And $6 boxes of cereal
Between degrees I worked as a waiter. I preferred tips on a credit card. Yes, that made them more reportable. But it also made them bigger. Customers seemed more generous when the cash didn’t come directly out of their wallets. They felt the bite more when they plopped down cash.
Americans’ sense that their personal economy remains unwell may stem from something like that. Great economic data is abstract. Six-dollar boxes of breakfast cereal are not. Nor five dollars for a dozen eggs.
That’s what Americans feel most, The Atlantic‘s Gilad Edelman explains:
Working with Leger, a North American polling firm, we asked 1,005 Americans how they felt about the economy. As with other recent polls, this one painted a gloomy picture. Only 20 percent of people said that the economy has gotten better over the past year, compared with the 44 percent who said it has gotten worse. (There was a big partisan split, but even among self-identified Democrats, only 33 percent said the economy has improved.) Then we asked them to choose, from a long list, what factors they consider when deciding how the national economy is doing. The runaway winner was “The price of groceries for your home”: Twenty-nine percent of people picked it as their top choice, and 60 percent of people selected grocery prices among their top three. Other than “inflation” itself, nothing else came close—not gas, not housing, not interest rates, not the cost of major purchases. And when we asked what people had in mind when they reported that their personal finances were getting worse, 81 percent chose groceries.
Home prices may have skyrocketed during the pandemic, but those negatively impact primarily non-homeowners. Homeowners are richer. On paper.
Polling debunks a couple of theories on why people don’t feel the improved economy: the expiration of the government’s pandemic stimulus and expanded child tax credits. And answers depend on how you ask the questions. If people “were coldly rational” and studied their increased incomes, “they would recognize that their income more than offsets higher grocery prices—they’re spending more, but they still have more left over,” Edelman writes.
But as grocery-buyers, we feel the pinch. So does Edelman:
I should confess that I’m among the many Americans who experience prices as an atmospheric economic condition and income as something I earn. Early in the pandemic, I got in the habit of making an egg-and-cheese sandwich for breakfast pretty much every day. I recall a six-pack of Thomas English muffins costing about $3.50 at the time. Today, one costs $5.59 at my nearest Wegman’s and $5.29 at the nearest Safeway and Harris Teeter. An economist would probably say I shouldn’t worry about it. After all, since the start of the pandemic, I have changed jobs twice, and my income has risen more than enough to easily cover the extra $2 a week on English muffins. Still, I can’t bring myself to buy them. My higher income feels like something I accomplished through hard work and patience, but the higher price of English muffins just feels wrong. I settle for cheaper, inferior brands while waiting in vain for Thomas to go back under $5. (Or I grab them when I’m at Target, where for some reason they’re still only $3.49.) Unlike most poll respondents, I don’t conclude from this that the economy is bad. On the very specific dimension of egg sandwiches, however, I suppose I do feel worse off.
I feel your pain. Blueberries I bought through much of the pandemic recently shot up by half at Harris Teeter. The brand-name cereal I once bought at about $3.59/box is now over $6. Some of Harris Teeter’s store-brand clones are surprisingly good at half the cost. Don’t ask about the price of cookies and lettuce. Eggs are cheaper at Trader Joe’s.
If Joe Biden finally catches a break and wins credit for the improving economy by next fall, you and I, Dear Reader, will feel better off. He just might too. Food inflation if flattening. Consumer sentiment “has made up about half the ground it lost from the eve of the pandemic to its nadir in June 2022.” But those 2019 prices are not coming back. The problem is that grocery prices go up more readily than they come down.
“Personally, I still can’t wrap my head around paying $5.29 for six English muffins,” Edelman says. “Ask me again in six months.”
Happy Hollandaise!