Why do the “official” numbers on food inflation state it’s gone up by tiny amounts like 8%, 19%, 11%, etc. but most of the foods I see has gone up by a minimum of 50%, 100%, 80%?
In: Economics
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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.
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.
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.
Grocery prices overall have not gone up 50%+ percent. Some items have, but not a total average basket.
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 😅
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.
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
Because they are looking at grocery store prices (eg, Walmart) for a ‘basket’ of goods the average citizen might buy.
Not restaurant prices for prepared-food, which is *severely* impacted by increases in the minimum wage (market or legal – doesn’t matter).
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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