The Fed actually has a second report they use to gauge inflation, where they do consider consumer behavior as you state. I disagree again, consumers will change behavior based on price. It is very much real world, especially at the lower income brackets.
And I'm telling you it flies in the face of all of the work our group did for the CPG company I worked for. What real world application of this have you done work on? Give me an example of a real world product that consumers will change behavior over.
But you're still arguing that too much money chasing too few goods (apples in this case) causes inflation.
But I am not arguing that the goods crunch was due to stimulus. And that is the key. There is a difference.
Maybe you know better. I don’t know. The prevailing thought is that consumers with less margin will change behavior. Walmart noted this. https://www.cnbc.com/amp/2022/05/18...epot-and-lowes-tell-us-about-the-economy.html
Nor am I. I'm saying the same thing the entire time. Too much money chasing too little goods. I'm arguing the too much money side, you're (it seems) saying that a crunch in goods caused inflation. They both did. But throwing trillions of dollars into the system vs. not doing so was a massive factor. That's all I'm saying. All I have been saying. You seem determined to say this wasn't a factor.
Ok, I asked for an example and that's a pretty good one. Private label vs. branded category. And you may not know this, but Private Label is made by branded companies. For example, private label ketchup or private label soda is made by the same companies making branded ketchup and soda. And because it is made by the same companies (and frankly, even if it weren't) they are subject to the same input inflation. So fuel from transportation, labor costs, raw materials, etc. So while it is true that some - and I want to stress that word - some consumers will switch to PL from branded for some categories, most are locked into their brand choices as they have always been. The vast preponderance of consumers don't shift brands - even the lower economic consumers. They try to cut coupons, they buy on promos (BOGOs and other TPR trade events) but they don't switch. We did tons of research on what it would take for consumers to choose a different baby food. Nope. Never happens. Or a different frozen dinner. Nope. Some items (peanut butter) are more likely to see switches, but that choice is made on who is running a deal when they shop. But because all brands, PL included have been seeing the same inflation - because they've got category managers that tie their prices to branded. So when branded goes up 10%, they do too - so long as they keep their discount to brand. The point is, this doesn't drop overall spending by any measurable amount. Food for the most part is highly inelastic.
Hey, we’re allowed to disagree and sometimes I needle people when shouldn’t. What I will say about the stimulus is that it was needed. It reversed a major downturn and kept high unemployment from becoming sticky. Long term it was the right move IMO. Look at this recovery: If Biden and democrats pay the price because they are perceived as causing inflation then so be it. It’s not fair but has stimulus actions not been taken the outcome would have been disastrous. Sometimes you eat shit for doing the right thing.