The Washington Post reports that consumers are still feeling battered by inflation:
Although inflation has slowly cooled from last summer’s highs, price pressures continue to feel like an uphill battle for consumers, politicians and policymakers alike. Many say recent strides have been too spotty to offer much relief, even as annual price growth has slowed from 9.1 percent to 5 percent.
It's actually better than that. Since June of last year the price level has risen 2.4%. That's a 3.2% annual rate. For the average person, this is indistinguishable from the "normal" rate of 2%.
So why does inflation still seem so troublesome? The answer is simple: that 3.2% figure is a combination of 7.2% for food and 2.6% for everything else. This increase in the supermarket, where shoppers are really paying attention, overwhelms everything else.
Added to that is our preoccupation with whatever individual food happens to be in shortest supply. Right now the big story is eggs, and news outlets are still running stories about the egg crisis even though the price of eggs has fallen for the past two months:
Still, the price of eggs is up by a third over the past year, and that has a bigger impact on most people's perceptions than a blog post telling them that overall inflation has been running at 3.2% for the past nine months.
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Funny though. Eggs are dirt cheap compared to any other protein source. Eggs at tripled prices would still be dirt cheap compared to any other protein source (even Tofu!).
In Europe they cost much more but they are still dirt cheap over there. Plus they are safe for eating raw!
I bought some pasta last night at the supermarket. Up about 60% from pre-pandemic. Looked for the store brand generic alternative -- not available, so went with the 60% price increase. (I like my pasta, and per the discussion of "money has different values to different people" from a few days ago, my time is worth more than the extra $2 or so I spent rather than chasing a cheaper price down.)
My morning yogurt used to be $1.25, routinely on sale for $1. I haven't seen a sale in a while, and it's now routinely $1.44. So, that's up 15% over a couple of years.
Grocery shopping is something I do a couple of times a week, almost every week of the year, so it's the one thing I definitely notice most.
Luckily spring is here, and the ducks have started laying, so there's at least that.
I thought gas prices were the keystone for inflation gut feelings?
Gas prices are down 4.6% from February and down 17.4% from a year ago. Maybe TV crews could start broadcasting from gas stations again and spread the news. Ha.
I hav seen that done (in the Bay Area).
"It's all about food."
I dunno about that.
Here's what today's BLS report says about food: "The food index was unchanged in March." Change from previous month (seasonally adjusted): 0.0%.
Here's what it says about shelter: "The index for shelter was by far the largest contributor to the monthly all items increase." Change from previous month (seasonally adjusted): 0.6%.
If the bigger problem is shelter, and the only remedy at the Fed is interest rates, I have an opinion on which way they should move. I'll let you know what Jerome Powell thinks as soon as he returns my call.
Housing costs are very much a lagging indicator...
Housing is more pricey than food do begin with. At least where I live.
The only things people really notice are gas prices and food.
Gas is super volatile and food has been up a lot. They remember eggs skyrocketing and don't really remember the recent crash in egg prices.
The 5 year and 10 year inflation expectations is around 2.3%.
The way to calculate it is to look at the difference between the TIPS and the regular Treasury.
Food is a bought once a week or more, and it also a necessity. Increasing food cost disproportionality impacts lower income folks because it represents a much larger amount of their available income than wealthier people.
bingo
And people still remember when they could get specials on eggs and milk and bread....not so much now.
The "right" price seems to get locked in during people's twenties...so gas should never be above $2/gallon and eggs cost $1.49/dozen (Jumbo), on sale for $0.99.
I hear that a lot. For some people any increases do make it harder to live, but when most people complain it is really just a modern version of, "Hamburgers used to cost a nickel, by gum. Now it's time to drive the Studebaker down to the old watering hole." And how hard they complain often correlates to whether or not they voted for the current President.
Gas is way up here in Tucson in just the past month. AND every single gas station has the same price and have increased in lockstep. Never seen that before.
Gas has jumped in Illinois too. I thought I heard there was another OPEC production cut, but I wasn't paying close attention. The Saudis really want the entire world to look like Putin's Russia.
Ok, so inflation measures don't even count rent, and now you're saying the reading is actually better than it appears because the main driver is just food costs. So we really have nothing to worry about, people. Those things don't matter! The cost of chairs or hammers or tophats or whatever is pretty much stable!
Kevin is right. I've stopped eating food and haven't experienced inflation in recent weeks.
BTW, I like that he cites either a long-term number or short-term, whichever is smaller, to assuage our concern about the fake inflation news.
The short term number is useful if you are interested in what is happening now instead of what happened 10 or 11 months ago.
Imagine you are on a road trip and wondering whether you are going too fast for the most recent, the current and the upcoming stretch of road.
Then imagine the yahoo in the back screaming that yesterday you covered 600 miles in 7 hours and scolding you for thinking about a more recent speed . Imagine that guy in the backseat making the same argument for the entire road trip. It would be weird, right? How fast you went yesterday is a useful statistic depending on the question at hand. But the guy in back never seems interested in what the question is.
Thats a nice strawman youve created and while it is always easier to attack a strawman of your own creation, you could try addressing what was actually said. But i realize its the internet.
I did address what was actually said. Kevin is saying inflation only "seems" high because of the impact of food, which is an absolute necessity. Discounting food prices and pointing to the cooler prices of less-essential items to say inflation isn't that bad is absurd.
And his opinions on inflation are even more ridiculous given the fact that rent isn't included in the calculation. The prices of things that people need to spend money on is what matters the most unless you're just interested in some sort of academic exercise.
Profit hikes by the grocery oligarchy are the reason food prices still seem too high. The Kroger Safeway merger is designed to prolong this profit taking.
And crush Safeway's unionized workers.
Just wanted to reiterate that the UN FAO global food price index is a tool to visualize how food prices really have come back down, following a massive, unusual spike in early 2022. While grocers may be taking large profits right now, prices are nonetheless falling.
The average price per ounce for soft drinks in the Midwest (the first result I came across) has risen from $0.35 in the September 2018 to February 2020 period (roughly flat during those 18 months) to $0.55 per ounce, an increase of more than 57 percent. [https://fred.stlouisfed.org/series/APU0200FN1102 ]
Soft drinks are basically sugar, carbonated water, and flavoring in an can made of less than an ounce of aluminum. Fifty-seven percent?
The list price of a 12-pack of 12 ounce cans of Coca-Cola is $10.59 in my local Safeway. It was something like $5.99 in January 2020.
People don't only "notice" food or fuel prices. They also "notice" the coverage on these prices on the TV. And the TV probably does as much as direct observation to get people annoyed at inflation. This is good for the GOP. If it were good for Democrats the TV people would abstain from bitching about inflation on the air.
Tomatoes are down to a dollar, but greens are still high - lots of farms were damaged in the floods.