Sure, but I'm not inclined to believe that number on its own. Practically, even the cheapest grocer like Aldi could turn out to be expensive than the quoted $3.37.
Rice and beans - been my staple for most of my life - isn't too much more than this. Two cup dried rice + two can beans is around $4 and that is generally enough for me. Although it is much better with a few eggs and some hot sauce or salsa as well.
The CPI is, for largely good reasons, primarily tracking things other than groceries, so it's arguably indeed pretty useless in comparing these over time.
I’m always intrigued by the apparent total disconnect between official inflation figures and observed cost of living. Our weekly groceries have doubled over the past 3-4 years but inflation is in the low single digits so what’s it measuring, exactly? The answer, of course, is “whatever the current administration wants it to.”
Inflation is a tricky measure to understand intuitively because, as a rate of change it can compound faster than you think, and, as measured it is basically always a lagging number. 9-10% inflation compounding over 3-4 years is going to be nearly 50% increases in prices, and 100% in something like 7 I think.
Official food inflation numbers put out by the US gov after Covid rocketed up to (a very unflattering) over 11% by mid 2022, and have only very recently gone back down to reasonable numbers, meaning you saw large increases in food prices that have only recently stopped increasing. (I don’t think the current administration would want to put out those numbers before the midterms if they were cooking the books).
They "cook" it by substitution of their basket of items - swapping steak for mince. It makes sense on the one hand, because it's actually what people do in real life, when things get expensive, they substitute. But the CPI measure doing the same means the quality of the basket dropped?
The situation is complex, but I suspect that is the mechanism that anchors inflation to wage inflation rather than monetary inflation. Prices are the signal for when something should be consumed less - so anything with a price rising faster than wage inflation tends to be downweighted and anything with a price rising slower than wage inflation is kept in the basket.
If inflation tended to match to wage inflation then the scheme would be valid, but it doesn't. The newly printed money ends up unequally distributed over the economy, tending to end up with asset owners.
I don't understand why people even pay attention to the CPI. There are direct measures of how much money is being created, we can all just use that rate instead.
>I don't understand why people even pay attention to the CPI. There are direct measures of how much money is being created, we can all just use that rate instead.
Because it's more obvious how one might try to use CPI to project future expenses.
"you saw large increases in food prices that have only recently stopped increasing" as quickly
Inflation is still happening, just not as fast. It doesn't compensate for the fact that prices are still up significantly from what they "should have been".
Inflation is the change in the Consumer Price Index, calculated by the US Bureau of Labor Statistics. They explain the difficulty in representing accurate cost of living:
>The CPI frequently is called a cost-of-living index, but it differs in important ways from a complete cost-of-living measure. We use a cost-of-living framework in making practical decisions about questions that arise in constructing the CPI. A cost-of-living index is a conceptual measurement goal, however, and not a straightforward alternative to the CPI. A cost-of-living index would measure changes over time in the amount that consumers need to spend to reach a certain utility level or standard of living. Both the CPI and a cost-of-living index would reflect changes in the prices of goods and services, such as food and clothing that are directly purchased in the marketplace; but a complete cost-of-living index would go beyond this role to also take into account changes in other governmental or environmental factors that affect consumers' well-being. It is very difficult to determine the proper treatment of public goods, such as safety and education, and other broad concerns, such as health, water quality, and crime, that would constitute a complete cost-of-living framework. Since the CPI does not attempt to quantify all the factors that affect the cost-of-living, it is sometimes termed a conditional cost-of-living index.
While I also find grocery prices in the US extremely bewildering/concerning (why are they so damn expensive!?), I think it does make some sense to benchmark more than just food.
For example, consider a hypothetical world in which grocery prices doubled but cost of housing for some reason halved – would you say that that's high or low inflation?
> For example, consider a hypothetical world in which grocery prices doubled but cost of housing for some reason halved – would you say that that's high or low inflation?
That is grocery inflation and housing deflation. These are just words that mean "the prices are going up" and "the prices are going down" respectively. There's no spiritual or metaphysical meaning behind them, and they don't say anything about the causes of prices going up or down. One can argue why the prices are changing, and maybe some or all of the answer is money supply, but one cannot argue if prices are up "because of inflation" or not -- if prices are up, there is inflation, regardless of the "root" (scare quotes because it's unclear that there can be such a thing as a root cause in something as complex as the global price system, which is a strange loop if there ever was one) cause.
I got tired of this so I started shopping at a local Aldi. It is amazing how much higher food prices are at other stores. They make Walmart look expensive, even when looking at Walmart’s store brand.
According to the White House, food inflation over the past year was just 0.3%, as that's the number they used to adjust SNAP (food stamp) benefits. Wonder how many low income votes that cost to keep rosy numbers in the press.
Makes no sense to have a CPI that just confirms what consumers are already feeling. Rather it should serve as a rebuke to personal experience: data don't lie, you're imagining things.
to defend the op - the op is possibly experiencing a grocery monopoly in a food desert. there are no datapoints that track grocery competition per zip code, AFAIK.
Do you have any evidence for your claim or is it just a conspiracy theory? Of course the new administration will try to cook stats, hopefully the bureaucracy can resist them.
Inflation measurements describe what they measure in detail. Food inflation isn't necessarily the same as overall inflation.
True inflation is money supply inflation. Doubling the amount of money (diluting the total value across more monetary units e.g. dollars), halves the value of each monetary unit, doubling prices.
This is why hard assets, like gold, housing increase in price at approximately the same rate that the banks increase the money supply (historically the number of dollars doubles every decade, other currencies are even worse).
If people saw the same increases in consumable prices as hard assets then they would be become aware of the falling value of the currency and the currency would quickly collapse in value as they stored their wealth in other things (hyper-inflation). However, the continuous optimisation of production through efficiencies of technology and associated automation means that consumables take less and less human time/effort to produce and so are going down in value at rate of around -5% year. This offsets the 7% devaluation of the dollar to give an overall price increase of consumables of 7-5 = 2% which is a level that the population finds acceptable without losing faith in their currency.
However, in recent decades the recent struggle and failure to keep devaluation of the dollar at 7%/year means that the official inflation figures need to be massaged, and so hard assets are removed from the basket goods used in the algorithm (e.g. housing related costs) and more consumables that have benefited from increased automation and reduced value are added.
If you run the algorithm used say 15 years ago, you'll find that it produces a much higher inflation figure than the one used today.
The outgoing administration claims food inflation was 0.3% over the last year. Do you think that's accurate or do you think they were cooking the stats? Can you answer without partisan glasses on?
No, the Consumer Price Index shows (seasonally-adjusted) inflation of 0.3% over the last month. The increase for the food category over the past year is 8× higher than that.
It's also important to consider where they live, the price of food can vary wildly depending on where you live, so adjust accordingly to your local general food-prices.