"The gap between everyday experience and the yearly inflation rate of 1.3% in August is massive. The price of the stuff we’re buying is rising much faster, while the stuff we’re no longer buying has been falling, but still counts for the figures," writes Wall Street Journal columnist James Mackintosh.
He continues:
Start with recent supply and demand. The cost of food at home, where so many of us have been spending our time, was up 4.6% in August compared with a year earlier, the biggest rise in almost a decade. In deserted workplace and school cafeterias, food is 3% cheaper.
Food prices move around a lot, but the same pattern shows for many things sensitive to us sitting at home on Zoom. Few home workers need a new suit or dress (down 17%), makeup (down 3%), hotel room (down 13%) or air ticket (down 23%).
In vogue: sitting at home in your pajamas (men’s nightwear is up 4%), cycling (bikes up 6%), reading for pleasure (books up 4%, newspapers up 5%) and making things (sewing machines and fabric up 9%, cameras up 4%). Medical care is in demand (up 5%), while higher education is much less attractive (tuition fees up 1.3%, the lowest since data started in the late 1970s).
Note well: As the things we don't buy start to bottom out and stop their decline at lower levels, the price advance as measured by general price indexes will start to climb much more aggressively. The Federal Reserve does not seem to be aware this will occur.
-RW
I've decided to beat inflation by stopping eating.
ReplyDelete