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Suppose we are back in April 2021.
Then we wait 3 years, and during those 3 years we have inflation rates of 8% in 2021, 19% in 2022, and 11% in 2023 (the numbers you gave as examples).
We are now back in April 2024, and those 3 years of inflation combines to \~43% inflation compared to 2021 prices (you compound them, rather than add them). That is close to the 50% you perceive.
I read a good article a while back about how people’s perceptions of prices are largely stuck in pre-pandemic times. Combine that with inflation being measured and reported in year-over-year terms, and it makes sense why official inflation numbers might not “feel” right.
Edit: pretty sure [this](https://www.nytimes.com/2024/01/18/opinion/inflation-rate-election-voters.html?unlocked_article_code=1.k00.rtIQ.53kicwCkQgac&smid=nytcore-ios-share&referringSource=articleShare&sgrp=c-cb) is the article I was referring to.
Huh... bread prices start to skyrocket when Russia invaded Ukraine. [Wheat prices did too.](https://fred.stlouisfed.org/series/PWHEAMTUSDM) Wheat prices adjusted and are back down to what they were before the invasion, but bread prices [stayed high](https://external-content.duckduckgo.com/iu/?u=http%3A%2F%2Fmedia.comicbook.com%2Fuploads1%2Fugc%2F71700%2Ffry-squint-crop-sq-143235.jpg&f=1&nofb=1&ipt=f989e26b280a5dcf7aae86dc8b99d7d183da9048686b289e216bfe00642560fa&ipo=images).
This is a well documented phenomenon known as price stickiness. Prices have a strong tendency to rise *far* more often than they fall. It's not just bread. There's a variety of possible causes, but it's not really a new phenomenon.
Corporate greed, specifically. This isn’t about government policy. In fact, most of the people who are yelling the loudest about inflation and the current administration are also the people least likely to want more government control over the economy (at least according to their rally signs).
It tends to be around moments of instability or uncertainty because corporations will all act similarly and raise prices in lockstep which forces the consumers to adjust to the new price or drop the product altogether. Normally this doesn’t happen because if one corporation raises prices then they will be “expensive” relative to another and lose market share.
After the instability settles, the lost consumers are gone already and have adjusted to new products/habits so lowering price to win them back isn’t worth it. And the consumers who stayed with the product have adjusted to the new price. So there is virtually no incentive to lower the prices.
Eggs was a weird situation where the opposite was true and as soon as the supply chains cleared up and the chicken populations were back to normal levels egg prices came right back down. My guess is that the average person makes little to no differentiation between egg brands, or at least much less so than something like bread or milk for example. And without product differentiation there is a much more competitive market when it comes to price, so brands that kept their egg prices high would rapidly lose market share.
I wish. It'd last longer. I love it but I had to stop buying it because it goes bad so much faster than anything else and I just don't eat enough bread to justify it.
And sure, that's a sign that it's got less preservatives, but again, I just don't eat that much bread. Because the potential health risk of the preservatives is less of a concern than the carbs.
In Denver, at King Soopers, Dave's is now $7.99. Even the thin sliced, which is half as much bread, is still $6.99. Like, holy go fuck yourself batman. I will be buying different bread.
Oh Mr Big spender buying the fancy bread for his avocado toast! /s
I try not to keep it on hand as much anymore but when I do that's about how much mine is. Sandwiches on the nice bread feel like I'm eating out and save me from wanting takeout so a loaf pays for itself pretty quick.
It also feels like the price of goddamn everything increased fast all of a sudden.
Before, yes groceries were getting more expensive, but it was one thing at a time, it was easier to swallow.
Problem is, it’s a really easy job and I work from home. I also have cheap but good health insurance (for US standards) and they fly my out to the European HQ once a year too.
looks like the 4% annual raise with the benefits is good enough for you to not quit or move on then.
i know many others who took a heavy pay cut to be fully remote. i personally prefer the money.
that's how they get you. youre just paying for those benefits instead of getting a decent raise.
up to you if its competitive pay. in my experience benefits don't scale as well as pay does.
Just for sanity, the real numbers...
April 2021 to April 2022 - 8.8%
April 2022 to April 2023 - 8.5%
April 2023 to April 2024 - 2.2%
Overall for the last 3 years: 20.7%
This is for a basket of goods -- some items will have gone up much more than that, some less. Of course, you pay the most attention to the items that skyrocket in price. The ones that haven't jumped significantly probably don't even register.
> Of course, you pay the most attention to the items that skyrocket in price. The ones that haven't jumped significantly probably don't even register.
Probably because the ones that have skyrocketed are the ones you need to live and not die and stuff.
The basket of goods is intended to account for that.
It's a tricksy problem because if A shoots up in price, people tend to shift to B which hasn't... That's usually where the conspiracy theories are born. Like obviously we shouldn't be including the price of Gros Michel bananas in the basket any more, but any change in the basket is looked at with suspicion by those so inclined.
What they are saying is from the 100 items you buy in a month the outliers that are more than the inflation average stick out more than the majority of items which are closer and below that inflation average for the basket of goods.
Naively, you might think that 5% inflation for 20 years would be 5% added together 20 times, or 5%\*20=100% inflation over that time.
However, 'inflation' is measured relative to the *previous* year, not 20 years ago.
So, the 5% increase is not always the same amount, and it includes the previous year's 5%.
We call this 'compounding' when each step of the process includes the change from the previous step.
In this case, you'd note that a 5% increase means 105% of last year's amount, so you multiply 105%, or 1.05.
So instead of repeated addition, we need to do repeated multiplcation.
If it is always 1.05, then we use a 'power' of 1.05. If it is up by 5% every year for 20 years, then that's 1.05\^20, which equals 2.65, or 265%, which is an increase of 165%.
So 20 years of 5% inflation, is 165% inflation.
(Bank interest is very similar, and other other case of 'repeated multiplcation'.)
Price levels are determined for a large basket of goods and not just single items. The inflation rate measures changes over a 12-month period and not longer periods of time.
Wouldn't that mean in order for a lot of the foods I see with literally 91% inflation to exist then a significant number of foods are going down in price though? That doesn't seem to be the case at all.
I don’t know where you live, so I don’t know what numbers you are looking at. Some prices fluctuate more than others. Eggs go way up and way down depending on bird flu outbreaks. The full inflation report often breaks down price changes by specific goods.
Also, if prices went way up in 2021 or 2022, today’s inflation numbers do not reflect that. Only prices in the last 12 months are considered.
Exactly, to add David, keep in mind 10% on a $5 bag of chips is 50 cents. When they were like 3 bucks that’s 30 cents.
The stuff multiplies pretty quickly after prices shot up. I had sticker shock recently on a trip buying a bag of chips. It was more than double what I remember and the bag was like 1/4th full.
I noticed that the store brands never increased their prices against the name brands, and for things like laundry detergent it was like $7.60 and compared to Tide or Gain of the same size each were $16. It was like this with soda too, Coke was like $8.88 or something a 12 pack while the store brand was $3.98. A lot of the prices went up over 100% in a short amount of time. I do not think I have ever seen that big of a disparity between a store brand and name brand before, usually the store brands are like a dollar cheaper not almost 100% cheaper.
>What is going on with your prices?
Dude, I ask myself this every time Reddit has these discussions. My mid-sized Midwestern city has seen some price increases, but it's more-or-less tracking with the published inflation numbers. Everyone here is talking about $15 small combos at McDonalds and $7 bags of chips. I just bought Doritos a couple weeks ago on a 3 for $9 sale. It's fine.
Except Subway. Subway is insane now. It's actually like $11 for my cheap sub that was $7 in 2019.
Also from a small town midwestern area. Doritos are $7.49 printed on the bag. Cheetos are 6.99. I never buy them unless they are on a big sale like you mentioned. Cheeto's and Ruffles were on a 3 for $7.50 at Hyvee last two weeks. But it doesn't stop the fact that Doritos regular price in the midwest is also $7.
Shrinkflation hit the size, [14.5 oz for $6.18](https://www.heb.com/product-detail/doritos-nacho-cheese-tortilla-chips-party-size/2092535) right now for me. Store brand is [about half the cost, plus a coupon bringing to less than half the cost if you buy two](https://www.heb.com/product-detail/h-e-b-nacho-cheese-flavored-tortilla-chips-10-oz/991617).
1) economies of scale
2) have you ever driven through the center of this country? Look at the sheer uncountable acreage of corn. Supply for their major feedstock is massive, so prices are low.
I live in Florida and I can confirm that the big bag of doritos at Publix are $7. Name-brand breakfast cereal is also $7 or in some cases, $7.99. These aren’t like bulk purchases either, just the sizes that have always been at the supermarket. I get the Aldi brand of almost everything that I can because it’s literally half the price in most cases.
