Paul Krugman: Blame bad-news bias for inflation sentiment

[Yo_Mama_Been_Loggin]

By normal standards, the U.S. economy continues to look very good. Unemployment has now been below 4% for 27 months, and inflation remains fairly low, albeit somewhat higher than the Federal Reserve’s target of 2%. But if you say that, you get a lot of pushback; some get angry.

Much of that pushback is partisan. Donald Trump described Friday’s jobs report, in which the unemployment rate rose — wait for it! — to 3.87% from 3.83%, as “horrible,” and I’m sure that many Americans believed him.

But it’s not all partisan. Some of the pushback comes from readers who are, if anything, to the left, and say something like this: “Well, maybe the economy is strong, but all the gains have gone to people at the top.” Or “official inflation may be low, but prices of essentials like food and energy have hugely outpaced wage gains.”

So I thought it might be worth putting together some data to show that these assertions aren’t actually true — and describing some new research that may help explain why many people think they’re true.

Let’s start with the claim that recent growth has benefited only the affluent. Not many people seem to know this, but the truth has been nearly the opposite. Since the pandemic, wages for lower-paid workers have risen substantially faster than wages for the highly paid, a phenomenon David Autor, Arindrajit Dube and Annie McGrew call “The Unexpected Compression.”

https://www.heraldnet.com/opinion/paul-krugman-blame-bad-news-bias-for-inflation-sentiment/

[Pisces]

1. People blame their lack of money due to groceries and rent. People in ivory towers can not understand

The large population that live pay check to pay check who have to decide on medicine or food??

I don’t understand why we are dying on a hill about bad inflation news when people can’t make ends meet. The food is still outrageous, and rent is also high. These are 2 things everyone has to spend money on. Who cares if other goods have come down. The 2 things that impact everyone has not,

Get a clue!!!!! Quit writing that people are swayed by bad news inflation. Nooo people are swayed by hunger and no money!!!!!!!

[dpibel]

3. Didn't read it, eh?

Or you just know better than that schmuck Krugman?

[unblock]

2. I feel like a big portion of the inflation perception is the fast food decision to go for

Bigger profit margin and fewer customers. This not the usual inflation in the sense of passing on higher costs (well maybe a portion of it is) and "greedflation" is not a helpful term (because businesses are always greedy).

It's a specific decision to serve fewer customers at a higher price point. And they could do this profitably *because* their customers are better off than they used to be and enough can (begrudgingly) afford the higher prices to more than offset the loss of customers who can't. But of course, there's not much difference if you're someone paying more for the same crappy meal, or saying forget it because it's too much

Gas prices and fast food prices are more people more frequently more consistently and more obviously than many of other components of inflation measures.