Latest Inflation Data and report

[Freedom56]

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Originally Posted by ShokWaveRider I guess what I meant was, would one's standard of living change that much if one's monthly costs went up ~$100 for a while?

Not for us. Our monthly expense for maintaining our condo (property tax, condo fees, utilities, insurance) has gone up about $652 per month since 2011 and that hasn't impacted us. Most people adapt their spending habits.

[Chuckanut]

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Originally Posted by Turbo29 So, food items that I buy at Costco that were $9.99 and are now $11.49 or were $11.99 and now $14.99 or $12.99 and are now $15.99 don't affect me? Good to know that I was imagining the whole thing when my bill was higher.

I'm glad you realize it's all a fig-newton of your imagination. By the way, the price of Fig Newton cookies is also up. Imagine that!

[JoeWras]

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Originally Posted by CaptTom I'll just point out that some of us are on FIXED pensions.

I left Megacorp in 1995, and always joked that my fixed pension (about $300 per month) would be worth a round of golf in 2026 at age 62.

Then we went into malaise and great recession and what not, and suddenly, it seemed like maybe I'd get 2 rounds of golf and a dinner with DW!

Now this happens, and I'm down to golf + dinner, at least at the start. Eventually, probably only one or the other.

[MichaelB]

As the saying goes, you can run but you can’t hide. Inflation will affect us all, but not at the same time.

It takes time to wind its way through the economy, and its path is volatile. As final consumers we are constantly changing our spending habits in response, and may not feel the pinch so deeply right away.

Wages are sticky, though, so as inflation works its way into the cost of labor, especially at the low end, it feeds inflation in two ways. First, by increasing the cost of doing business, and second, by giving the working class more income to spend.

It takes a few years for inflation to spread through the economy, and it will do so unevenly. So the real question is not “have we felt this inflation? but “when will it reach us, and how bad will it get?”

If history is a guide, the price increases we are seeing will stick and it’ll take a few years to bring the rate of inflation back to its previous levels. Wages and salaries will rise to compensate and remain at the higher levels, and real assets will also hold their value. Fixed incomes that are not indexed will suffer permanent loss of purchasing power.

[daylatedollarshort]

Our modest pensions are fixed, but we intentionally offset them with a fixed rate mortgage, which we refinanced last year when rates dropped. Pensions stayed the same but the mortgage interest went down so that worked out. Our general annual expenses subject to high inflation are well under our combined TIPS ladder and Social Security income, which are both inflation indexed, with the TIPS income higher than CPI inflation because they were bought with positive yields.

We've been a fan of Bobcat2's advice on Bogleheads about asset matching since we first retired, and it seems to be working out - Matching strategy - Bogleheads.

[38Chevy454]

As a snowbirding FL visitor (east coast by Cape Canaveral), I can say that groceries are more expensive here than at home in Cincinnati, which is the corp home of Kroger. Where I am at here in Fl there is Aldi, WalMart, Publix and Winn-Dixie. I kind of rank them in that order as for prices. Back home I would rank it as Aldi, WalMart, Kroger and then the Whole Foods/Fresh Time/Dorothy Lane. Even Costco or Sam's prices here in FL seem a little higher than in OH. Although I will also concede that I have not had recent grocery shopping in OH since Dec.

I think is is logical that locality to the supply affects prices. Therefore I believe shipping costs are probably the main price difference for FL vs OH. General inflation that is affecting almost everything we buy is a different concern. General inflation is absolutely affecting more than just groceries. Go to Home Depot/Lowes/Ace Hardware and price inflation is very obvious in either location.

[GenXguy]

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Originally Posted by ShokWaveRider I would debate if the current inflation numbers REALLY affect anyone here on ER. Assuming the folks are not working. I would say it really does not affect us.

You must have skipped a bunch of posts.

Inflation has caused me to have to increase my expenses budget 15% to 20% despite no change in consumption. I'm already very frugal and have a lean expense budget. More detail in earlier posts about some of the increases.

And as a result of 15% to 20% increased costs, it's going to leave me with hundreds less every month for discretionary, so I'm delaying retirement at least a year because of inflation. And if it doesn't soon come back down from the very high levels I'm seeing, I might have to put off retirement yet another year.

I've seen some comments from people about home maintenance and buying cars. I always account for those in my ongoing budget with a sinking fund, so it doesn't matter that I'm not buying a new car this year or putting a new roof on my house this year. Due to the sharp increase, my sinking funds are underfunded, so I'm having to increase them to make up for the existing shortfall as well as ongoing higher costs.