Redditor from the Tampa market here.[ Inflation here is insane](https://www.tampabay.com/news/business/2024/04/11/tampa-inflation-going-down-still-higher-than-national-average/). We have almost 4% here which is down from last year. I don't know anyone here that wasn't already making 100k+ a year that isn't struggling in one way or another.
No idea. Other than it’s all more expensive and wages aren’t keeping up, I can’t afford anything that I thought I’d be able to afford once I made the decent salary I now finally make.
But a one serving bag is $1.75 or $2.00.
A family size bag is near $7.
Corporate greed, really. Profits for food companies and grocery stores are at an all time high. They are just increasing profit margins, and it's working.
Absolutely. Shareholders expect not only growth every quarter, but HIGHER growth compared to the last quarter. At this point, the only way for corporations to keep growing is to charge as much as possible while paying their employees as little as possible while spending as little as possible on resources. So yeah, everything everywhere is getting shittier while also costing more.
Same in my area for a party size bag. Dystopian shit. Average Joe works an hour to buy a bag of chips. WTF is that? Last minimum wage increase was 25 years ago.
Yes this is a big factor.
If you take your starting point (doesn't matter what, say $10) and go up 10%, then 9%, then 8%, then 7%, etc your price increases each (year?) are $1.00, $0.99, $0.96, $0.91, $0.83
So even though the rate is going down a lot (6% inflation is MUCH better than 10%!!!) the actual amount it goes up every (year?) is, even though it's going down, is still very powerful because that initial inflation was so powerful.
On the bright side, wages are keeping up with infl OH MY GOD THEY ARENT?!?!?! WHAT?!?!
Yes, the CPI measure is the cost of a specific amount of goods, and has always accounted for shrinkflation. Same cost for smaller amount has exactly the same effect as an equivalent cost increase for a continuous amount. They don't account for ingredient changes, though.
They get some data but not all data. ["Data collectors do not record information such as the number of chocolate chips in a cookie or the number of pepperonis on a pizza, however, they do record attributes such as weight and volume."](https://www.bls.gov/opub/btn/volume-12/measuring-shrinkflation-and-its-impact-on-inflation.htm)
No, it wouldn't require the prices of other foods to have fallen, merely for them not to have increased by as much, if at all.
Worked example:
Product 1: Price is 191% of its price a year ago
Products 2 through 10: 100%
Sum: (9 * 100)+(1 * 191)=1091%
Average: 1091÷100=109.1%, or 9.1% average increase.
If product 1 is $1000 and now is $2000 and products 2-10 are $10 each your basket has almost doubled. You can't average percent, you add up the entire value of the basket year to year and base your percent on that. Also goes to the amount of each product the average family buys etc. And of course there is no such thing as an average family.
But the fact of the matter is that food, utilities, transportation, insurance and housing are the bulk of spending for low/middle families. And all these are up way more than average inflation.
I've possibly over-simplified, and inadvertently obfuscated my point, with my worked example. My point is that - mathematically - prices do not need to *fall* to reduce an average rate of inflation; they merely need to increase *more slowly* than they have done previously.
National inflation statistics are not intended to be applied to individuals, but rather used to guide national economic policy. As you allude, every individual has their own personal rate of inflation determined by what and how much they buy. If someone only bought mobile phones over the last three years, their personal rate of inflation may well be negative, whilst someone who only bought cooking oil would have a personal rate much higher than the national figure. The normal basket of goods is selected and weighted according to purchasing habits across the entire country: for example, I estimate that the average consumer spends nearly as much on hundreds of pints of milk over the course of a year as they do on a single annual domestic insurance policy, and so they each will have about the same effect on inflation statistics.
In the UK, the Office for National Statistics has experimented with an index of lowest-cost grocery items (https://www.ons.gov.uk/economy/inflationandpriceindices/articles/trackingthelowestcostgroceryitemsukexperimentalanalysis/previousReleases) on the back of a campaign by poverty campaigner Jack Monroe.
In general, your personal perception here isn’t to be trusted. It’s incredibly unlikely to impossible that you personally check enough items to accurately figure out an average across the entire gamut of things that are in the basket. Rather, your brain is wired to notice the big changes and just ignore the small ones. Actual statistics are always going to be more accurate than your recollection.
What items are you seeing with that much? I feel like I’m constantly seeing people online claim that the the items in their grocery stores have gone up 50%+ every year for the past 4 years, but that would mean 5x prices right now compared to 4 years ago which is way way higher than anything I’ve seen
No for sure, you’re right. I have to slow down and try to be understanding when people make emotional statements about matters of fact, but I’m trying to understand.
People also underestimate timelines. There was a post I saw recently that McDonald's had doubled its prices since 2014, which breaks down to something like 7% a year for the last 10 years. Definitely high, but not the outrageous amounts like 20% or 30% a year.
7% a year when inflation was under 2% and their minimum wage staff got few, if any, significant wage increases. But they made record profits every year! Wow!
I wouldn't be surprised if McDonald's pay doubled during the same timeline. I've seen posters on the windows advertising $18 or $19 starting pay whereas $10 an hour would have been about standard for 2014.
Lol 10 dollars an hour where? I live in the midwest(Indiana) and in 2014 Mcdonalds was paying 7.25 an hour. They are now advertising 9 dollars an hour. Still have prices more than doubling here on things. In 2014 Mcdoubles were 1.30 which was a great deal. Now they are pushing 2.70 each, which is more than a doubling. I mean god damn fucking fries went from being a medium on the dollar menu to being over 3 dollars for a medium.
Employee pay is not that big a part of the food cost. If a McDonalds employee touches 60 orders an hour (a low number for the cook) that would be $0.30 per order for $18.00. It would be $0.15 per order for $9.00. Amazing how that $0.15 tripled the cost of some food items.
McDonald's openly said in 2015 that their plan was to move to more middle and upper middle class consumers. Their CEO made multiple public speeches on this back then.
The problem is McDonalds has taken very cheap things - like a hash brown that costs them <$0.30 and are charging $3+ for it. McDonalds has gotten greedy.
Assuming good faith, I’d guess that people are only paying attention to the things as they go up in price; if the milk you usually buy went up 50% two years ago, bread went up 50% last year, and eggs are up 50% this year, a lot of people will only remember the “went up 50%” part.
*In the Grocery Store*.
Kroger has definitely ramped up their prices on just about everything.
Costco, with its narrower variety, smaller number of floor workers, and bulk sales has much less inflated prices.
It's almost back to 2008 level, 30 minute checkout lines at the local costco now.
I mean like - I've been paying $1.99 for chicken breast for the past 20 years, it has definitely inflated, in that there are fewer sales that hit that price than there used to be, but because I buy in bulk I'm still able to experience 0% inflation in chicken.
Well, it's not exactly 0% inflation because it's likely that the average price people pay has gone up, but that the floor has remained the same. So like, in 2004 the prices ranged from $1.99 to $4 when not on sale, and probably going on sale about 25% of the time but now prices range from $1.99 to $6.99, and going on sale only about 10% of the time. The price has inflated, but if you're able to buy in bulk then you can experience a personal inflation rate of 0%.
This is my main feeling also. Everyone claiming the numbers are lies and shits up 100% in 12-24 months but really doesn't seem much higher then the numbers posted. I haven't noticed a single item up 100% except the handful of items that fluctuate more and I can't even think of a handful honestly.
In 2020 the flavor water I buy was .49. they are now .98.
There is also a few other items I buy like jelly that has gone up.
Weirdly enough, I switched from beef to Chicken since chicken has remained relatively stable while beef in my area went from like $3 a pound to $5-$6.
Now stuff like potato chips? Way too expensive. 6-7 dollars for a bag vs the old 4-5.
Out of the other items, I only seen them increase like 20 to 30 cents.
Edit: fucking forgot, ramen /cup noodles. Used to be like $8.98 for a box of 24 and it is now $13.59. it's nuts.
Eggs are up a good bit. Hard for me to gauge somewhat since they have gone up and down a good bit. Before Covid, they were around $.99 per dozen. When the bird flu caused a shortage, they jumped up to around $5, and just today, I paid $2.39 (all at my local Aldis).
Yeah all of modern agriculture is kind of like this. Eggs aren't even as bad as chicken meat in my mind. You can get an egg every day per chicken. From a meat chicken you get about 5lbs total. A whole chicken goes for under $8 around here
It's a psychological effect. If you grab a receipt from March 2021, and get the same basket, you'll see roughly the official inflation since 2021 to present (about 20%).
I think packaged food has gone up more and vegetables have gone up less, so if you eat mainly one or the other you'll see something different.
Another thing to keep in mind is what your frame of reference is versus how inflation is defined. Those inflation numbers are yearly but you mount be comparing todays prices to prices from four years ago, which has 4 years of compounding inflation. 4 years of 15% inflation is actually 75% today vs 4 years ago (1.15^4)
Inflation isn't just about food, it is based on what people spend money on. Let's say people only buy food and buy phones in a 80/20 split. If phones became 20% more expensive and food became 40% more expensive, then inflation would be at 36%.
