Weekly Updates
Weekly Updates
- Food price inflation brought the US presidential election to the aisles of WalMart. This makes political rather than economic sense—food prices have limited importance for US living standards, but the prices of frequent purchases distort peoples’ perceptions of inflation. No one notices that televisions have never been so cheap. Everyone remembers that the daily cookie costs more than ever.
- Nationally, food prices in the US are still rising. That matters, because consumers (and voters) tend to remember price levels. Moreover, people consider the old price level to be the “fair” price level, and that old price sticks in the mind for eighteen months or more. Any higher prices are mentally labelled “unfair.”
- Meat is more expensive than eighteen months ago, and egg prices have soared. Other prices have fallen. Apples and seafood are in bear markets. Beer drinkers experienced price increases that wine drinkers avoided. The composition of the shopping basket makes a difference to inflation perception.
- The experience of food price inflation also varies by region. Every month for the last eighteen months, food prices have fallen somewhere in the US. Like everything else in US politics, food prices are polarizing. Whether food is a political problem depends on what US households buy and where they buy it.
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