I've heard rumors that people are well and truly beaten down by the cost of groceries and just want inflation to Finally. Go. Away. Is this true?
Well I come bearing good news: Food inflation has been gone for a year and a half. Here's what a $100 basket of the four major food groups costs compared to 18 months ago:
A $100 basket of meat costs $100.57 today. A $100 basket of dairy items costs $98.16.
Grocery store inflation is gone. And it's been gone for 18 months. Is everyone happy now?
"Grocery store inflation is gone. And it's been gone for 18 months. Is everyone happy now?"
No. Earlier tonight I bought a loaf of the store brand bread which used to cost $.99 and I was annoyed to see it just went up another $.10 to $1.49.
No. Earlier tonight I bought a loaf of the store brand bread...
You forgot the /s tag.
Or, in the event you're being serious: your anecdotes, unlike statistical information, tell us nothing.
*When* did it cost $.99? Last week or three years ago?
It's a really small loaf.
😉
and a pound of ground beef used to cost 65 cents, once upon a time. if you found someone suddenly awakened from a 50-year slumber, they'd really be annoyed.
In the 1960s my father, an accountant, made a salary of around $10,000 a year, easily enough to support a wife and a family of six children in San Antonio, TX. Salaries have been going up, prices have been going up since the beginning of recorded time.
Prices have been going up for about the last century, thanks to central banking and fiat money. Before that, prices were pretty stable in the long term. However, it wasn't a better world before that, because, in the short term, prices fluctuated wildly, in both directions. The economy was prone to bouts of deflation, producing recessions more severe than anything we've seen since the 1930s. They were frequently worse than the 2008-10 recession, and frequently of longer duration.
Wrong. Inflation was a regular feature of past economies. Sometimes it even got quite of control. The discovery of the New World, with its huge precious metal resources, sent prices soaring everywhere there was a money-based economy. Inflation in Ming China played a role in crashing that dynasty and ushering in the Manchu.
An example of creeping inflation over the long term was the English property qualification for voting. Back in the 14th (or maybe 13th) century, the property qualification was set at a "forty shilling freehold", which is to say you had to own land worth forty shillings to qualify to vote. Despite the fact that was, notionally, two pounds of sterling silver, over the next few hundred years the forty shilling freehold qualification went from limiting the franchise to wealthy commoners to allowing any landowner to vote. By the time the qualification was abandoned, forty shillings would barely buy a doghouse.
But... Tic-Tacs!
To most people, inflation isn't the derivative of the price function but the integral. "Prices are higher than they used to be," they complain, and they're right.
We olds, who remember the 70's and 80's, just shrug, but this is an unfamiliar and unwelcome experience for the youth.
I think this is right. People will be "happy" when these (relatively) stable price levels have held long enough to seem normal to them, whatever that is. And whenever that happens, which for some items, and for people in some age ranges, may be never.
Incidentally, I'm also old enough to remember the 70s and 80s and I do my share of tongue-clucking. But I didn't shop seriously for the really big-ticket items like houses or cars until the 90s and that's when my set point for them developed. Even so, current prices for both seem absurdly high on an intuitive level. But I suspect grocery prices don't work the same way and that people just gradually accommodate to them.
When I bought my current house in 1985 the interest rate was 14.5%. It was like buying a house on a credit card. When I hear people moaning about 6% mortgages I just smile.
We bought our first house in MA in mi-1984 at around 14%. Then the interest rates started dropping and we aggressively refinanced as things went down. The slide was as breathtaking (in a good way) as the run-up to 14%, but more welcome.
This has it exactly right. Most people say “inflation” when they mean “high prices”. Telling them that inflation has leveled off to its “normal” rate will not appease them anymore than telling them that aggregate wages rose along with prices makes them feel better about the raises they “earned” not going as far as they expected they would.
To be generous, I think this may be (at best) half right.
Inflation was a legitimate issue a few years ago, a lot of it driven by supply chain problems. A lot of the voices in media, with memories of high inflation of the '70s, '80s, '90s, worried loudly about "persistent" inflation. Those worries were amplified, in part, for political reasons. Those earlier decades were the wrong model to use for understanding what happened post-pandemic. But the narrative was set.
This time, inflation came down in two years, give or take a few months. It could have been a moment to celebrate the victory over inflation. But it was a well-kept secret instead. Casual references to high inflation "persisted" long after inflation was well under 4%, less than half its peak. The media narrative never acknowledged that our economic situation had changed. People still believed we suffered from high inflation, and on top of it, a recession. This is not just conjecture. We have data on how changes in economic indicators affect consumer behavior and sentiment. Lower inflation and lower unemployment numbers in the past correlated with improving public assessments of how the economy is doing. This time, everything was out of whack.