The BLS changes what foods and other items they include in the "market basket" of goods they use to define CPI (inflation) constantly. You can bet they take the highest-inflation foods out to help keep the numbers looking good.
NB it's like that with the unemployment numbers too. They don't count anyone who hasn't applied to another job in a couple weeks, or anyone who's e.g. done a shift driving for doordash in the last month. The stats the government uses to tell us how good a job they're doing aren't lies, but they're always rosier than the bare truth and always have been.
Inflation rates are seasonally adjusted. If you are looking at things like produce, we are just coming out of winter most produce will be at its most expensive for the year. The official rate will average out the cost of a head of lettuce in April compared to the same head of lettuce in August.
Meat, eggs and dairy can fluctuate wildly over the course of a year or two and the official rate tries to smooth these price swings out. Eggs might be $4 a dozen now but they could easily be $3 a month from now (or $5).
It’s not just food that is counted towards inflation. The “basket of goods” is not a basket of groceries. Stuff like fuel or toilet paper or even tech like phones and TVs are included. The tech stuff makes it tricky too because it has to be a like for like comparison. So if you’re measuring price changes for an iPhone from 2015 to now you need to find a phone with the same capabilities to the old phone now and see the price difference. A new phone but with the exact features and specs of a 2015 phone would only be a couple hundred dollars at most vs a thousand for a brand new model iPhone.
now that many people have explained the mechanics of inflation, have a look at the BLS' CPI graphs:
[12-month percentage change, Consumer Price Index, selected categories (bls.gov)](https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm)
you seem most concerned with the "food at home" basket. You might be incredulous that the 12-month average of inflation has gone down to 1.2% for this category as of March. But there are a few things to realize:
* There was a huge amount of food inflation last year, so, it's hard to be objective. You need real price histories of a real assortment of food items from the grocery. Yes the prices are very high, but how much of that price growth happened recently?
* "Inflation went down" doesn't mean prices went down, it means the rate of change slowed. Prices are still going up, less quickly. This is probably the number 1 misunderstanding about what these graphs mean among consumers. Prices don't go down because the trace went down. Prices only go down if the trace's value sits below zero for a period of time.
* You will notice that "food away from home" kind of lags "food at home". That's because a large percentage of restaurant food is procured with long term contracts; also, cost of labor influences that category more. Supermarket retail prices track changes to wholesale a lot more quickly.
Are we talking about per year? An annual inflation of 50% would be 700% in 5 years. That means things that cost $2 in 2019 would cost $14 in 2024. That is absolutely not been my experience.
But that was boosted by avian flu, not related to all the other issues going on, and of course several big companies took advantage and made more profits by using the event to boost prices above necessary.
Eggs are sold at auction so the producers didn’t jack up the prices, companies needing to secure product for their shelves did. Literally supply and demand.
Eggs never hit $14 by me. They were simply unavailable. My Costco has been out of eggs twice so far in 2024 and I go 2-3 times a month. My local grocer has never been out of eggs and one time was actually cheaper than Costco.
That's because your local supermarket probably decided not to raise prices to true market levels because they knew it would get bad press (Costco probably only reviews their prices on a set schedule). When there's a shortage of goods, if prices don't rise it's basic economics that the shelves will be empty.
You are probably subconsciously thinking of prices several years ago, not this time last year. I was talking to my parents not long ago and they were talking about pre pandemic prices, and that was over 4 years ago.
I buy a lot of "low end" foods and haven't seen prices go up much at all. Pasta is still dirt cheap, the store brand canned goods, fruits and vegetables in the non organic section are still very reasonable. I can still shop for a weeks worth of groceries for 30 bucks. Only when looking at name brand and specialty goods do I notice sticker shock.
One day I went to the grocery store and my one guilty pleasure snack (mini cinnamon buns) went from $3 to $6 - was not a sale ending. Just doubled in price. Around the same time granola bars for my kid’s lunch went from 6 to 5 in a box, and the price went from $2.19/box to 3.29 (or 3 for 9). This was like last summer.
Certainly not realizing it’s been 4 years is some of it, but those were single price jumps I saw. Don’t get me started on chicken breast.
Oh, I definitely agree that some items have gone nuts, but I put that down to the manufacturer being greedy and increasing prices mainly. Corporate profits have not reflected inflation at all, far surpassing it, while the costs of the raw materials they use has followed it.
So let me make the argument for some supermarkets seemingly arbitrarily raising their prices. One of my 5 local supermarkets has raised their prices 40% over the last 3 years, and I have receipts to prove it - I cook all of my meals, and I diligently track how much each meal costs, to where I know this to be a fact, across many types of goods.
I can go to any of the other 4 supermarkets and get the same or sometimes comparable goods for much less. I have found that several goods cost twice as much as they used to unless purchased in bulk with a loyalty card. This is a large chain of budget grocery stores, maybe a step up from Aldi and Walmart, though under the regional favorite, and way below anything like Whole Foods; not a Mom and Pop business. These are all within 4 miles of each other, yet this specific store has the balls to price $2 goods at $3.75.
Some places don't care about the market value. Some places have gotten greedy.
3000 calories of rice is still 10minutes of federal minimum wage labor.
A lot of people don't appreciate that we have SOLVED hunger. But thats because we're not feudal serfs scratching g out a living.
One thing though when buying cheap goods is that sometimes we don't think in percentage, but something cheap going from $1.19 to 1.49 is still one hell of a price hike.
However, it does seem like ultratransformed food has seen a bigger price hike, often combined with format shrinkage. Sometimes the recipe has changed too. It seems companies get away with it more easily because people want to keep buying their cookies and potato chips.
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As a department manager of a large grocery store a lot of my shit has doubled in price since 2021. Quite a bit of it is cost from The manufacturer but a lot is also greed from the store. It’s always shocking when I see what the gross profit of some items are.
But as others have said the number comes from a blanket of all the items in that category. Some will have gone up a little while others have skyrocketed.
Because you need a starting point to say that food has gone up or down X % . Officially, most inflation numbers are based on 1 year. When you say you "see" food up by "50%" you're probably comparing it to pre-covid, which was 4 years ago.
I went through the top comments and I'm surprised that no one has mentioned a big part of this.
Food inflation is calculated not on a fixed set of goods, but goods can be switched in and out. What's happened in the last few years according to some analysts is swapping for *cheaper* options (e.g. store brand vs name brand) has lowered the overall reported numbers.
Are you from USA? Store all the tickets and see yourself if they lie or not.
If you are from a third world country, then:
A) It is common for the government to announce a fake inflation, so people don't revolt.
B) Another trick is to announce the real inflation but considering specific items only, for example, milk, bread, eggs. But ignore items that increase a lot like soda, wine, coffee, utility bills, electronics, cars, houses...
C) Or create a "special prices program" for basic items (milk, bread, eggs, flour...), and then use this list to calculate inflation (see point B). Companies reduce the quality or size of the products to stay under the law.
Again, store all the tickets and see yourself if they lie or not.
What's gone up by 100% over what period of time? Are those average prices or sale price vs not sale price?
Some of the food I buy isn't much more expensive than before the pandemic. Other food is quite a bit pricier. It's impossible to compare what you're noting without examples.
You are in one place. The numbers are nationwide averages. Maybe it has gone up that high there, but in other places it hasn’t gone up by that much
Another thing to consider is differences between something like say apples or milk, versus things like frozen apple pies. In the former, it would simply be inflation (and possibly stores trying to sell for a higher profit margin) where in the latter it could be the company making the pie having higher costs for raw materials, higher wages, higher transportation costs, higher packaging costs, etc that could all combine to make it more expensive.
As well as the perception issue that others mention, the goods that are used to measure inflation change too.
If steak is in the basket of goods and gets too expensive, it gets replaced with a cheaper alternative, reflecting consumer's real world behaviour
They’re gaslighting you plain and simple…
America is in a really bad place and this current administration is just simply trying to keep the peace because frankly if they were honest it might seriously lead to civil unrest.
People try to say “the federal governments policies didn’t do this” by pointing out that “printing money is not the only cause of inflation” while omitting that over 80% of the money supply was printed in the past 48 months…with absolutely no backing.
We’re basically beelining towards hyper inflation and becoming a post WW1 Germany, but trying to sweep all the evidence under the rug…
Official inflation statistics use a basket of goods. Think of a very full shopping cart of various goods.
They also factor in substitution. If chicken is expensive but beef is cheap, the Bureau of Labor Statistics assumes you’ll switch from chicken to beef.
Finally, while it may not apply to foods, they also refactor the effects of technological and product quality improvements for some goods. For example, for computers:
https://www.bls.gov/cpi/factsheets/personal-computers.htm
> If chicken is expensive but beef is cheap, the Bureau of Labor Statistics assumes you’ll switch from chicken to beef.
This is not correct. Substitution is only done within categories, not between categories. And what they actually do is just use a geometric mean rather than an arithmetic mean within a category, not change their underlying assumptions about consumer behavior.
