USD Purchasing Power in Real Time Since 2000(onedollar.today) |
USD Purchasing Power in Real Time Since 2000(onedollar.today) |
It's debatable whether this is good longterm policy - but it's been the norm in the US for decades.
I don't know how that speed was determined. Either it's using a linear decrease since 2000 (which isn't correct, the inverse of exponential inflation would be logarithmic decay, not linear), or it's weighting by recency for the high inflation since 2020 (which may continue, or may not.)
It won't be 100% accurate, but it's close enough to create a visual. And the number is always updated monthly with real data anyways.
We aim for "inflation of 2 percent over the longer run, as measured by the annual change in the price index for personal consumption expenditures" [1].
How closely does that track with CPI-U, which is the index this web site is using? If I believe Gemini, PCE should show a slightly lower inflation number?
That’s it. There’s no further intention behind this, I just thought a real time “decay” visualization would be neat.
Literally everything about how this works is in the source in maybe 30 lines of js. It’s not complicated. Data is from BLS (whether or not that's accurate is another conversation entirely). I auto update the data monthly via a chron job, right around the time new data is published.
I’m not really changing this from where it’s at. It’s done as is. There are other sources out there already if you want to customize the date range or see a graph.
Thanks for checking it out :).
Nowadays if you're properly rich you can buy a seat on a sub-orbital flight. This wasn't an option in '00, no matter how rich you were.
On the other end of the scale, for basic things a (really) good quality loaf of bread will always be cheaper in Poland than say up north from Oslo, Norway; whereas a USA-designed made-in-China laptop pretty much never did scale with the rest of the "CPI basket"...
Point being: we sure do have numbers - what they really mean in practice is vague at best.
https://www.jpmorgan.com/insights/global-research/currencies... | https://spectator.com/article/the-us-currency-is-under-attac...
The real hack was asking them to put Big Mac sauce on the McDouble. For $.30 it was pretty damn close at 1/3 the price.
And you're right, the food has gotten worse as well.
In the year 2000, there were just less products and services then there are now. And the products that did exist were generally more durable and repairable than today. And in many cases, products that exist now but didn’t back then have reasonable substitutes (like renting or buying movies, since you don’t have Netflix).
I would even take it one step further and say that the ways you had to interact with those substitutes were healthier and more social than what we have now.
In my mind those level of interest usually come from the stock market or house appreciation, but I guess those are much faster (I seem to recall doubling every 8 years in the stock market and housing being a bit slower).
Something feels like it'll give out, but I've felt that way for 8 years at this point and I haven't been correct.
DCA and pray I suppose.
edit: a word
It's a bit more than I expected but a 2% drop 26 times gets pretty close to halving.
The number on the page suggests 2.5% average inflation.
Don’t keep your retirement savings all in cash.
A change of one hundred millionth of a percent is not enough to consider even if I have 10 million dollars.
How is this calculated? It's a rate based on historical purchasing power parity index trends, or it's tied to live market data?
Do you mean that we’ll have high inflation because we’ll keep running massive deficits? Because many countries that don’t have the reserve currency also have low inflation.
This is far from clear.
And thus manufacturing will return to the US! I thought we wanted that. It's the only way out of the Triffin dilemma.
[1] - https://news.gallup.com/poll/266807/percentage-americans-own...
Real wages are up since 2000 [1]. (Even the federal minimum wage went up 40% in nominal terms [2], though that is less than inflation.)
[1] https://fred.stlouisfed.org/series/LES1252881600Q
[2] https://en.wikipedia.org/wiki/Fair_Minimum_Wage_Act_of_2007
Cash is also capital.
If you were trying to say it’s a problem that our economic system favors deploying capital into investments instead of hoarding cash, I disagree. An economy where everyone is incentivized to hoarde cash instead of deploying it to investments doesn’t progress because the smartest thing you could do with your money is to not invest it in new businesses or buildings. It doesn’t work.
> Most people are paid in dollars, not shares of the S&P 500.
You’re conflating income and savings.
It wouldn’t matter if you got paid in dollars or in S&P 500 shares of the same dollar value. You can exchange one for the other. In the year 2026 you can do that instantly from your phone with an app and not pay any fees.
The point was not that S&P 500 shares are a superior unit of trade, because they’re not. I’m trying to explain that long term savings needs to be in an investment, not sitting around in actual cash.
On April 7 2000 a 30-year Treasury 5.71%. It would be worth $1,063 today and have paid out $1,484.60 in coupons to date. Even if you held those coupons in cash, you'd still have 2.5x'd your money.
Modern currencies split their medium-of-currency and store-of-value functions. The plain dollar is for transacting. Cash and cash equivalents are for transporting value across time.
It's funny you say this and also this:
>You’re conflating income and savings.
You're doing the same thing.
The problem I was hitting on is that large portions of our population don't have any investments are therefore are being left further behind by this tradeoff of stocks in favor of cash. You can't just tell people not to leave their cash sitting around when they don't actually have any cash sitting around.
... Yes, but that's like exemplifying the value of an actual slice of bread vs bitcoin to someone who is hungry.
Macroeconomic numbers may have an impact on the local - as in the individual scale - but that's neither the topic nor the thread.
Paying for convenience does make sense if you value the convenience.
