I've been saying for years that the "official" US rate of inflation is vastly understated - deliberately so, in order to allow the US government to manipulate inflation-linked entitlement programs and the like. I wrote about the issue in three articles in January:
Now comes an interesting analysis of "shrinkflation" - the ever-decreasing quantities inside the products we buy for ever-higher prices.
Based on numerous sources, I was able to develop a partial list of products that seem to have shrunk, or whose packages offer less items than they once did. The list includes: cookies (package sizes and in the case of at least one popular brand, the cookies themselves), toilet paper, candy bars, chewing gum and other confectionary products (like Cadbury Eggs), ground pepper, tuna, yogurt, ice cream, orange juice, coffee, bags of tea, sugar, potato chips, toothpaste, deodorant, cake mix, cereal, blocks of cheese, paper towels, napkins, paper plates, crackers, hot dogs, bacon, frozen dinners, heads of lettuce, canned vegetables, frozen vegetables, spaghetti sauce, canned tomatoes, mixed nuts, shaving cream, hair spray, bars of soap, tubs of margarine, detergent, bleach, shampoo, pet food, (some brands of) beer, (some brands of) hard liquor, diet shakes, diet bars, frozen pizza, peanut butter, mayonnaise, Gatorade (in some stores), vitamins, over-the-counter medicines, and even newspapers (page widths have shrunk from 16 inches in the early 1950s to 11 inches in most papers today).
Given the difficulty of finding apples-to-apples comparisons of product prices and sizes at different points in time, I embarked on my own Internet search.
The best source I found was a survey of prices (which does include package sizes) conducted by the Morris County New Jersey Library. Working from this historical source, I picked 30 staples at random for my own “basket” comparison. My analysis focused on the years 2003 to 2014, when the library stopped doing its survey.
I concluded that 25 of these 30 products had probably experienced reductions in sizes or net weights.
I also calculated that the nominal rate of price inflation for these products. Interestingly, for the vast majority of them, the rate of inflation had exceeded the CPI’s official rate of inflation, often by large margins.
For example, in 2003, a jar of Hellman’s mayonnaise was $1.99 and was sold in a 32-ounce container (6.2 cents an ounce). In 2013, the mayonnaise was sold in a 30-ounce container for $4.59 (15.3 cents an ounce). Over 10 years, the per-unit price increase was 146.7 percent compared to the CPI “food at home” figure of 30.3 percent.
Skippy Peanut Butter was $2.19 in an 18-ounce jar in 2006 (12.1 cents an ounce). In 2014, it was sold in a 16.3-ounce container for $3.29 (20.2 cents an ounce). The price increase in eight years was 67 percent, compared to food-at-home inflation from 2006 to 2014 of 24 percent.
. . .
For my part, I came to view shrinkflation as simply another piece of evidence that supports the contrarians’ view that “real” inflation is almost certainly higher than official inflation.I suspect it is telling us that the inflation we see with our own eyes is greater than the inflation figure we read about in The Wall Street Journal.
That is, that ever-shrinking roll of toilet paper might be telling us something the government doesn’t want us to hear.
There's much more at the link. Recommended reading.
As one analyst said some years ago, "If You Want To Know The Real Rate Of Inflation, Don't Bother With The CPI". Shrinkflation underlines how right she was.