Restaurant and packaged food (e.g., cookies, frozen meals) prices up an average 30% since 2020 is what I usually think too, but I also think bargains have disappeared, which is probably harder to capture.
It feels like far fewer restaurants have lunch specials than in 2020, for instance, and a lot of cheap restaurants have either raised prices to the norm or closed. Bars and casinos having discounted or free food to get you to drink has gone out the window (even where legal). And looking back 20 years, it feels like far fewer restaurants have small and simple orders available.
For instance, you used to be able to go into a diner or other casual restaurant and get a hamburger or other sandwich with no fries or side. That’s harder to find now. So is cheap, unremarkable coffee and cheap breakfast items, like small pastries or two-egg plates.
Similarly, it’s harder to find a small car, a house or apartment without central air, a 15 inch TV (though TVs have gotten cheaper), etc.
I think the big one is the people who produce inflation statistics struggle to capture increases when products change, particularly shrinkflation.
The ONS (Who produce the UK inflation statistics) specifically noted limitations in their methodology because when a particular product (whether that's a particular brand, or specific size) is discontinued, they replace it in their subsequent basket with a similar item for measuring inflation but don't measure the change in inflation from the change in product.
For example a 25p can of peas may be withdrawn from sale by the manufacturer, so the next month ONS would switch to checking the price of a 30p can of peas (the next cheapest can). The fact that people who were buying that can of peas now have to pay 5p more for peas is never captured in inflation.
This is definitely part of the problem, and another issue is quality decrease. Sure, maybe a given item has only increased 80% in price, but perhaps now the quality has decreased so that ultimately you are comparing apples to oranges.
The fun thing with quality is that statistics agencies are in fact trying to include quality change in their inflation calculation (it's called hedonic adjustment) but AFAIK they only do it for “objective quality” increases (like when CPU clock frequency increases or Disk Size increase), not when actual quality decreases.
BLS personnel don't "struggle" to capture shrinkflation. They are well aware of the issue and always normalize prices by actual weight or volume. Have you read their documentation?
Yeah - I distinctly remember back in 2006-2007 (My early college days) getting a 2 for $2 deal at McDonalds - 2 bacon, egg and cheese biscuits for $2. Now one biscuit (normally) is $3.89 and they run 2 for $5 specials, but seemingly way less often. Back in the day, the special was ran literally all the time, but even still the cost of the biscuit was under $2. And this is 7 years past 1999.
The Big Mac Index shows the price of a big mac in 2000 at $2.24, and now at $5.58, so that would put $1 in 2000 at $2.49 in 2020 which feels a lot closer to the actual number...but still low because everything "around" the entree has also increased similarly, if not more.
In about the same period Taco Bell had the .79/.89/.99 menu options. You could feed a family of four for about $10. Now even the $5 combo box is becoming rare.
One thing that happened since 1999 is the rise of price discrimination at fast food restaurants (well price discrimination in general, but fast food is easiest to see). If you have the App, you can get that $5.59 big Mac with a free fry and drink. Without the app, the meal is probably close to $10. (Just a made up example, but in general app coupons seem to often save 30-50% over not using coupons).
yeah, people are being forced to buy features or addons, which adds to the cost. this is another way to pass on inflation to the consumer marketed as a 'good deal', when it isn't. instead of an economical small car, you have to buy a bigger car which gets worse mileage and full of unwanted stuff.
It’s not anecdotal, search online for old copies of menus from popular chain restaurants.
Inflation has been retconned (i.e “Burgers were always $15, what are you talking about?”) They don’t want you to notice as your wealth is slowly stolen through the loss of purchasing power.
The gp used poor terminology. Inflation doesn't impact wealth nearly so much as income. The idle rich draw their income from capital gains on investments in the things that are becoming more expensive and are largely non negotiable. People must spend wages on shelter food energy and probably transport. They will pull back on things they enjoy but cannot afford now. The wealthy will continue to purchase what they want when they want. That is why selling high end luxury goods is a much more stable option than selling thebthings that are luxuries for those who get their income from wages.
> The idle rich draw their income from capital gains on investments in the things that are becoming more expensive and are largely non negotiable. People must spend wages on shelter food energy and probably transport.
Wages have gone up in real terms (how the fed measures inflation). Food, energy, & transport have slightly under-performed inflation.
i.e. there's no way to slice it - the average laborer can afford more food & labor now than in the past.
The linked site differs from Case Shiller - saying that housing has also under-performed inflation. I'm interested how they arrived at that.
Housing is the real problem - and the vast, vast majority of housing in the US is owned by individuals and mom-and-pop investors, not corporations & billionaires.
The idle rich cannot be blamed for our problems in housing - though they can be blamed for other things. On housing, we can only blame ourselves, voting aggressively to curtail development at every opportunity.
I'm suspicious of the food numbers too. The CPI substitues things like hamburgers for pot roast. The price of a healthy diet has increased, the price of a dose of Soylent green is less than the price of what a healthy diet used to be. And I think that is what they are reporting.
