Is the Fed's Inflation Metric Actually Bananas?Jan 25, 2023
According to the Federal Reserve's chart on the cost of bananas, the average cost for all bananas was $0.63 in January 2022, and $0.628 in December 2022. Their claim is that the price of bananas actually went down during 2022.
I can't speak to a lot of things, but I CAN speak to the fact that on January 12, 2022, I bought organic bananas for $0.57/lb, and on January 12, 2023 - exactly 1 year later - they were $0.71/lb - an increase of ~25%. No doubt, this tracks with what many of you have experienced, a lot more closely than the Fed's claim.
There are a few possibilities.
1) The Fed is changing the mix of organic and regular bananas over time, comparing apples to oranges.
2) The sample size I collected is small and reflects this particular supermarket increasing their pricing only.
3) The Fed is outright lying.
4) The price of bananas went up 25% in 1 month from December 2022 to January 2023, even though the same supermarket was charging about $0.69/lb in December (this didn't happen).
Here's the problem - if we look at the supermarket pricing as the only actual real measure - the Fed, in this particular case, seems to have even gotten the DIRECTION prices are moving wrong. They are not stupid people. It seems likely that sample size I collected is not representative - or they are straight up lying about the prices.
What do you think?
Learn how to protect your wealth and continue your business no matter how severe the inflation gets
Join our FREE mailing list to receive reports and blog post updates!
Don't worry, your information WILL NOT be shared.
We hate SPAM. We will never sell your information, for any reason.