I just got back from the grocery store. Something else goes up with every trip. This time, the soup I get was up 33%. I only wish I had seen the lower 7.5% inflation projected in the CPI than what I'm seeing in real world costs. And I don't believe we are going to have deflation and prices coming down on average as I've heard in the mainstream media, forums, and from politicians. If inflation drops to say 3% in a few years, that doesn't mean prices will drop, it just means they won't go up as fast as they had been.

Complicating things is that my stable value fund through work was paying 3%, and now 1.36%, so it went from beating inflation to losing big to inflation, and my CDs are earning very little, plus stocks are even taking a hit, which isn't looking good looking ahead with a series of FED interest rate hikes expected this year.

It's depressing.

[Koolau]

My gut says we'll all experience the current inflation differently and notice its ill effects at different times. While I've seen dozens of "little" inflationary changes over the past year, none have been dramatic (if you don't add up all the little changes.) BUT when forced to buy a washer/dryer or a used car or hire labor, it suddenly hits you that things really are way more expensive now. YMMV

[ShokWaveRider]

It could also be different parts of the country too. As Koolau so rightfully says, if effects folks differently. I may have made some "general" assumptions, but I would have thought those folks like us who ER'd over a decade ago would take it in their stride. It certainly does not change our Standard of living or quality of life. OK we pay a little more, but there and then we do every year. I would not consider our experiences excessive. Now saying that we do not eat out a lot at all, never have, never will unless we are traveling. We do like our takeout though, and I have not noticed any real differences there, and I would.

Our food bills for 2 folks, and we do not skimp on poor quality food, have been as follows from September 2021 to present are: $361, $406, $382, $437, $340 and $202 so far this month. This does not include grog.

Water went up $5 a month in 2022, Electricity is equal billed and was $114 in January and we are all electric with the exception of Hot water which is gas and averages $30 a month. Cable did go up by $8 a month as of this month.

Again, we see this as relatively normal for us when looking back over the last few years.

Sorry if some of you are seeing drastic increases, we are simply not. We have not been traveling so I cannot comment there. Phone and car Lease are the same and will be for the next 2 years, insurance has been fairly constant for the last 3 - 4 years.

HOA did go up a little, but no more than previous years and landscaping has not change for the last 3 years, in fact it went down a smidge.

So, I guess if effects different folks differently depending on their lifestyles. For us "So Far" it has really not been anything we are concerned about. We still have some 4.5% CDs, (till 2024), and we just roll them over, others are pretty much zero right now waiting for the FEDS to act.

Medicare did go up, as it always does and so did DW's ACA Silver plan, but again I am sure they would have gone up regardless. I do 90% of our home maintenance myself. We may need a new AC unit this year or next, that remains to be seen.

Our home value is up 100% and still going. DW did get a little increase in here SS. We do have a good Cash living expense buffer that draw from when needed.

[CaptTom]

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Originally Posted by ShokWaveRider I guess what I meant was, would one's standard of living change that much if one's monthly costs went up ~$100 for a while?

A few things to dissect here.

Would my standard of living change? It already has. I look at the price of something I used to buy in the supermarket and say "screw that, it's not worth that much!"

Monthly costs going up by $100? Not sure that's the figure. Could be more, could be less. I think it makes more sense to look at percentages.

...for a while? No, I don't think this is transitory. Prices rarely come down. And if they did, every pundit on every financial outlet would be screaming that the sky is falling due to deflation. (Even if everything was just going back to where it was before.)

[daylatedollarshort]

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Originally Posted by GenXguy I just got back from the grocery store. Something else goes up with every trip. This time, the soup I get was up 33%. I only wish I had seen the lower 7.5% inflation projected in the CPI than what I'm seeing in real world costs

I think supermarket and processed food prices are increasing more than inflation. At least one politician has complained about grocery store chains claiming record profits during the pandemic. Canned soup prices haven't changed much at the discount stores I shop at, and the sale prices are still the same. But if I didn't buy canned soup during sales and at discount stores and did my shopping at Safeway regular prices, I'm sure I'd see much more inflation.

I usually make a big batch of home made soup every few days with a lot of veggies that cost 50 cents to $1 a pound and maybe a little chicken, tofu or rice noodles. Where we shop summer squash is 2 pounds for $1, organic carrots are $1 a pound, onions are 2 pounds for $1, and asparagus is $1.50 a bunch. The asparagus used to be $1, so that did go up, but it is still pretty cheap. Home made soup with ingredients like that doesn't cost much to make, plus I make it in a thermal cooker, which cooks mainly with retained heat and doesn't use much energy.

[Freedom56]

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Originally Posted by ShokWaveRider Our food bills for 2 folks, and we do not skimp on poor quality food, have been as follows from September 2021 to present are: $361, $406, $382, $437, $340 and $202 so far this month. This does not include grog.

