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jimmy17 t1_jeez4du wrote

Reply to comment by xdzgor in Eurozone inflation falls sharply as energy prices drop by misana123

Yes. Because inflation is a measure of the rate of change of prices.

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xdzgor t1_jef93il wrote

In February inflation was 15%. In March it was 15.4%.
Is that a fall then?

−17

LadyLazaev t1_jefeoxy wrote

In inflation rates? Yes. If the prices are 15% higher than the same time the previous year, then that indicates an inflation of about 1.25% per month on average, but the inflation between February and March was only 0.4% which is clearly a drop.

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xdzgor t1_jeftk6u wrote

True, it could even have looked like this:

​

Feb $1000
Mar $1000
Apr $1000
May $1000
Jun $1000
Jul $1000
Aug $1150
Sep $1150
Oct $1150
Nov $1150
Dec $1150
Jan $1150
Feb $1150
Mar $1154

15% increase between July and August, but otherwise mostly 0% monthly increases, and then ~0.35% increase between Feb2023-Mar2023

weird

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xdzgor t1_jefzh50 wrote

Haha, here's another example which satisfies the supplied percentages and dates. It shows a 15% inflation Feb2022-Feb2023 and a 15.4% inflation Mar2022-Mar2023.

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Feb $1000
Mar $5000
Apr $5000
May $5000
Jun $5000
Jul $5000
Aug $5000
Sep $5000
Oct $5000
Nov $5000
Dec $5000
Jan $5000
Feb $1150
Mar $5770
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PlayasBum t1_jefobh9 wrote

If you go 0 to 60 in 3 seconds and then 60 to 70 in 3 seconds, your acceleration has decreased in the last 3 seconds, even though you went faster. It’s the same thing.

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ArgumentWide7165 t1_jefv1yz wrote

Perfect explanation.

It’s not a deflationary period, just less inflation. We probably won’t see a deflationary period so now is the time to ask for a raise.

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xdzgor t1_jeg1pny wrote

Don't quite get the analogy.

For example

Feb 2022 price = $1000

Mar 2022 price = $5000

Feb 2023 price = $1150

Mar 2023 price = $5770

This shows a 15% increase Feb 2022 - Feb 2023

and 15.4% increase Mar 2022 - Mar 2023.

​

Do the numbers show a fall in inflation?

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PlayasBum t1_jeg8653 wrote

Your numbers are inherently flawed. Not sure if it’s because of you’re lack of understanding or intentional. You cant have 1xxx in February and have 5xxxx in March.

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xdzgor t1_jeg99a4 wrote

They're just examples - there were no actual numbers in the article, only dates and percentage increases

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PlayasBum t1_jegbcku wrote

In your example you have 500% inflation from F22 - M22. Then 4xx% deflation M22 to F23. Then almost 500% inflation again. Although they technically fit the headline, the narrative won’t be the same, as you likely have currency instability. More accurate numbers would be

Feb 2022 = $100 Mar 2022 = $100 Feb 2023 = $115 Mar 2023 = $115.4

What they’re not showing, is January numbers, which hypothetically could look like

Jan 2022 = $100 Jan 2023 = $110

Adding that, you can see the rate of change YoY being 10%, 15%, 15.4%.

Not sure if that helps you visualize it better.

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Kevonz t1_jef9h0t wrote

yes, if you don't just look at the food inflation like you are.

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TOOT1808 t1_jefjisj wrote

So the main cost for most people?

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Kevonz t1_jefl1ki wrote

Yes, the main cost, not all the cost.

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YoYoMoMa t1_jefuvk5 wrote

The reason certain things are not included in inflation (or are weighted) is because they are often things that vary in price outside of actual inflation, so they do not give a good view of if inflation is actually happening. Food and gas and housing often go in strange directions price wise for many reasons other than inflation.

Inflation is not trying to measure how much people have to spend to live. There are other measures for that.

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Professional-Web8436 t1_jefxs33 wrote

Main cost? Most of my money is spent on rent. Or retirement. Or gas. Or my car (fuel,repairs,etc.).

Food isn't even my top3.

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xdzgor t1_jeg4nkk wrote

I guess that sort of thing is very individual. My house payments have not changed at all. Food and natural-gas prices have skyrocketed, and I drive so little that petrol increases hardly affect me.

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