The Broad Brush Approach
The BLS (Bureau of Labor and Statistics) released the latest inflation figures for the period ending November 2023. I have always had a bit of an axe to grind with the news media and some doomers out there who tend to paint the picture of inflation with a broad brush. Just because a certain good or service has risen in price doesn't mean inflation is equal across the board.
The past four years have brought on an economic dynamic unseen for most. The fallout from much of the 'helicopter money' dropped since Covid showed up at our doorstep, creating some significant inconsistency in prices of goods and services. We are finally seeing some leveling out. Remember, inflation coming down doesn't mean things get cheaper. It just means they stop getting more expensive.
Commuters and Non-Commuters
But there is a lot more to the story of who is affected. The person who works from home doesn't feel the bite when gasoline prices rise. But, the person who must commute everyday or drives for a living does. It is a tale of two different effects and possibly two different opinions.
Right now, as the above chart points out, we are seeing renters and recent home buyers sweating bullets to cut that monthly check. Rent is way up and interest rates are ballooning mortgages. This chaos is ensuing while those who locked in a sub 3.5% mortgage rate in 2020/2021 are sipping margaritas and asking 'what's the big deal?'
Then we move onto things like airfare, gasoline, rental cars, etc. If you own your home pre-2022, travel often, and waited to get that new refrigerator after the 2022 sticker shock, life isn't too bad. If you rent your home and love to eat out often, your wallet likely sheds a small tear every time it opens.
EV's Are Having Their Day In The Sun
Some EV owners may be thinking, 'I don't worry about the cost of filling up anymore*.' This may be the case now, but the rules of supply and demand, coupled with the large increases in wages, materials, infrastructure, etc. will bake themselves in over time. Some process needs to make the electric and someone (likely higher earning) must keep the juice flowing. Gasoline was once 79 cents a gallon, too. Where money can be made, it will be made.
TV's Refuse To Comply
Let's take a U-turn and go back in time to when giant flat screen TVs were a novelty. In 2010, I bought a 50 inch plasma TV. Game changer. I also shelled out $1,000 for this piece of magic. Great technology, great sound, it was amazing.
Fast-forward to 2023. That same TV would cost about $150. Between 2010 and 2023, televisions experienced an average inflation rate of -13.85% per year. This TV was magical alright. It reminded me that not everything gets more expensive. It is personal.
The Actual $1,000 TV. Still Kicking. Annual Cost= $71.42 Current Value= Less than $1,000
*Note: I have nothing against EV's