ahead of Store A. Of course when there's only Walmart A and no Store B to speak of, there's nothing to hold them back from aggressively raising prices.

[Brian]

A lot of times, when you look at places “only served by Kroger and Walmart”, when you look at the area, there are alternatives, but no one wants to shop there.

Basically, when they say “there’s no competition!” What they mean is “there’s no competition that’s just as good as them but with lower prices that I want to shop at!” Which isn’t exactly the same thing as “no competition.”

[serebrina]

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