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%?

Question

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

Answer 1

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%