If inflation is down, why is my grocery bill so high?

Rogé Karma explained this in an essay in the April issue of The Atlantic.  I certainly have noticed an amazing increase in my grocery bill.  Karma explained that when economists measure inflation they refer to an index of goods and services the typical household buys annually.  Since the average household spends about 1/3 of the annual income on housing (mortgage or rent), that determines 1/3 of the index.  If big ticket items like refrigerators or TVs go up in price we can postpone the purchase.  And since we don’t buy big ticket items often, we may not even remember how much we paid the last time.

What we buy at the supermarket is only around 10% of our budget, but it is something we buy almost every week.  When food prices rise (and they have risen quickly), we notice it immediately, and we notice it again and again.

Thus, the Administration or the Federal Reserve Board can talk about inflation being bought under control, but as long as those food prices remain high, it all sounds very hollow.  Once the food prices are higher, a drop in the inflation rate doesn’t mean much.  If you compare your current grocery bill to last year’s bill, an inflation rate that has dropped to 1% doesn’t matter.  The grocery bill won’t return to last year’s level.  And you think the economy is bad even if employment is high and wages are going up.  Karma says workers think they deserve the increase in wages, but it feels like that increase is unfairly taken away.  Therefore, the economy sucks.  Chances are you will blame the Administration.