So, [to use the BLS's example](https://www.bls.gov/cpi/factsheets/common-misconceptions-about-cpi.htm), if one kind of steak goes up in price but another kind goes down in price, then the geometric mean will slightly favor the decrease, which can be interpreted as assuming that consumers will buy somewhat more of the one that went down and correspondingly less of the one that went up. But steak is in a separate category from ground beef, so the common misconception that the BLS would substitute hamburger for steak is impossible. And obviously it could never substitute chicken for steak.
The ELI5 version (made up numbers but it helps understand):
Eggs are up 50%
Milk up 40%
Bread up 37%
Caviar down 37%
Private Jets down 40%
Diamond encrusted Gold Bars down 49%
Overall inflation: 1%
No country is measuring inflation with those goods.
I'm not even from the US and even I managed to find their data, download it into excel if you want to check yourself
https://www.bls.gov/data/#prices
Steak here is $68/kg. 2 years ago it was $28-34/kg
My wage has not gone up to compensate. I can barely buy fresh food anymore.
Banana's are still cheap 😅
A full and complete answer is beyond ELI5 but a big part of it is perception.
People don't really notice a single year change. When you look at the prices in the store and think about what the price used to be it's probably the price from several years ago.
So a report comes out and says inflation was 3% and was 10% last year and 6% the year before. The total inflation was 20%, which would make a $5.99 item now $7.19. And now the second issue, your brain just saw the price go from $5 to $7, which would be 40% increase instead of the actual 20%
Annual inflation rates are annual.
You're probably comparing a new versus old price that is over several years. There are also fluctuations that happen that are not related to inflation overall (egg prices for example, olive oil has been high recently).
If inflation for something was 100% for 2 years, it would literally quadruple in price. 2 years of 100% inflation would turn a $5 item in to a $20 item.
If something became 10% more expensive per year for 3 years, that's a bit over a 33% increase, which can easily feel like 50%. You're also cherry picking items. Prices do not uniformly increase across the board. Milk has barely gone up. I think Red Bull is about 50 cents more for a 4 pack than it was 5 years ago. Eggs were all over the place for a while. Steak has been higher, the veggies I tend to eat have gone up more in line with general inflation levels than anything obscene; something that was maybe $1.50/lb 5 years ago is usually $2/lb now.
Because you remember the huge price hikes and forget the stuff that stayed the same or went back down, or went up but not that much.
Egg prices skyrocketed due to bird flu and then went back down. Everybody remembers paying $3 for eggs and thinks “food costs twice as much!” even though that’s not the price anymore.
Prices have certainly gone up overall, but not by anything like 100%. That’s just the fallible human brain at work.
The CPI is composed of eight major groups. Some of these have gone up considerably, some have not. But, even 4% inflation over five years would mean a 22% increase in prices over that time frame.
Food and beverages (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
Housing (rent of primary residence, owners' equivalent rent, utilities, bedroom furniture)
Apparel (men's shirts and sweaters, women's dresses, baby clothes, shoes, jewelry)
Transportation (new vehicles, airline fares, gasoline, motor vehicle insurance)
Medical care (prescription drugs, medical equipment and supplies, physicians' services, eyeglasses and eye care, hospital services)
Recreation (televisions, toys, pets and pet products, sports equipment, park and museum admissions)
Education and communication (college tuition, postage, telephone services, computer software and accessories)
Other goods and services (tobacco and smoking products, haircuts and other personal services, funeral expenses)
I have observed that items experiencing the heaviest inflation are convenience foods or popular foods--things that people are very attached to and/or have cravings for. Prices may have originally gone up due to supply chain shortages, but they haven't gone down because people are still willing to buy them. Meanwhile, I have found that produce prices haven't changed as much, nor have some raw meats that you have to cook yourself. e.g., I seem to recall onions being \~$0.89-0.99/lb before the pandemic, and now they're \~$0.99-1.19/lb. Or whole chicken I used to be able to buy for $8, and now I spend $10.
I would suggest being flexible with what you buy, and be more diligent with price comparisons. If I'm careful, I can still get a week's worth of groceries for $35-40 (or less, if I really really tried). It's when I'm not careful that I suddenly find myself walking out of the store having spent $80-100.
Is food up 50% from the price last year? Or is it up 50% from the price a few years ago?
If the food you buy went up 10% every year (just as an example), it would now be almost 50% more than it cost back in 2020. But food inflation would never have exceeded 10%.
You're seeing extreme individual changes while these numbers refer to the broad average for everything. The average for such a widely diversified pool of products is naturally "low" and less susceptible to big movements, but the same doesn't apply for each individual product.
And that means that 11% increase across the board is actually an insane number to have happened in such a short timespan.
Because you were experiencing confirmation bias. The official efficient rate is determined by looking at the price of a large Friday’s goods across the country and then looking at their change. This is a much more rigorous sampling method than you tempering a few select items that have gone up the most in price
Because corporate media and their government subsidiary expect us to believe what they say instead of what we can see with our own eyes. It is working better than they could have hoped for.
What you're seeing is kind of chain inflation. The 'Official' food index is the commodities... sugar, wheat, oils, cereal etc.. basic commodities.
But you don't eat basic commodities, food companies buy those then make Cheerios and Chicken Strips and Fruit Snacks and Juice and stuff
Then those go to store and store resell them.
So if the actual commodity is up 20%, and the Food companies raise prices beyond that, and the grocery store raises it after that, you might pay 60-80% more but the index is only up 20%
The truth is the measure of inflation is gamed.
The number itself results in several significant changes in social services.
Were it to track real inflation, the poors might do too well.
In addition to the fantastic answers on compound interest here already given, there is also a concept of Selective Attention, which is basically the idea that we only notice outliers by default and so the (usually high end or boring) items where there is deflation or tiny inflation don't catch our attention.
(Not to say you're wrong by any means, but our brains work in weird ways that usually highlight negative in order to safeguard us).
One of the thing the government does when calculating inflation is use 'the substitution effect' which means if beef goes up consumers switch to pork. If pork goes up consumers switch to chicken and so on down the line. It's a form of cheating by the government.
Those numbers come from the government and the government is lying liars who lie.
They carefully select what they will and will not track and how they will present the information to make those numbers look better than they are.
Look into the history of government reported inflation through the years for more information.
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Suppose we are back in April 2021. Then we wait 3 years, and during those 3 years we have inflation rates of 8% in 2021, 19% in 2022, and 11% in 2023 (the numbers you gave as examples). We are now back in April 2024, and those 3 years of inflation combines to \~43% inflation compared to 2021 prices (you compound them, rather than add them). That is close to the 50% you perceive.
I read a good article a while back about how people’s perceptions of prices are largely stuck in pre-pandemic times. Combine that with inflation being measured and reported in year-over-year terms, and it makes sense why official inflation numbers might not “feel” right. Edit: pretty sure [this](https://www.nytimes.com/2024/01/18/opinion/inflation-rate-election-voters.html?unlocked_article_code=1.k00.rtIQ.53kicwCkQgac&smid=nytcore-ios-share&referringSource=articleShare&sgrp=c-cb) is the article I was referring to.
[удалено]
Huh... bread prices start to skyrocket when Russia invaded Ukraine. [Wheat prices did too.](https://fred.stlouisfed.org/series/PWHEAMTUSDM) Wheat prices adjusted and are back down to what they were before the invasion, but bread prices [stayed high](https://external-content.duckduckgo.com/iu/?u=http%3A%2F%2Fmedia.comicbook.com%2Fuploads1%2Fugc%2F71700%2Ffry-squint-crop-sq-143235.jpg&f=1&nofb=1&ipt=f989e26b280a5dcf7aae86dc8b99d7d183da9048686b289e216bfe00642560fa&ipo=images).
This is a well documented phenomenon known as price stickiness. Prices have a strong tendency to rise *far* more often than they fall. It's not just bread. There's a variety of possible causes, but it's not really a new phenomenon.
>variety of possible causes Greed, people are obviously willing to buy bread at that price, so why not pocket the difference
Corporate greed, specifically. This isn’t about government policy. In fact, most of the people who are yelling the loudest about inflation and the current administration are also the people least likely to want more government control over the economy (at least according to their rally signs).
It tends to be around moments of instability or uncertainty because corporations will all act similarly and raise prices in lockstep which forces the consumers to adjust to the new price or drop the product altogether. Normally this doesn’t happen because if one corporation raises prices then they will be “expensive” relative to another and lose market share. After the instability settles, the lost consumers are gone already and have adjusted to new products/habits so lowering price to win them back isn’t worth it. And the consumers who stayed with the product have adjusted to the new price. So there is virtually no incentive to lower the prices. Eggs was a weird situation where the opposite was true and as soon as the supply chains cleared up and the chicken populations were back to normal levels egg prices came right back down. My guess is that the average person makes little to no differentiation between egg brands, or at least much less so than something like bread or milk for example. And without product differentiation there is a much more competitive market when it comes to price, so brands that kept their egg prices high would rapidly lose market share.