Our food bill in Florida from January 10th through February 14th has been $622 (for two) with about 70% spent at Costco and the balance at Publix. This excludes dining out, alcohol, and dinner with guests. We normally spend about $380-$420 per month in California for groceries (mostly Costco and some at Vons/Safeway). We are not big eaters and are both slim or very slim by today's standards. We do eat a lot of fresh fish and sea food which is extremely expensive in Florida when compared to California. We rarely eat red meat.

[GenXguy]

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Originally Posted by daylatedollarshort Canned soup prices haven't changed much at the discount stores I shop at

I would have said the same thing had someone asked me yesterday. Just saw this big jump today. But, that's just this grocery trip's example. It's aways something. I make crock-pot stews and such sometimes also. Food is less than 15% of my budget, so that's not what's really driving up my costs (per previous posts).

[MrsHaloFIRE]

We are spending $500plus a month on groceries atvwalmart per month in 2 adults. We dont skimp on meat/organics. But we are considering pivoting some to the commissary bc the high end breads we eat are $1.50 plus cheaper per loaf. Fairlife milk $2 cheaper per container. For things we use housebrand example garlic salt WM still better.

[Chuckanut]

My main concern is for my children. They already have been priced out of the housing market in my area. Continue inflation that is far in excess over what they can earn on savings, just sets them back more. Frankly, I am disgusted.

[tulak]

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Originally Posted by Chuckanut My main concern is for my children. They already have been priced out of the housing market in my area. Continue inflation that is far in excess over what they can earn on savings, just sets them back more. Frankly, I am disgusted.

I can relate. I’m in the same area and kids are doing well, but maybe not well enough for this area. It is frustrating.

[Samsung4321]

Eat unprocessed - cheaper and less damaging to health:

Brown flax seed ( linseed ) ground 30 g, moistened with canola oil 15 g.

Energy ~ 1.2 MJ, ~ 15% daily energy requirement.

Cost ~$0.10 / serving.

Both components contain substantial concentrations of Alpha-Linolenic Acid. Linseed (and canola seed) contain substantial protein, fibre and less carbohydrate than wheat, rice - much less glycemic.

Bland taste. 'Fuel Food'.

USA food groceries cost ~ $400 / mth. Just one change - adopting 'Fuel Food' - reduces that grocery cost by nearly 15% = -$60. Food inflation and inflammation replaced by food disinflation and dis-inflammation.

Aus inflation (cpi) ~3%. Dairy items constant low price for years now up ~10%. All groceries for 2 $A60 / w = $A260 / mth.

[JoeWras]

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Originally Posted by Koolau My gut says we'll all experience the current inflation differently and notice its ill effects at different times. While I've seen dozens of "little" inflationary changes over the past year, none have been dramatic (if you don't add up all the little changes.) BUT when forced to buy a washer/dryer or a used car or hire labor, it suddenly hits you that things really are way more expensive now. YMMV

My wake up call was last year in getting an HVAC unit. I "just did it" despite the shock. Glad I did, it only got worse.

Today I get roof quotes. Should be "interesting."

[Badger]

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Originally Posted by daylatedollarshort I usually make a big batch of home made soup every few days with a lot of veggies that cost 50 cents to $1 a pound and maybe a little chicken, tofu or rice noodles. Where we shop summer squash is 2 pounds for $1, organic carrots are $1 a pound, onions are 2 pounds for $1, and asparagus is $1.50 a bunch. The asparagus used to be $1, so that did go up, but it is still pretty cheap. Home made soup with ingredients like that doesn't cost much to make...

+1 The prices I pay may be a bit higher but the end result is the same. We have always cooked the vast majority of our meals at home. We like an occasional (read very rare) meal out but prefer the quality, cleanliness, and healthier meals at home. Soup is an especially good choice in colder weather and as you state it can be very inexpensive as well as healthy. The only canned soup we buy is chicken or beef broth that we stock up on when on sale unless we make our own from the chicken carcass. Rice, pasta or barley make good inexpensive additions too. Any beef, chicken, or pork left overs can be used in soup for a quick tasty meal. How difficult is it when all you have to do is cut up some veggies and a protein and boil them in some stock with a few spices/herbs. I can make a huge pot of soup that can feed six for about $10. Great inflation fighter.


Cheers!

[misanman]

GS is trying to buy his first house. He's to be commended for saving a lot to do this but he has put in list price or above offers on about six houses and lost out to bids that are $25K to $40K above asking. He's getting pretty discouraged as he can't save fast enough to catch up.