Inflation is a subjective number
By now you’ve probably heard the bad news about inflation: Thursday’s consumer price index, which measures a predetermined basket of goods, shows prices climbed again in September, up 8.2% from last year. Core inflation — which strips out food and energy costs — was 6.6%.
All these little details we home in on about the basket of goods or core inflation versus overall inflation … they’re a little potato-potahto for the consumer. Because regardless of the numbers, inflation feels different to different people.
Nancy Hutchin feels anxious every time she walks down the fish aisle at the grocery store.
“Salmon. I love salmon. But I used to not worry about it too much,” she said.
Hutchin is 73 and widowed. She’s retired and lives in Silver Spring, Maryland. Before inflation ramped up, Hutchin said, she let herself have these little luxuries. Now she’s replaced salmon with chicken thighs.
“You know, I’m not big on chicken thighs,” she said.
Hutchin has been making trade-offs over the last year. Lately, it just feels like those trade-offs are everywhere.
“It hangs over you when you go out to lunch, when you think about buying a new pair of trainers,” she said. “And you go, ‘No, no, I can make mine last.’ A couple years ago I would have gone, ‘You know, you worked for 38 years. Get the new pair of trainers!'”
People message me about the sticker shock items they’ve been seeing. Plane tickets, Fritos chips, heating bills, day care, cat litter. It’s fair to say a lot of people have some inflation anxiety.
Carola Binder, an economist at Haverford College, said how much anxiety depends on what you’re buying.
“Every person and household does have their own basket of goods, so no one is experiencing exactly that inflation number that you see,” she said.
What’s your rental market like? Do you need a new car? Do you fill up on gas or take public transit? Depending on your answers, your anxiety about inflation might feel a little better than reality, or a little worse.
Either way, the longer this goes on, the more permanent the problem feels to consumers.
“And maybe it makes them start thinking more about how they’re going to have to change their behavior to adapt to what looks like a more lasting situation,” Binder said.
Michele Paige, who’s 36 and lives in Pine Bush, New York, has changed her breakfast behavior. Her granola bars have doubled in price, so she’s settling for instant oatmeal.
“You’re just kind of dragging your feet to the kitchen not looking forward to it,” she said.
Paige said she knows this isn’t a life-or-death situation. But starting her day with a granola bar used to give her a little joy. Starting her day with oatmeal just reminds her of her budget.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
