With editing power comes responsibility

Long-time reader Chris P. sent me to this regrettable tweet by someone who works for the Department of Labor, which collects the nation's economic data.

It features a list of items for which prices have declined year-over-year. The title is a true lie. Sure, the prices of the featured items decreased but the prices of many other items increased. This issue of cherry-picking is covered by economist Justin Wolfers (link), and I won't belabor it here.

We now have two successive administrations that are fighting dramatic consumer price inflation by telling citizens their eyes are lying. When a matcha latte at a restaurant in a university town costs $13 (link), and when the Italian restaurant (no Michelin star) I'm going to tonight charges $38 for spaghetti alla chitarra, it's hard to not to notice! (For those who don't live in the U.S., those are list prices; add a minimum of 25% for taxes and tips.)

Rapidly increasing prices is not a common thing in the U.S. It's only natural that consumers compare current prices to what have been regarded as "normal" prices back in the days. Therefore, using year-over-year prices feels wrong; prices were already elevated last year.

I went back and took a look at egg prices (per dozen eggs) over a longer time period (The data is found here).

For eggs alone, it is true that the average price has fallen sharply from last year. But at current prices, Americans are still paying 40% more for eggs than five year ago. Egg prices have generally been under $2 stretching back decades, and therefore, we still feel like they're higher than expected.

(I'm not sure why the data from FRED do not match the data published in the press release cited by Wolfers and used in the DOL tweet. The FRED data shows a 50% drop in the last year, more than the 40% drop cited by those two sources.)

My chart was strongly edited. Here is the first draft:

A lot of editing is substraction.

To address the question of historical comparisons, the chart doesn't need to show every year of data. That helps clean up the spaghetti mess. Fewer colors are required, making it easier for the reader to find the line. In addition, lines can now be individually labeled, and the legend eliminated, because we have fewer of them.

Both my chart and the DOL chart went through editing; both editors subtracted. So, substraction itself is not the source of trouble. With power comes responsibility.