The other day, Miss D. and I dropped into a local Sam's Club to buy a few things we needed. They weren't particularly luxurious items; a few cheeses, some sausage, that sort of thing. I didn't give them a second thought, until it came time to pay for them. Half a dozen items (bought in bulk, to be sure, but nevertheless, only six of them) came to rather more than $100. That was a slap in the face. Even a year ago, I could have bought (and did buy) those same items for rather less than $100. The rise in their prices over less than half a year is startling.
I've noticed something similar when spending money on routine items in many stores and restaurants. For example, even five years ago we could eat out as a couple in a "normal" restaurant (pizzeria, meat-and-three, burger joint, the local Thai eatery, whatever) for about $20-$30 for the two of us. Today, we're lucky to get away with less than $40 for the same meal, and it's frequently close to (or even over) $50. Auto tires? The last tires I bought for my pickup truck cost me less than $130 each, which I thought was expensive, even though they were a premium brand and I bought them from a vendor known for low prices. Today, just four years after I bought them, you can make that $200 per tire from the same vendor. That's an increase of about $70 per tire in four years, or an average of $17.50 per year.
Government figures for inflation are risible, of course. They're deliberately skewed to hold down the "official" rate, because that saves the government money when it pays out inflation-linked benefits such as Social Security, etc. However, even using lowball government calculations, inflation is moving upward too fast for comfort. David Stockman pointed out last month:
... core inflation is accelerating rapidly.
To wit, on a year-over-year basis the CPI less food and energy printed at "only" 1.8%, but that embodies a huge base effect owing to the aberrational plunge in telecom services last March. By contrast, on a three month rolling basis, the core CPI has risen from 1.9% in November, to 2.3% in December, 2.9% in January and 3.1% in February!
In fact, the 3.1% three-month annualized rate in February was the highest it's been since before the Lehman induced melt-down in September 2008.
Moreover, we are talking about "core" CPI here with no wild oil price fluctuations confusing the picture. And that also means that when the huge telecom adjustment drops out of the CPI less food and energy base next month, the Y/Y figure will also sharply accelerate.
There's more at the link.
As I said, ignore the single-digit inflation numbers given in the above excerpt. They're calculated according to government formulae. If you calculate them according to actual increases in prices (e.g. the Chapwood Index) or according to historical formulae, before political meddling interfered (e.g. Shadowstats), they look much, much worse.
In 2016 I did a detailed two-part study of inflation, which highlighted the problem, looked at the alternate inflation figures provided by Chapwood and Shadowstats, and described the reality of our current position. If you didn't read them then, or don't recall them, I strongly urge you to do so. They're brutally factual. I defy anyone to contradict the points I made there, because they're all based on reality and on actual evidence - not government meddling. I pointed out, in the second article:
Our incomes are being reduced in purchasing power by approximately 10% per year (the real rate of inflation, as discussed yesterday). If I earn $50,000 per year, and receive a 1% increase this year to compensate me for the official rate of inflation, this is worse than meaningless. In reality I will suffer a 9% decrease in my purchasing power. Next year, my income of $50,500 (including the previous year's 1% increase) will be worth only $45,450 in terms of this year's purchasing power. That decline will continue, year in, year out. I have to plan accordingly, and expect that my money will buy less and less as time passes. Unless I can somehow find extra money from somewhere, I'm going to be in serious financial difficulties in due course. (Many people already are.)
I think the rate of increase in prices is accelerating. My (rather lighter) wallet tells me so. Readers, what are you seeing? What are you experiencing? If you find the same thing, please tell us about it in Comments, giving specific examples if you can. Let's learn from each other's experience, rather than from bloviating bureaucrats.
In particular, I'm remembering what it was like to live in a relatively high-inflation society (South Africa from the 1970's onward). One got used to routine annual increases in salary in the 10% to 15% range, just to keep pace with inflation - not as a reward for performance. Top performers got larger increases as a reward. I wrote about that experience in greater detail a few months ago. Again, I recommend that you re-read it. I believe the risk of that happening here in the USA is no joking matter. The warning signs are there.
I think we're on the cusp of my earlier warnings about inflation becoming hard reality. What say you, readers, from your day-to-day experience?