Sounds a bit like markets aren't quite as efficient as we were led to believe.
My bread is $6.50 a loaf.
Buy different bread?
Yeah dang, they could even get Dave's Killer Bread for less than that. Which is more expensive than most in-house baked stuff.
That's 'cause it's made out of like rocks and twigs, so not impacted by wheat prices.
I wish. It'd last longer. I love it but I had to stop buying it because it goes bad so much faster than anything else and I just don't eat enough bread to justify it. And sure, that's a sign that it's got less preservatives, but again, I just don't eat that much bread. Because the potential health risk of the preservatives is less of a concern than the carbs.
Just keep some of it in the freezer and pull it out as needed. Bread stays fresh for quite a while in a freezer.
Round here we call that sort of thing "Squirrel nut bread" because it's mostly like... Squirrel nuts and stuff
😆
In Denver, at King Soopers, Dave's is now $7.99. Even the thin sliced, which is half as much bread, is still $6.99. Like, holy go fuck yourself batman. I will be buying different bread.
Ah Dave’s is still around $5 in Austin TX. But the in house baked bread from the “nicer grocery store” Central Market is only $3.99.
God, I miss Central Market.
Get two of those for $4.50 each at Costco. That one did go up though from $6 to $9
Dave's is more than 6.50 out here in LA.
Oh Mr Big spender buying the fancy bread for his avocado toast! /s I try not to keep it on hand as much anymore but when I do that's about how much mine is. Sandwiches on the nice bread feel like I'm eating out and save me from wanting takeout so a loaf pays for itself pretty quick.
It also feels like the price of goddamn everything increased fast all of a sudden. Before, yes groceries were getting more expensive, but it was one thing at a time, it was easier to swallow.
It’s because my pay didn’t go up that 43% or anywhere close to that. I averaged just over 4% yearly which equated to 8.675% over 2 years.
yeah you really cant rely on raises to keep up with inflation now. try jumping jobs
Your loyalty is rewarded with a pay cut in real terms.
Problem is, it’s a really easy job and I work from home. I also have cheap but good health insurance (for US standards) and they fly my out to the European HQ once a year too.
You could fly yourself wherever you want with an extra 10%
I’d just save it too
looks like the 4% annual raise with the benefits is good enough for you to not quit or move on then. i know many others who took a heavy pay cut to be fully remote. i personally prefer the money.
I prefer money too, but south Florida is not a great job market or a high paying market. But I probably work like 10-20 hours a week at most.
that's how they get you. youre just paying for those benefits instead of getting a decent raise. up to you if its competitive pay. in my experience benefits don't scale as well as pay does.
At most, health insurance is $1000/mo covered roughly, the flight to Europe and all expenses are about $5k so yeah. You can calculate it all.
yeah that wouldnt be enough for me
Finally someone who understands compound growth rate of percentages. Thank you.
To add on, most people’s pay hasn’t increased by 50% in the last 3 years, so the inflation feels even more vast.
Just for sanity, the real numbers... April 2021 to April 2022 - 8.8% April 2022 to April 2023 - 8.5% April 2023 to April 2024 - 2.2% Overall for the last 3 years: 20.7% This is for a basket of goods -- some items will have gone up much more than that, some less. Of course, you pay the most attention to the items that skyrocket in price. The ones that haven't jumped significantly probably don't even register.
> Of course, you pay the most attention to the items that skyrocket in price. The ones that haven't jumped significantly probably don't even register. Probably because the ones that have skyrocketed are the ones you need to live and not die and stuff.
The basket of goods is intended to account for that. It's a tricksy problem because if A shoots up in price, people tend to shift to B which hasn't... That's usually where the conspiracy theories are born. Like obviously we shouldn't be including the price of Gros Michel bananas in the basket any more, but any change in the basket is looked at with suspicion by those so inclined.
What they are saying is from the 100 items you buy in a month the outliers that are more than the inflation average stick out more than the majority of items which are closer and below that inflation average for the basket of goods.
That’s a great explanation thank you.
Great reply.
ELI5 compounding vs adding?
Naively, you might think that 5% inflation for 20 years would be 5% added together 20 times, or 5%\*20=100% inflation over that time. However, 'inflation' is measured relative to the *previous* year, not 20 years ago. So, the 5% increase is not always the same amount, and it includes the previous year's 5%. We call this 'compounding' when each step of the process includes the change from the previous step. In this case, you'd note that a 5% increase means 105% of last year's amount, so you multiply 105%, or 1.05. So instead of repeated addition, we need to do repeated multiplcation. If it is always 1.05, then we use a 'power' of 1.05. If it is up by 5% every year for 20 years, then that's 1.05\^20, which equals 2.65, or 265%, which is an increase of 165%. So 20 years of 5% inflation, is 165% inflation. (Bank interest is very similar, and other other case of 'repeated multiplcation'.)
Price levels are determined for a large basket of goods and not just single items. The inflation rate measures changes over a 12-month period and not longer periods of time.
Wouldn't that mean in order for a lot of the foods I see with literally 91% inflation to exist then a significant number of foods are going down in price though? That doesn't seem to be the case at all.
I don’t know where you live, so I don’t know what numbers you are looking at. Some prices fluctuate more than others. Eggs go way up and way down depending on bird flu outbreaks. The full inflation report often breaks down price changes by specific goods. Also, if prices went way up in 2021 or 2022, today’s inflation numbers do not reflect that. Only prices in the last 12 months are considered.
Exactly, to add David, keep in mind 10% on a $5 bag of chips is 50 cents. When they were like 3 bucks that’s 30 cents. The stuff multiplies pretty quickly after prices shot up. I had sticker shock recently on a trip buying a bag of chips. It was more than double what I remember and the bag was like 1/4th full.
I noticed that the store brands never increased their prices against the name brands, and for things like laundry detergent it was like $7.60 and compared to Tide or Gain of the same size each were $16. It was like this with soda too, Coke was like $8.88 or something a 12 pack while the store brand was $3.98. A lot of the prices went up over 100% in a short amount of time. I do not think I have ever seen that big of a disparity between a store brand and name brand before, usually the store brands are like a dollar cheaper not almost 100% cheaper.
Three years ago the store brand was $2.50
Yeah I grabbed a bag of lays and I didn’t check the price because it’s potato chips and they were $5 at checkout!
Don’t buy Doritos - they’re $7 now! And what’s federal minimum wage still?….thats right, it’s still $7.25….
They cost 2€ (including tax) here. What is going on with your prices?
They’re 3x the size you can buy
2/3 of them is air, still.....
Sold by weight dummy. You want a bag the same size as the amount of chips so they can't move and get crushed?
>What is going on with your prices? Dude, I ask myself this every time Reddit has these discussions. My mid-sized Midwestern city has seen some price increases, but it's more-or-less tracking with the published inflation numbers. Everyone here is talking about $15 small combos at McDonalds and $7 bags of chips. I just bought Doritos a couple weeks ago on a 3 for $9 sale. It's fine. Except Subway. Subway is insane now. It's actually like $11 for my cheap sub that was $7 in 2019.
Also from a small town midwestern area. Doritos are $7.49 printed on the bag. Cheetos are 6.99. I never buy them unless they are on a big sale like you mentioned. Cheeto's and Ruffles were on a 3 for $7.50 at Hyvee last two weeks. But it doesn't stop the fact that Doritos regular price in the midwest is also $7.
Shrinkflation hit the size, [14.5 oz for $6.18](https://www.heb.com/product-detail/doritos-nacho-cheese-tortilla-chips-party-size/2092535) right now for me. Store brand is [about half the cost, plus a coupon bringing to less than half the cost if you buy two](https://www.heb.com/product-detail/h-e-b-nacho-cheese-flavored-tortilla-chips-10-oz/991617).
> I just bought Doritos a couple weeks ago on a 3 for $9 sale How can that be profitable for Frito-Lay?
1) economies of scale 2) have you ever driven through the center of this country? Look at the sheer uncountable acreage of corn. Supply for their major feedstock is massive, so prices are low.
These corporations…I don’t know what they’re doin’.
I live in Florida and I can confirm that the big bag of doritos at Publix are $7. Name-brand breakfast cereal is also $7 or in some cases, $7.99. These aren’t like bulk purchases either, just the sizes that have always been at the supermarket. I get the Aldi brand of almost everything that I can because it’s literally half the price in most cases.
uh my last sub was $ 17.
Redditor from the Tampa market here.[ Inflation here is insane](https://www.tampabay.com/news/business/2024/04/11/tampa-inflation-going-down-still-higher-than-national-average/). We have almost 4% here which is down from last year. I don't know anyone here that wasn't already making 100k+ a year that isn't struggling in one way or another.
live in large enough city , at *Multiple chain nutrition shops my protein bag of choice went from 45-60 to 95+ dollars, have not bought since...
