While going through my receipts and budget yesterday, I paid particular attention to some items for which the cost has jumped up in recent months.
Analysts keep saying that deflation is still officially the name of the current game, but here are some real examples of costs going up.
They can keep saying “deflation” all they want, but to me it’s looking like inflation is already starting to seep in to everyday costs.
Not to mention the fact that I haven’t seen any of my grocery prices actually drop over the past year, which is what price deflation would entail.
Here are just a few examples. This is not a scientific list, just prices I found at random to have increased.
Price Inflation: Rising Consumer Food and Entertainment Costs
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Box of Earthbound organic lettuce: was $2.99 (August) – NOW: $3.49
-increase of fifty cents (before tax); representing a 16% price increase
Veggie fajita burrito at Chipotle: was $5.95 (June) – NOW: $6.05
-increase of ten cents (before tax) in July; representing a 1.6% price increase
Earthgrain 100% whole wheat bread: was $2.79 (June) – NOW: $2.99
-increase of twenty cents (before tax); representing a 7.1% price increase
1 Ticket to AMC movie theatre, evening show: was $10.50 (July) – NOW: $11.00
-increase of fifty cents (after tax); representing a 4.7% price increase
1 Small popcorn at AMC theatre: was $4.75 (Sept.) – NOW: $5.25
-increase of fifty cents (no tax); representing a 10.5% price increase
True, these are only five little items, and when compared to your daily gasoline costs or heating bill may not seem like much. And, of course, ten- and fifty-cents each are not huge increases. But that’s the point. Price increases all add up, insidiously, without you realizing it. I didn’t notice these increases until I examined receipts over a period of time. Usually, I just examine receipts of bigger ticket items.
Make Your Own, Personal Consumer Price Index (CPI)
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Forget the official CPI numbers, which are tactfully adjusted anyway and don’t include energy costs. Make your own consumer price index by tracking the costs of the items you by most frequently, or the important items you buy less frequently. If you regularly budget, you are probably already doing this anyway. But if you aren’t, I can tell you it’s a useful, eye-opening exercise.
Create a basket of 10, 15, 25 items that you buy most often, and this will be your “index.”
The key here is to keep the same items in the index over time, so make sure you pick items you always buy, preferably at least once a month. Keep track of the index for at least a year and see what you find.
Especially now, when we’re officially in a deflationary environment, it will help to know what you’re really paying for everything, especially those items that the official CPI index leaves out.
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{ 4 comments… read them below or add one }
Inflation vs. Deflation all depends on what you’re talking about..
The price of eggs and milk as well as the money supply are inflating, but wages/incomes and credit are deflating. I think that the most common and meaningful way to look at it, besides CPI, is income and in that sense we are in a deflationary mode.
I bet the farmers aren’t getting paid any more.
@Joe – inflation doesn’t simply mean “increase,” though – it’s a technical economic term and refers to the money supply, as I’m sure you know, which is what ultimately causes price differentials. So while one can say that incomes are falling and prices are rising, it doesn’t mean that we’re experiencing both deflation and inflation, since both can’t be happening to the money supply at the same time. I admit I don’t help things in the article, though, when I call it “price inflation.” It’s simply price increase, strictly speaking.
i said give me five example why you dont wnt give me son of bitch