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If inflation is down, why do things seem to cost more?

November 4th, 2009 at 01:55 pm

As I'm looking at our food budget & seeing that over time - our grocery bill has gone up.

Immediately I thought - it must be inflation.

So I look at the latest inflation rates that say in 2009, we actually experienced DEflation of -1.3%

Regardless, it seems I'm having to increase our food budget to $600-$700/mo for a family of 6.

It could be entirely possible the kids are just eating more. We've curbed going out to eat as well.

In addition, our insurance covers the baby's formula (She is on a special high calorie drink due to being "Failure to Thrive") so if we had to pay for that on top of our other groceries, I could easily see us spending around $1000/mo on groceries.

How?

Our menus literally look like:

Skillet Lasagne (uses sausage, ricotta, marinara, parsley, lasagne noodles...one box of lasagne noodles makes 2 dinners of this)... This is homemade & made in 30 minutes

Spaghetti & Meatballs

Tacos

Beef Stroganoff

Turkey Burgers

Tortellini

Family Burrito (4 Flour tortillas folded over to make a square, using refried beans, chopped chicken, cheese, onion, taco seasoning & salsa, then topped w/cheese & tomatoes)

and other stuff like that... mostly pastas though.

We buy about 6-8 boxes of cereal for a 2 week period.

I clip coupons and price compare.

*shrug*

There has to be an answer to this, I can't imagine why my grocery bill would go up if the economy is deflating.

5 Responses to “If inflation is down, why do things seem to cost more?”

  1. Broken Arrow Says:
    1257347259

    That is such a great question, and believe it or not, but it's one that I've been trying to sort out myself.

    As far as I can tell, over the past 6 months, while we've been experiencing deflation, the Consumer Price Index has nevertheless been increasing.

    So, while our dollar has actually strengthened, the price of goods has also been on the rise. However, that doesn't mean it translates to a perfect balance, and it's likely that we are in a situation where the price of goods is out-pacing the short-term strengthening of the dollar.

    Text is Here's a chart on the CPI. and Link is http://www.inflationdata.com/Inflation/Consumer_Price_Index/HistoricalCPI.aspx
    Here's a chart on the CPI.
    Text is Here's a chart on inflation. and Link is http://inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx
    Here's a chart on inflation.

  2. frugaltexan75 Says:
    1257374520

    I've noticed that too. I try to not spend more than $25/week on groceries. It used to be that my limit was $20 ... but the amount I could get for that kept getting less and less, so I had to up my limit. (it's just me, and I still have a good bit in my pantry stock)

  3. LuxLiving Says:
    1257377085

    Hubster and I have this same conversation frequently!

    No answers here.

  4. cptacek Says:
    1257387008

    short answer: they lie Smile

  5. baselle Says:
    1257404677

    "Wants" (like a house) are deflating. "Needs" (like food) are inflating.

    Also, deflation and inflation are reflections of the amount of money floating around - inflation is too much money while deflation is the scarcity of money. After all, if your house was worth 500K in 2006, but now is worth 350K, what happened to that 150K. You could say that it didn't exist, or you can say that it was destroyed somehow.

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