U.S. Inflation Data and Individual Lifestyle Choices

Here is an interesting chart from the WSJ depicting the YoY change in prices for various groupings of products, services, etc:

Graphic courtesy of the WSJ

Now the obvious problem with this type of data is that the way the labor department calculates it often lags reality, and these price increases can be drastically impacted by the specific reality a particular household lives in.

Last June I drove about 470 miles and spent $103.00 on gas and this past June I drove 1,200 miles and spent $286.00 on gas, all due to changes in my lifestyle around where my significant other lived, no longer working from home 90% of the time, having a much longer commute, etc, etc. I know how to cook more things from scratch this year, but still spend more on groceries despite buying fewer pre-processed foods. I.e. lifestyle changes can exaggerate (or mute) price increases, and the steps we take to mute price increase may not be enough to reduce our costs.

As a result it's probably best to view the data in terms of relative pain compared to past years, knowing that the actual pain felt by a household is usually greater than the numbers indicated, pain that can potentially be exaggerated or muted by one's lifestyle.

You can read more on the topic from the WSJ here.