Instead of media reporting the good economic news, they invented a new reason for why everyone is still miserable. Ergo: high prices!
High prices always exist after bouts of inflation. No one ever should want prices to recover to pre-inflation levels. That would be very bad news indeed. But the media treated high prices as a scourge that needed to be fixed, an expectation that was stupid on its face. Media allowed itself to escape any self-reflection for getting "persistent" inflation wrong, and it kept the focus on bad news, even ignoring the wealth of good news, which was historic. This bias was in part driven by political considerations.
I'm not saying that high prices can't be a problem, and for some people a big problem. But for most, it's a less imposing problem when employment and wage growth is growing as it has. Yet the nearly singular media focus on high prices is a bias of reporting without context.
People who are complaining about high prices as the reason they're miserable may want to consider the alternative: they feel miserable because the media tells them the bad news and never reports the good. A more honest assessment: prices are higher than pre-pandemic but overall the economy today is doing vastly better than it has in decades.
Somehow this survey missed my Costco and my Safeway. (The biggest threat now is the proposed Safeway-Kroger merger.)
I'm happy. But be fair to those who aren't. Since January 2021, food prices have gone up 17%, and that averages to 5% a year. That dislocation hasn't faded away yet.
For a while now I've suspected the outcome of the election more than any other factor likely turns on: how quickly or how slowly the memory of the inflation burst fades.
+1
Not according to Mr. Tic Tac.
But then again, it's a sure bet that he doesn't actually know the price of a Tic Tac.
If you notice he says "someone gave me..." I doubt he's ever bought tic-tacs himself.
Grapes, Apples, Chicken, Milk, Avocados....Have noticeably decreased for me in the last three months. Other groceries have not changed. I agree with J.I.B, memory of inflation and gas prices at time of the election will probably determine the future of the free world.
I don't know... I still see lots of morbidly obese people. Though, I must say, that quite a number of my long time co-workers are slimmed down. This is undoubtedly thanks to those weight loss drugs. What they no longer spend on food, they spend on drugs. Hilarious.
Gross. Stop with the body shaming and ignorance.
Yes--Justin is an absolute ghoul. Casually musing that the poors can't have it too bad foodwise because there are still fat ones is the sort of comment you expect from, like, the Sheriff of Nottingham in a particularly ham-fisted Robin Hood production.
Justin is no Basil Rathbone.
Of course, the most ham-fisted adaptation of Robin Hood let Alan Rickman create his own dialogue, so the Sheriff was the only quality thing about it.
Alan Rickman was often the most/only quality thing in whatever movie he was in.
I wouldn't say that Prince of Thieves was ham-fisted, though--the only real theme that it tried to hit you over the head with was Kevin Costner Is A Star Dammit. And there is so much about it that is either charmingly asinine (where's Robin Hood's accent gone in this scene?) to genuine little gems (Rickman's beleagered Sheriff, Freeman's dignified turn as Azeem, Connery's surprise cameo as King Richard, etc.)
Ah well, maybe someday, somebody will make a good Robin Hood movie.
Yeah, Justin is the text book definition of a troll. Nothing he says is genuine. He'll TELL you it's genuine, but he's lying. Everything he posts is for one purpose and one purpose only, to get a reaction from someone. Don't listen to his lies or excuses and don't react or respond to him. There's nothing to gain.
Some prices have in the covid era gone way up and not come down at all. Check 1/2 and 1/2. $1.59 now $2.75 .or Rolled Oats $1.99 now $2.79 Pre & post pandemic.
Gouging .... I shop at the cheep store...Stop and Shop is way more
Prices aren't going to go back down to 2019 levels, they just aren't/shouldn't increase at a higher percentage going forward.
This. And good lord, nobody should be praying for actually deflation, as that is a real economy-killer. Just imagine if, instead of grousing that things cost slightly more than we think they ought to, millions of people were thinking "Huh--maybe I shouldn't buy this or that thing today, since it will be cheaper in a month than it is today!", and millions more were hoarding cash out of circulation.
I honestly cannot fathom people blaming the Biden administration for inflation. It's freaking obvious that inflation was the result of the pandemic, which was a global century-scale crisis, and since the US outperformed all of our peer nations on the inflation/economic front coming out of that crisis, if anything the admin should be praised for their role in that.
You will NEVER convince the Believers that inflation is "normal" or "gone," because it is Received Truth that Inflation Is Out Of Control Because Joe Biden. That belief is fundamental and unalterable, and any actual evidence or economic logic will be cherry-picked if it confirms that belief or ignored if it doesn't. That is the pre-Enlightenment way of thinking to which most Republicans have decided to revert. Belief is paramount, not least because it shows you are a loyal member of the Tribe, while evidence is to be interpreted according to belief.