So why don't Japan and Germany have high inflation, since those country's currencies aren't the reserve currency either?
Japan may implode if the US dollar collapses, due to the weird USD<->Yen cyclical debt scheme (yen carry trade) propping them up. If the world switches to the Yen to price oil this might not be so bad. They also just started moving away from negative interest rates and ZIRP, and BoJ may reach 1% interest at the end of this month. This is good for Japan, bad for US.
Germany is not doing great but they do/did have a strong manufacturing sector.
That would make imports more expensive and exports more competitive. Some pain, given we run a deficit [1]. But $50bn/month adustment in a $30tn economy is 2%. Not fun. But not a "crash."
(There is a genuine argument to be made that American voters have been rejecting dollar hegemony across multiple elections for a couple of decades.)
[1] https://www.bea.gov/data/intl-trade-investment/international...
Probably not. Equatorial Guinea, Palau and Kyrgyzstan run the largest current-account deficits as fractions of GDP [1]. (Current account counts goods and services.)
[1] https://en.wikipedia.org/wiki/List_of_countries_by_current_a...
Edit: Palau is the exception, it's main industry is tourism. Wealthy westerners come and consume and leave. Palau doesn't produce anything so all that consumption must be imported.
US current accounts deficit ~1 trillion annually, greater than your counterexamples' total combined economies. This should be a clue it's not the same mechanism of action.
I also don't see why you're citing the nominal federal minimum wage. The nominal value is totally irrelevant to the conversation. $1 is still nominally $1, but according to the link it is also now $0.51 in purchasing power.
Yes.
> You chose a number that specifically factored out the negatives like dropping participation rate[1] and underemployment
I chose a consistent dataset. One of many. (Dropping participation rate is affected by stuff like demographics in addition to underemployment.)
If you have a credible source that shows declining real wages since 2000, I'd love to see it.
> don't see why you're citing the nominal federal minimum wage. The nominal value is totally irrelevant to the conversation. $1 is still nominally $1, but according to the link it is also now $0.51 in purchasing power
If $1 is 51¢ today, then $1.40 is 71¢ today. Rising nominal wages is how real wage gains are generated.
My original comment was about growing inequality and my second comment was describing why the metric you cited and median real wages in general don't address that issue. So no, I will not be looking for a better real wages metric, because it is not the appropriate measure to capture inequality. You can find plenty of numbers and charts on that problem here[1].
[1] - https://en.wikipedia.org/wiki/Income_inequality_in_the_Unite...
Almost all BLS price indices, including CPI, include housing. (CPI measures the “rent of primary residence, owners' equivalent rent, utilities, bedroom furniture” [1].)
That said, this is the second time I've come across this myth on HN in less than a week. Where did you hear that price indices don't track healthcare and housing costs?
[1] https://www.bls.gov/opub/hom/cpi/concepts.htm#the-cpi-as-a-c...
EDIT: saying real wages is deflated is ambiguous, the headline CPI understates the effective inflation experienced by people whose spending consumption is weighted towards housing and healthcare. So the "real wage" is inflated relative to the lived experience of those people.
Got it, your complaints about real wages were entirely a non sequitur.
If you spend a third of your income on housing and 8% on healthcare [1], then those components–assuming your 5x and 7.7x multiples–will raise your cost of living by 2.25x. That leaves 1.75x for the other components (to get to the overall 3x). That sounds reasonable as a median estimate.
> if personal spending is weighted towards healthcare and housing (anyone who rents or pays a mortgage below a certain income) then your purchasing power is declining faster than the real wage would suggest
Sure. If you spend a lot on imported dates, your purchasing power will currently be declining faster than the median American's. This is a problem. But it's almost by definition not one that can be widespread.
> the "real wage" is inflated relative to the lived experience of those people
Well, yes. There are regional CPIs and income-indexed CPIs and all manners of privately-calculated costs of living. Paying attention to lived experiences or whatever is important, especially in politics. But it's no substitute for broad measures when conducting a national economy.
[2] https://www.bls.gov/opub/btn/volume-9/how-have-healthcare-ex...
Great. So we agree, you are just dismissing the distributional analysis and equating fungible goods with inelastic ones. You can't substitute away from something like region-locked housing supply so those folks face higher effective inflation (BLS R-CPI-I).[1]
[1] https://www.minneapolisfed.org/article/2024/lower-income-hig...
No, I'm not. You're the one moving goalposts.
The thread started by someone claiming, wrongly, that housing and healthcare aren't included in CPI. (A common myth.) I showed that was wrong. You said it's underweighted. I pushed back. You're now saying it's underweighted for some people, which, like, is how distributions work.
Variance doesn't make a central tendency meaningless. And the truth is for most Americans, real wages are up. Lived experience and all. It's painfully not for a section of Americans in housing markets locked by policy from expansion or in bad health and luck. That's unfortunate and deserves attention. But it doesn't negate the whole.
> You can't substitute away from something like region-locked housing supply so those folks face higher effective inflation
Straw man. Nobody claimed universality.
If we were having a discussion about the Midwest, I'd quote different numbers and reach a different conclusion. That's how scoping works. Americans, as a whole, have experienced real wage growth since 2000. That doesn't mean literally every single American has. And it doesn't mean that people outside America have.