Most households are able to afford more than the essentials and do care about the cost of entertainment.

There's value in the index you described as well, but IMO it doesn't make sense to use it as the basis for the overall economy.

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darth_avocado 3 hours ago | parent | next [-]

> Most households are able to afford more than the essentials and do care about the cost of entertainment.

1/3 of the households make less than $50k. Mean survival budget is $35k-40k. After taxes, if a third of the population can barely meet a survival budget, an index like this needs to be part of the overall economy.

And the point of the ALICE index is exactly to address what you are pointing out. When wages, social security etc. were increasing proportionally to the essential goods, it made sense to have the CPI include other goods and services, allowing policy makers to use it as a basis for policy directions. However, when essentials become expensive faster than non essentials, it creates a problem for policy makers. It explains the “vibeflation” where policy makers were pushing back hard on economic struggles that most people are feeling by pointing to CPI numbers that show a 2-3% inflation, meanwhile people are struggling and dipping into savings to make things work.

We need to have both.

	▲	tracker1 an hour ago \| parent [-]
		Beyond just the monthly/yearly changes are the cumulative affects of those changes and disparities of wage stagnation with record inflation over time. Increased rent/housing costs are also a massive factor. Not even counting the number of households who are at credit card and other debt limits at close to 30% interest. Trump has given some lip service to trying to get this down to 10%, but it'll really take congress to make anything happen that has a chance of sticking. A lot of people are very underwater.

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turtletontine 3 hours ago | parent | prev | next [-]

Thinking about the “overall economy” increasingly means focusing on the spending of the rich, and ignoring the poor and struggling. A consequence of increasing inequality is the rich make up more and more consumer spending. Consumer spending can therefore easily look great while most people are struggling to get by. There really is no “overall economy”, there are many many different stories happening all at once, and focusing on simple metrics lets you easily fool yourself.

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wasabi991011 2 hours ago | parent [-]

> Thinking about the “overall economy” increasingly means focusing on the spending of the rich, and ignoring the poor and struggling. A consequence of increasing inequality is the rich make up more and more consumer spending.

It means increasingly focusing on the spending of the rich, because the population is increasingly richer. Proportion of families making more that 150k (in 2024 dollars) has gone from 5% in 1967 to 33% in 2024, while both middle class (50k-150k) and poor (<50k) have decreased. [1]

[1] https://substackcdn.com/image/fetch/$s_!dtoi!,f_auto,q_auto:...

	▲	turtletontine 2 hours ago \| parent [-]
		Great example. The population as a whole is richer like you say, and also the richest 10% account for half of consumer spending, compared to 36% 30 years ago. [1] So yes, consuming spending has become more of a metric of the wealthy’s spending habits. No single metric tells the whole story, and by taking them in isolation it’s quite easy to lose the forest for the trees. [1] https://www.wsj.com/economy/consumers/us-economy-strength-ri...

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t-3 2 hours ago | parent | prev [-]

It doesn't make a lot of sense to measure the cost of entertainment in terms of monetary inflation though. Hugely price-tiered status-signaling goods like kids toys just don't respond to market forces in the same way commodities do.