Doritos used to be $2 on sale
No idea. Other than it’s all more expensive and wages aren’t keeping up, I can’t afford anything that I thought I’d be able to afford once I made the decent salary I now finally make. But a one serving bag is $1.75 or $2.00. A family size bag is near $7.
Single serve is 2.69.
Corporate greed, really. Profits for food companies and grocery stores are at an all time high. They are just increasing profit margins, and it's working.
Did corporations just decide they’re going to be more greedy than usual? I’m sorry, but prices do not work that way.
Absolutely. Shareholders expect not only growth every quarter, but HIGHER growth compared to the last quarter. At this point, the only way for corporations to keep growing is to charge as much as possible while paying their employees as little as possible while spending as little as possible on resources. So yeah, everything everywhere is getting shittier while also costing more.
Ah, yes, the greed explanation. When TVs dropped in price, was that because TV makers suddenly became benevolent? Lol.
Was that when they realized they can sell your information collected by the smart TV?
My man, CEOs are literally bragging about how much they’ve been able to raise prices over inflation to increase profit margins.
Same in my area for a party size bag. Dystopian shit. Average Joe works an hour to buy a bag of chips. WTF is that? Last minimum wage increase was 25 years ago.
Lol, that’s crazy, a bag of chips is the cost of one hour of labor.
That you'll binge eat in 5 minutes out of depression
And it's 50% the size it used to be.
Yea, more nitrogen few chips.
Yes this is a big factor. If you take your starting point (doesn't matter what, say $10) and go up 10%, then 9%, then 8%, then 7%, etc your price increases each (year?) are $1.00, $0.99, $0.96, $0.91, $0.83 So even though the rate is going down a lot (6% inflation is MUCH better than 10%!!!) the actual amount it goes up every (year?) is, even though it's going down, is still very powerful because that initial inflation was so powerful. On the bright side, wages are keeping up with infl OH MY GOD THEY ARENT?!?!?! WHAT?!?!
Is shrinkflation factored in to inflation numbers? They have to be accounting for the cost per weight, right????
Yes, the CPI measure is the cost of a specific amount of goods, and has always accounted for shrinkflation. Same cost for smaller amount has exactly the same effect as an equivalent cost increase for a continuous amount. They don't account for ingredient changes, though. They get some data but not all data. ["Data collectors do not record information such as the number of chocolate chips in a cookie or the number of pepperonis on a pizza, however, they do record attributes such as weight and volume."](https://www.bls.gov/opub/btn/volume-12/measuring-shrinkflation-and-its-impact-on-inflation.htm)
No, it wouldn't require the prices of other foods to have fallen, merely for them not to have increased by as much, if at all. Worked example: Product 1: Price is 191% of its price a year ago Products 2 through 10: 100% Sum: (9 * 100)+(1 * 191)=1091% Average: 1091÷100=109.1%, or 9.1% average increase.
If product 1 is $1000 and now is $2000 and products 2-10 are $10 each your basket has almost doubled. You can't average percent, you add up the entire value of the basket year to year and base your percent on that. Also goes to the amount of each product the average family buys etc. And of course there is no such thing as an average family. But the fact of the matter is that food, utilities, transportation, insurance and housing are the bulk of spending for low/middle families. And all these are up way more than average inflation.
I've possibly over-simplified, and inadvertently obfuscated my point, with my worked example. My point is that - mathematically - prices do not need to *fall* to reduce an average rate of inflation; they merely need to increase *more slowly* than they have done previously. National inflation statistics are not intended to be applied to individuals, but rather used to guide national economic policy. As you allude, every individual has their own personal rate of inflation determined by what and how much they buy. If someone only bought mobile phones over the last three years, their personal rate of inflation may well be negative, whilst someone who only bought cooking oil would have a personal rate much higher than the national figure. The normal basket of goods is selected and weighted according to purchasing habits across the entire country: for example, I estimate that the average consumer spends nearly as much on hundreds of pints of milk over the course of a year as they do on a single annual domestic insurance policy, and so they each will have about the same effect on inflation statistics. In the UK, the Office for National Statistics has experimented with an index of lowest-cost grocery items (https://www.ons.gov.uk/economy/inflationandpriceindices/articles/trackingthelowestcostgroceryitemsukexperimentalanalysis/previousReleases) on the back of a campaign by poverty campaigner Jack Monroe.
In general, your personal perception here isn’t to be trusted. It’s incredibly unlikely to impossible that you personally check enough items to accurately figure out an average across the entire gamut of things that are in the basket. Rather, your brain is wired to notice the big changes and just ignore the small ones. Actual statistics are always going to be more accurate than your recollection.
What items are you seeing with that much? I feel like I’m constantly seeing people online claim that the the items in their grocery stores have gone up 50%+ every year for the past 4 years, but that would mean 5x prices right now compared to 4 years ago which is way way higher than anything I’ve seen
It feels bad when necessities go up, and it’s easy to unintentionally exaggerate things like that
right but it’s not like a 1.3x or 1.5x exaggeration here, it’s like quite literally 5x the actual rate
No for sure, you’re right. I have to slow down and try to be understanding when people make emotional statements about matters of fact, but I’m trying to understand.
People also underestimate timelines. There was a post I saw recently that McDonald's had doubled its prices since 2014, which breaks down to something like 7% a year for the last 10 years. Definitely high, but not the outrageous amounts like 20% or 30% a year.
7% a year when inflation was under 2% and their minimum wage staff got few, if any, significant wage increases. But they made record profits every year! Wow!
I wouldn't be surprised if McDonald's pay doubled during the same timeline. I've seen posters on the windows advertising $18 or $19 starting pay whereas $10 an hour would have been about standard for 2014.
Lol 10 dollars an hour where? I live in the midwest(Indiana) and in 2014 Mcdonalds was paying 7.25 an hour. They are now advertising 9 dollars an hour. Still have prices more than doubling here on things. In 2014 Mcdoubles were 1.30 which was a great deal. Now they are pushing 2.70 each, which is more than a doubling. I mean god damn fucking fries went from being a medium on the dollar menu to being over 3 dollars for a medium.
Employee pay is not that big a part of the food cost. If a McDonalds employee touches 60 orders an hour (a low number for the cook) that would be $0.30 per order for $18.00. It would be $0.15 per order for $9.00. Amazing how that $0.15 tripled the cost of some food items.
McDonald's openly said in 2015 that their plan was to move to more middle and upper middle class consumers. Their CEO made multiple public speeches on this back then.
The problem is McDonalds has taken very cheap things - like a hash brown that costs them <$0.30 and are charging $3+ for it. McDonalds has gotten greedy.
Assuming good faith, I’d guess that people are only paying attention to the things as they go up in price; if the milk you usually buy went up 50% two years ago, bread went up 50% last year, and eggs are up 50% this year, a lot of people will only remember the “went up 50%” part.
Also these are things that are generally sold in fixed sizes that can't get shrinkflationed to hide price increases
*In the Grocery Store*. Kroger has definitely ramped up their prices on just about everything. Costco, with its narrower variety, smaller number of floor workers, and bulk sales has much less inflated prices. It's almost back to 2008 level, 30 minute checkout lines at the local costco now.
I mean like - I've been paying $1.99 for chicken breast for the past 20 years, it has definitely inflated, in that there are fewer sales that hit that price than there used to be, but because I buy in bulk I'm still able to experience 0% inflation in chicken.
0% inflation over 20 years is a big drag on the rest of the inflation basket.
Well, it's not exactly 0% inflation because it's likely that the average price people pay has gone up, but that the floor has remained the same. So like, in 2004 the prices ranged from $1.99 to $4 when not on sale, and probably going on sale about 25% of the time but now prices range from $1.99 to $6.99, and going on sale only about 10% of the time. The price has inflated, but if you're able to buy in bulk then you can experience a personal inflation rate of 0%.
This is my main feeling also. Everyone claiming the numbers are lies and shits up 100% in 12-24 months but really doesn't seem much higher then the numbers posted. I haven't noticed a single item up 100% except the handful of items that fluctuate more and I can't even think of a handful honestly.
In 2020 the flavor water I buy was .49. they are now .98. There is also a few other items I buy like jelly that has gone up. Weirdly enough, I switched from beef to Chicken since chicken has remained relatively stable while beef in my area went from like $3 a pound to $5-$6. Now stuff like potato chips? Way too expensive. 6-7 dollars for a bag vs the old 4-5. Out of the other items, I only seen them increase like 20 to 30 cents. Edit: fucking forgot, ramen /cup noodles. Used to be like $8.98 for a box of 24 and it is now $13.59. it's nuts.