This. To which one can add a healthy dose of people being generally innumerate while also generally wishing they could pay lower prices for things, so "it's teh inflation" gives them something to stroke their chin and feel must be to blame for how come they can't by XYZ item for the excellent deal price they hazily remember scoring some years ago.
The American Dream, more or less, is getting to live the good life without having to understand or feel responsible for anything that makes it possible, like how government or the economy work.
when i was a kid, the olds told me that there was once a time when one could pay for a cheeseburger with fries and a drink with a dime and have change enough to tip the carhop who brought it. it was framed as a mournful complaint, as if the age they found themselves in was somehow lonely and cold.
a burger combo at the time was costing around $0.99 on the cheap. the whole dime thing seemed outrageous to me because i didn't understand the notion of inflation. 50 years later a burger combo is more expensive now because of the cumulative effects of inflation, which i now understand, and because of that understanding, the prices of things rarely cause me grief.
edited for spelling and to add-- i came of age during the volcker period in america's economic life and while it might not have been as traumatic as some of the famous "panics" of the 19th century was still traumatic enough. this current patch has been pretty minor in the grand scheme of things.
+1
While there is still certainly some pricing chicanery going on at the big grocery chains, there have also been external factors keeping food and commodity prices high, particularly drought in the US and various other parts of the world and the ongoing war in Ukraine. Olive oil, coffee, cocoa and soybeans have all had rough years. I cook with a lot of olive oil and boy-howdee, is that shit expensive.
I agree with what others have said, namely that when average people say "inflation" they mean "persistently high prices". Most people couldn't explain actual inflation if their lives depended on it, much less understand why the POTUS, of all people, has practically nothing to do with it.
Well, never let the data get in the way of a good narrative. The current two Trump PAC ads being bombarded on my local airwaves are 1. Kamala is a soft on dangerous criminals San Francisco liberal and 2. tying inflation and (gasp) high gas prices to Bidenomics. No pro-Trump ads, mind you, just anti-Kamala attack ads. We'll see if they stick.
Except that when TFG talks about when San Francisco was great, he didn't realize that Gavin Newsom was mayor and Kamala Harris was the DA. Mental deterioration much?
But it hasn't come back down! So the inflation is permanent!
(That's how people see it anyway.)
Unfortunately unable to post a graph here (really, at the charts and graphs blog?) but wages in the US have been increasing above inflation for a while, particularly lower wages. Over three years food prices have gone up about the same as wages. Housing prices no doubt more, but that only matters if you are renting with no rent stabilization or buying a new place.
And again, no thumbs up here, but when reading the comments I usually want to thumbs up almost all of them. Good job, Drumettes.
I want 2019 prices. And I want 2024 wages.
Dean Baker
https://cepr.net/blog/dean-bakers-beat-the-press/
regularly has posts about how media stories distort the general perception of how inflation works. This is in addition to flat-out lies about the actual inflation rate from Trump and other Republicans.
Again, the current perceptions about the economy are not normal. In the past people did recognize when the economy was good, and when inflation came down from the high of 1980 they were not complaining that prices did not come down, they were just relieved that inflation was decreasing. Media headlines were "Inflation Decreases Again", not "Consumers Unhappy That Prices higher Than in 1960".
During any period of time after inflation starts coming down people will always find certain items that did not return to pre-inflation pricing.
But Dean fell into the trap of blaming the press (of which he is part of)
He SHOULD be focusing on greed on the part of those companies who serve two "bosses" - the consumers of their products AND their shareholders. It is becoming apparent that choosing between the two is NOT hard for some companies - they are choosing the shareholders.
The consumers can cut back. The shareholders can really hurt the companies by selling off their shares.
If you think prices are high now, just wait until Trump starts his mass deportations (I of course hope he never gets the chance). The number of farm workers, and slaughterhouse workers, will decline significantly.
That thing you're worried about (prices going up)? It truly does not matter to Kevin Drum, a comfortably retired former software executive who complains about people for a hobby.
Now do gasoline. Here's a chart from Gas Buddy of the average price of regular gasoline in the country over the last 18 month:
https://www.gasbuddy.com/charts
As best I can read this chart, 18 months ago the average price of gas was $3.37. Today it's...drumroll...$3.37.
lumber pricing is right at USD $512 per 1000 board feet. that's the same as it was in late 2020. it rose during COVID and came back down. Both Home Depot and Lowes reported sales this quarter were well below last YOY. Foot traffic is also down.
price of lumber in both is up.
Greed, in the form of protecting profits, is rampant.
I used to work pumping gas, and it only cost $0.399/gallon. Now it's over 5 bucks/gallon. Outrageous!
I blame the Biden Crime Family!