Energy is cheaper, but we need more of it with years of back to back escalating extremes for both heating and cooling. Moving somewhere that isn't an impact gets into the housing issue.
And then medical and education are out of control.
Edit: to clarify, I am not laying all this at the feet of the idle rich, nor do I think idleness or wealth are bad things. They are great things we should all strive for for ourselves and others. I lay it at the feet of all of us who have made bad decisions, but some are more responsible than others, and many of those that shaped the policies that lead to these issues are wealthy as a result.
You are living in such a society. People who bought BRKA shares 55 years ago and just sat on their asses have done immensely better than those who worked their asses off.
Wages have not stagnated. It's been a defining feature of our COVID inflation that inequality stats have gotten better.
Specifically in HCOL coastal cities, we've seen increases to minimum wage, adjustments to the "tipped minimum wage" laws that mean business needs to cover more of the wage, and finally.. labor shortages causing restaurants to pay over even those increased minimums.
It wasn't long ago NYC minimum wage was under $10/hr, with "tipped minimum" being $7/hr.
Now you have some restaurants paying $20/hr to get staff.
The Whataburger I got way-too-frequently for just under $6 in 2001 is like $10 bucks now.
MSRP of a 99 M3 = 46k; 2023 stating at $74300.
Outside of housing and gas I'm hard-pressed to think of anything that's more than double the cost. GPUs, I suppose, but that's a weird hobby transition + a lot more industrial uses.
That said, housing+gas == huge parts of people's day to day lives, obviously.
The big mac has more than doubled since 2000 according to the Big Mac Index: $2.24 -> $5.58. I think the issue is the high end didn't rise nearly as much as the low end. Your BMW is a good example..a 2000 Honda Civic: $10,750, 2023 Civic: $23,750.
Yeah, but the fast food example has a large price discrimination component. Only those not using the app pay the high prices. Last Big Mac I bought was $2.50 (earlier this year).
Civic is more interesting, since the 2023 base-model Civic has far more technology, far better safety features, automatic transmission, and is quite a big larger than the 2000 model. Wouldn’t be surprised if the 2000 base model Civic didn’t even have power windows. That being said, if all you want is basic transportation, then your choices are much more limited than they were in 2000.
It's an artifact of how the measurement is made, as it accounts for insurance profits. While a good proxy in normal times, corona sent this measure into a wild rollercoaster-ride. However, it is generally a good idea not to change the method of measuring because you do not like the measures in the short term. The most important measure is the headline number (and MoM is more informative than YoY in these times), as it is the basis for actual politics. The headline number absorbs a lot of craziness in the underlying measures.
It's included in CPI, though, right? If so, doesn't that mean this "artifact" has improperly affected the CPI making it look like inflation hasn't been as bad this year as it actually was?
Taco bell is the most ridiculous now. If I eat there I will only order a $2-$3 "value" burrito. The moment you order any kind of combo, you are out $10+.
> I ate a meal with a drink at Taco Bell for $2-3.
Taco Bell in particular has gone mad, I don't see how they can survive with current pricing. I used to go often, knowing it wasn't good quality but it was oh so cheap.
Today their prices are so high that I can go to a local taqueria and get a giant burrito with far better and fresher ingredients and friendlier service for less money than a few mystery meat tacos from Taco Bell.
So on the positive side, I now only frequent the local business with good quality food.
Compounding is the 8th wonder in the world for this reason. It's amazing how in the span of a few decades how much prices have gone up. Except for clothes and electronics, everything seems to have gotten way more expensive compared to cpi. but even iPhones still cost a lot. The situation seems out of control for things like tuition .
Compounding interest on savings for most of us is much less than inflation, so the purchasing power of work done gradually dwindles to nothing over time. Pretty depressing.
The really depressing thing is it's not just a diminishment of purchasing power, it's a transfer of purchasing power to those who first get to spend the newly created money (which tends to be financial institutions and people with the wealth/connections to gey big loans). Which needn't necessarily be the case, if the inflation occurred via evenly distributed "helicopter money" rather than the current approach.
This is maybe true if you only store money in cash equivalents. If you bought stocks, housing, or almost any other productive asset you'd easily beat inflation over your working lifetime.
I think we’ve finally hit the point where compound interest on savings is outpacing inflation (at least in the US). Savings accounts at 5%+ interest are now widely available as long as you avoid the big banks like Chase and BofA. Meanwhile inflation is still elevated, but at least its well below 5%.
OTOH, the prior 10+ years even when inflation wasn’t very high, 1% or so interest rates meant savers were falling farther and farther behind.
This probably varies from place to place. A high-quality double cheeseburger in my area can be had for $6.19, and adding tomato is only a little extra. (I checked prices a minute ago, so these numbers are fresh.)
Carl's Jr./Hardee's even advertised "The $6 Burger," which sold for about half that, as a way to say, "Look, you can get a restaurant-quality burger at our fast food chain for leas money."
Anecdotally, I can remember a burger at a restaurant was about $6 in 1999. Now average seems to be 15 to 20.
I would believe that everything is about 3x the price from 20 years ago. This chart seems to say the average is less than 2x which I don't agree with.