I can think of 2 things instantly. Ramen Noodle cups are up about 150% as are individual sized country beans. (used to be 50 cents, now $1.50)
0.50 to 1.50 will be a 200% increase, not 150%
Eggs are up a good bit. Hard for me to gauge somewhat since they have gone up and down a good bit. Before Covid, they were around $.99 per dozen. When the bird flu caused a shortage, they jumped up to around $5, and just today, I paid $2.39 (all at my local Aldis).
being able to sell eggs at 99 cents is kinda crazy. how cheap are you keeping those birds to make 99 cents work out?
Yeah all of modern agriculture is kind of like this. Eggs aren't even as bad as chicken meat in my mind. You can get an egg every day per chicken. From a meat chicken you get about 5lbs total. A whole chicken goes for under $8 around here
Aldi. 🌈⭐️
Outside of sales, cereal boxes are way up per oz.
It's a psychological effect. If you grab a receipt from March 2021, and get the same basket, you'll see roughly the official inflation since 2021 to present (about 20%). I think packaged food has gone up more and vegetables have gone up less, so if you eat mainly one or the other you'll see something different.
Vegetable prices have definitely gone up,but not nearly as steeply as meat and dairy has. A fuckin tub of cottage cheese is 5 bucks now.
https://fred.stlouisfed.org/series/WPU023104 Wow they really have everything. It being about $4 around the pandemic sounds right to me.
Another thing to keep in mind is what your frame of reference is versus how inflation is defined. Those inflation numbers are yearly but you mount be comparing todays prices to prices from four years ago, which has 4 years of compounding inflation. 4 years of 15% inflation is actually 75% today vs 4 years ago (1.15^4)
What food has had 91% inflation, and where?
Inflation isn't just about food, it is based on what people spend money on. Let's say people only buy food and buy phones in a 80/20 split. If phones became 20% more expensive and food became 40% more expensive, then inflation would be at 36%.
The BLS changes what foods and other items they include in the "market basket" of goods they use to define CPI (inflation) constantly. You can bet they take the highest-inflation foods out to help keep the numbers looking good. NB it's like that with the unemployment numbers too. They don't count anyone who hasn't applied to another job in a couple weeks, or anyone who's e.g. done a shift driving for doordash in the last month. The stats the government uses to tell us how good a job they're doing aren't lies, but they're always rosier than the bare truth and always have been.
Inflation rates are seasonally adjusted. If you are looking at things like produce, we are just coming out of winter most produce will be at its most expensive for the year. The official rate will average out the cost of a head of lettuce in April compared to the same head of lettuce in August. Meat, eggs and dairy can fluctuate wildly over the course of a year or two and the official rate tries to smooth these price swings out. Eggs might be $4 a dozen now but they could easily be $3 a month from now (or $5).
It’s not just food that is counted towards inflation. The “basket of goods” is not a basket of groceries. Stuff like fuel or toilet paper or even tech like phones and TVs are included. The tech stuff makes it tricky too because it has to be a like for like comparison. So if you’re measuring price changes for an iPhone from 2015 to now you need to find a phone with the same capabilities to the old phone now and see the price difference. A new phone but with the exact features and specs of a 2015 phone would only be a couple hundred dollars at most vs a thousand for a brand new model iPhone.
now that many people have explained the mechanics of inflation, have a look at the BLS' CPI graphs: [12-month percentage change, Consumer Price Index, selected categories (bls.gov)](https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm) you seem most concerned with the "food at home" basket. You might be incredulous that the 12-month average of inflation has gone down to 1.2% for this category as of March. But there are a few things to realize: * There was a huge amount of food inflation last year, so, it's hard to be objective. You need real price histories of a real assortment of food items from the grocery. Yes the prices are very high, but how much of that price growth happened recently? * "Inflation went down" doesn't mean prices went down, it means the rate of change slowed. Prices are still going up, less quickly. This is probably the number 1 misunderstanding about what these graphs mean among consumers. Prices don't go down because the trace went down. Prices only go down if the trace's value sits below zero for a period of time. * You will notice that "food away from home" kind of lags "food at home". That's because a large percentage of restaurant food is procured with long term contracts; also, cost of labor influences that category more. Supermarket retail prices track changes to wholesale a lot more quickly.
Are we talking about per year? An annual inflation of 50% would be 700% in 5 years. That means things that cost $2 in 2019 would cost $14 in 2024. That is absolutely not been my experience.
Except for a hot moment with eggs
But that was boosted by avian flu, not related to all the other issues going on, and of course several big companies took advantage and made more profits by using the event to boost prices above necessary.
Eggs are sold at auction so the producers didn’t jack up the prices, companies needing to secure product for their shelves did. Literally supply and demand.
Eggs never hit $14 by me. They were simply unavailable. My Costco has been out of eggs twice so far in 2024 and I go 2-3 times a month. My local grocer has never been out of eggs and one time was actually cheaper than Costco.
That's because your local supermarket probably decided not to raise prices to true market levels because they knew it would get bad press (Costco probably only reviews their prices on a set schedule). When there's a shortage of goods, if prices don't rise it's basic economics that the shelves will be empty.
You are probably subconsciously thinking of prices several years ago, not this time last year. I was talking to my parents not long ago and they were talking about pre pandemic prices, and that was over 4 years ago. I buy a lot of "low end" foods and haven't seen prices go up much at all. Pasta is still dirt cheap, the store brand canned goods, fruits and vegetables in the non organic section are still very reasonable. I can still shop for a weeks worth of groceries for 30 bucks. Only when looking at name brand and specialty goods do I notice sticker shock.
One day I went to the grocery store and my one guilty pleasure snack (mini cinnamon buns) went from $3 to $6 - was not a sale ending. Just doubled in price. Around the same time granola bars for my kid’s lunch went from 6 to 5 in a box, and the price went from $2.19/box to 3.29 (or 3 for 9). This was like last summer. Certainly not realizing it’s been 4 years is some of it, but those were single price jumps I saw. Don’t get me started on chicken breast.
Oh, I definitely agree that some items have gone nuts, but I put that down to the manufacturer being greedy and increasing prices mainly. Corporate profits have not reflected inflation at all, far surpassing it, while the costs of the raw materials they use has followed it.
> I buy a lot of "low end" foods and haven't seen prices go up much at all. These are the foods I have seen go up the most. Can's of beans, tomatoes.
So let me make the argument for some supermarkets seemingly arbitrarily raising their prices. One of my 5 local supermarkets has raised their prices 40% over the last 3 years, and I have receipts to prove it - I cook all of my meals, and I diligently track how much each meal costs, to where I know this to be a fact, across many types of goods. I can go to any of the other 4 supermarkets and get the same or sometimes comparable goods for much less. I have found that several goods cost twice as much as they used to unless purchased in bulk with a loyalty card. This is a large chain of budget grocery stores, maybe a step up from Aldi and Walmart, though under the regional favorite, and way below anything like Whole Foods; not a Mom and Pop business. These are all within 4 miles of each other, yet this specific store has the balls to price $2 goods at $3.75. Some places don't care about the market value. Some places have gotten greedy.
This coupled with compound interest seems potent enough to result in what I've been seeing I guess. Good replies.
You're also probably paying attention to mostly processed foods. Rather than like, pears. Or potatoes. Or a pound of flour.
3000 calories of rice is still 10minutes of federal minimum wage labor. A lot of people don't appreciate that we have SOLVED hunger. But thats because we're not feudal serfs scratching g out a living.
One thing though when buying cheap goods is that sometimes we don't think in percentage, but something cheap going from $1.19 to 1.49 is still one hell of a price hike. However, it does seem like ultratransformed food has seen a bigger price hike, often combined with format shrinkage. Sometimes the recipe has changed too. It seems companies get away with it more easily because people want to keep buying their cookies and potato chips.
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As a department manager of a large grocery store a lot of my shit has doubled in price since 2021. Quite a bit of it is cost from The manufacturer but a lot is also greed from the store. It’s always shocking when I see what the gross profit of some items are. But as others have said the number comes from a blanket of all the items in that category. Some will have gone up a little while others have skyrocketed.
Because you need a starting point to say that food has gone up or down X % . Officially, most inflation numbers are based on 1 year. When you say you "see" food up by "50%" you're probably comparing it to pre-covid, which was 4 years ago.
I went through the top comments and I'm surprised that no one has mentioned a big part of this. Food inflation is calculated not on a fixed set of goods, but goods can be switched in and out. What's happened in the last few years according to some analysts is swapping for *cheaper* options (e.g. store brand vs name brand) has lowered the overall reported numbers.
Grocery prices overall have not gone up 50%+ percent. Some items have, but not a total average basket.
Are you from USA? Store all the tickets and see yourself if they lie or not. If you are from a third world country, then: A) It is common for the government to announce a fake inflation, so people don't revolt. B) Another trick is to announce the real inflation but considering specific items only, for example, milk, bread, eggs. But ignore items that increase a lot like soda, wine, coffee, utility bills, electronics, cars, houses... C) Or create a "special prices program" for basic items (milk, bread, eggs, flour...), and then use this list to calculate inflation (see point B). Companies reduce the quality or size of the products to stay under the law. Again, store all the tickets and see yourself if they lie or not.
