I’m delighted to see inflation coming down. Add to that, all the good news around unemployment, consumer demand, and gains in The Market paints an increasingly rosy picture. It’s all awesome, right?

Not so fast.

Indicators are all positive but they must be viewed in context. First, there’s no getting around the fact that stuff is a LOT more expensive today than it was a few years ago. Something that cost $20 in 2021 probably costs a little less than $24 today. That’s a steep rise in three years. At the same time, wages haven’t kept up. So most folks feel the pain with every watt of electricity, pound of hamburger, or pair of pants. Unless inflation turns into deflation (which we probably don’t want) or wage growth outpaces inflation (which it might just), that pain will always be a thorn found in every wallet.

Perception adds it’s own weight to economic realities. NYT guest essayist Paul Donavon calls out the impact price has on common, repetitive purchases like a candy bar.

… we’re much more likely to remember the price of the Snickers bar and forget the price of the television we bought last year. 

Paul Donavon, New York Times

Even when prices (like gasoline) are dropping, routine purchases that seem (or are) higher can compromise our ability to navigate the world economically. That’s doubly true for essentials like groceries and heating bills.

What’s a person supposed to do? We can’t logic our feelings away but we can look at how we spend our money. If you’re feeling anxiety, look at your budget. Are you really spending more on food, energy, or transportation? If so, where’s the increase coming from? Inflation doesn’t affect all things uniformly; some food costs are relatively unchanged while others are significantly higher. You might find that modest changes in shopping might make a big difference.

This line of reasoning applies to neighbors, friends, and family. If someone close to you worries because the press is all a-twitter about inflation, suggest simple techniques to help them stay sane: track spending, compare it year-over-year, then make choices based on information specific to you.

It’s never wise to make any choice – economic or political – based on ruminations from bloggers or TV personalities. Do the math; it always adds up.