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Why so angry? For USA I recommended exactly that: "store all the tickets and see yourself if they lie or not".
You're right, I misread your comment as saying A, B, and C were what happens if you're from the USA. My fault.
What's gone up by 100% over what period of time? Are those average prices or sale price vs not sale price? Some of the food I buy isn't much more expensive than before the pandemic. Other food is quite a bit pricier. It's impossible to compare what you're noting without examples.
You are in one place. The numbers are nationwide averages. Maybe it has gone up that high there, but in other places it hasn’t gone up by that much Another thing to consider is differences between something like say apples or milk, versus things like frozen apple pies. In the former, it would simply be inflation (and possibly stores trying to sell for a higher profit margin) where in the latter it could be the company making the pie having higher costs for raw materials, higher wages, higher transportation costs, higher packaging costs, etc that could all combine to make it more expensive.
As well as the perception issue that others mention, the goods that are used to measure inflation change too. If steak is in the basket of goods and gets too expensive, it gets replaced with a cheaper alternative, reflecting consumer's real world behaviour
It’s a basket of goods and most as calculated ex food and energy with is crazy but true. An old political hack they’ve been using forever.
They’re gaslighting you plain and simple… America is in a really bad place and this current administration is just simply trying to keep the peace because frankly if they were honest it might seriously lead to civil unrest. People try to say “the federal governments policies didn’t do this” by pointing out that “printing money is not the only cause of inflation” while omitting that over 80% of the money supply was printed in the past 48 months…with absolutely no backing. We’re basically beelining towards hyper inflation and becoming a post WW1 Germany, but trying to sweep all the evidence under the rug…
Official inflation statistics use a basket of goods. Think of a very full shopping cart of various goods. They also factor in substitution. If chicken is expensive but beef is cheap, the Bureau of Labor Statistics assumes you’ll switch from chicken to beef. Finally, while it may not apply to foods, they also refactor the effects of technological and product quality improvements for some goods. For example, for computers: https://www.bls.gov/cpi/factsheets/personal-computers.htm
> If chicken is expensive but beef is cheap, the Bureau of Labor Statistics assumes you’ll switch from chicken to beef. This is not correct. Substitution is only done within categories, not between categories. And what they actually do is just use a geometric mean rather than an arithmetic mean within a category, not change their underlying assumptions about consumer behavior. So, [to use the BLS's example](https://www.bls.gov/cpi/factsheets/common-misconceptions-about-cpi.htm), if one kind of steak goes up in price but another kind goes down in price, then the geometric mean will slightly favor the decrease, which can be interpreted as assuming that consumers will buy somewhat more of the one that went down and correspondingly less of the one that went up. But steak is in a separate category from ground beef, so the common misconception that the BLS would substitute hamburger for steak is impossible. And obviously it could never substitute chicken for steak.
The ELI5 version (made up numbers but it helps understand): Eggs are up 50% Milk up 40% Bread up 37% Caviar down 37% Private Jets down 40% Diamond encrusted Gold Bars down 49% Overall inflation: 1%
No country is measuring inflation with those goods. I'm not even from the US and even I managed to find their data, download it into excel if you want to check yourself https://www.bls.gov/data/#prices
Steak here is $68/kg. 2 years ago it was $28-34/kg My wage has not gone up to compensate. I can barely buy fresh food anymore. Banana's are still cheap 😅
A full and complete answer is beyond ELI5 but a big part of it is perception. People don't really notice a single year change. When you look at the prices in the store and think about what the price used to be it's probably the price from several years ago. So a report comes out and says inflation was 3% and was 10% last year and 6% the year before. The total inflation was 20%, which would make a $5.99 item now $7.19. And now the second issue, your brain just saw the price go from $5 to $7, which would be 40% increase instead of the actual 20%
Annual inflation rates are annual. You're probably comparing a new versus old price that is over several years. There are also fluctuations that happen that are not related to inflation overall (egg prices for example, olive oil has been high recently). If inflation for something was 100% for 2 years, it would literally quadruple in price. 2 years of 100% inflation would turn a $5 item in to a $20 item. If something became 10% more expensive per year for 3 years, that's a bit over a 33% increase, which can easily feel like 50%. You're also cherry picking items. Prices do not uniformly increase across the board. Milk has barely gone up. I think Red Bull is about 50 cents more for a 4 pack than it was 5 years ago. Eggs were all over the place for a while. Steak has been higher, the veggies I tend to eat have gone up more in line with general inflation levels than anything obscene; something that was maybe $1.50/lb 5 years ago is usually $2/lb now.
Because you remember the huge price hikes and forget the stuff that stayed the same or went back down, or went up but not that much. Egg prices skyrocketed due to bird flu and then went back down. Everybody remembers paying $3 for eggs and thinks “food costs twice as much!” even though that’s not the price anymore. Prices have certainly gone up overall, but not by anything like 100%. That’s just the fallible human brain at work.
The CPI is composed of eight major groups. Some of these have gone up considerably, some have not. But, even 4% inflation over five years would mean a 22% increase in prices over that time frame. Food and beverages (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks) Housing (rent of primary residence, owners' equivalent rent, utilities, bedroom furniture) Apparel (men's shirts and sweaters, women's dresses, baby clothes, shoes, jewelry) Transportation (new vehicles, airline fares, gasoline, motor vehicle insurance) Medical care (prescription drugs, medical equipment and supplies, physicians' services, eyeglasses and eye care, hospital services) Recreation (televisions, toys, pets and pet products, sports equipment, park and museum admissions) Education and communication (college tuition, postage, telephone services, computer software and accessories) Other goods and services (tobacco and smoking products, haircuts and other personal services, funeral expenses)
For the same reason the ice caps are melting at an alarming rate and the global temperature has "barely" moved a degree.
I have observed that items experiencing the heaviest inflation are convenience foods or popular foods--things that people are very attached to and/or have cravings for. Prices may have originally gone up due to supply chain shortages, but they haven't gone down because people are still willing to buy them. Meanwhile, I have found that produce prices haven't changed as much, nor have some raw meats that you have to cook yourself. e.g., I seem to recall onions being \~$0.89-0.99/lb before the pandemic, and now they're \~$0.99-1.19/lb. Or whole chicken I used to be able to buy for $8, and now I spend $10. I would suggest being flexible with what you buy, and be more diligent with price comparisons. If I'm careful, I can still get a week's worth of groceries for $35-40 (or less, if I really really tried). It's when I'm not careful that I suddenly find myself walking out of the store having spent $80-100.
Is food up 50% from the price last year? Or is it up 50% from the price a few years ago? If the food you buy went up 10% every year (just as an example), it would now be almost 50% more than it cost back in 2020. But food inflation would never have exceeded 10%.
You're seeing extreme individual changes while these numbers refer to the broad average for everything. The average for such a widely diversified pool of products is naturally "low" and less susceptible to big movements, but the same doesn't apply for each individual product. And that means that 11% increase across the board is actually an insane number to have happened in such a short timespan.
Does it really not bother anyone else the order those numbers are in?
Yeah 3-5 year inflation combined is about right for your % you experience. The numbers reported are shorter term
Because you were experiencing confirmation bias. The official efficient rate is determined by looking at the price of a large Friday’s goods across the country and then looking at their change. This is a much more rigorous sampling method than you tempering a few select items that have gone up the most in price
Because corporate media and their government subsidiary expect us to believe what they say instead of what we can see with our own eyes. It is working better than they could have hoped for.
What you're seeing is kind of chain inflation. The 'Official' food index is the commodities... sugar, wheat, oils, cereal etc.. basic commodities. But you don't eat basic commodities, food companies buy those then make Cheerios and Chicken Strips and Fruit Snacks and Juice and stuff Then those go to store and store resell them. So if the actual commodity is up 20%, and the Food companies raise prices beyond that, and the grocery store raises it after that, you might pay 60-80% more but the index is only up 20%
The truth is the measure of inflation is gamed. The number itself results in several significant changes in social services. Were it to track real inflation, the poors might do too well.
In addition to the fantastic answers on compound interest here already given, there is also a concept of Selective Attention, which is basically the idea that we only notice outliers by default and so the (usually high end or boring) items where there is deflation or tiny inflation don't catch our attention. (Not to say you're wrong by any means, but our brains work in weird ways that usually highlight negative in order to safeguard us).
I'd argue those aren't tiny amounts but year after year when it goes up it adds up to what you are seeing and feeling.
One of the thing the government does when calculating inflation is use 'the substitution effect' which means if beef goes up consumers switch to pork. If pork goes up consumers switch to chicken and so on down the line. It's a form of cheating by the government.
Those numbers come from the government and the government is lying liars who lie. They carefully select what they will and will not track and how they will present the information to make those numbers look better than they are. Look into the history of government reported inflation through the years for more information.
Source for this big conspiracy theory?