‘Vibecession’, vegetables and lots of vitriol
Whenever I write about falling inflation, I get a lot of comments and mail to the effect that grocery prices have doubled under President Joe Biden and are still soaring. So a few days ago, first on social media and then in a blog post, I pointed out that they haven’t and aren’t.
According to the Bureau of Labor Statistics (BLS), prices of groceries for home consumption rose 19.6% between January 2021 and January 2023, then another 1.2% over the following year. Yes, grocery prices are up a lot, but not nearly as much as some people claim, and the big surge is behind us.
I guess that I should have expected an immense amount of vitriolic blowback, with lots of ad hominem attacks on yours truly and denunciations of the BLS. After all, I remember the inflation truthers of the early 2010s, who refused to believe that their predictions that easy money would cause runaway inflation had been wrong, and insisted instead that the government must be cooking the books. For whatever reason, however, the vehemence — and sheer silliness — of the grocery truthers took me by surprise.
But hey, maybe this can be a teachable moment. We’ve heard a lot about the “vibecession”, in which many people insisted that the economy must be in bad shape because it felt that way to them; part of that is vibeflation, in which people take the actual inflation we’ve experienced recently — which has indeed been disturbingly high — and, um, inflate the numbers based on their feelings about the amount they spent on groceries a few days or weeks ago.
And maybe I can use this moment to show why that’s a bad idea.
Now, I go grocery shopping myself and am occasionally startled by the total at the cash register — although that’s usually because I wasn’t factoring in the price of that bottle of scotch I picked up along with the meat and vegetables. But I also sometimes think about what I paid for roughly the same stuff three years ago, and the truth is that I have no idea. I know it was less, but off the top of my head, I can’t tell you by what percentage. And if you say you can, forgive me for having doubts.
Still, there are people who know, just know, that the BLS is greatly understating food inflation, and some of them have gone to the trouble of attacking the bureau’s methodology — or, at any rate, what they think is the bureau’s methodology, because the most prominent critiques seem to involve confusing the consumer price index, which is estimated by regularly checking prices at the same stores, with the Consumer Expenditure Survey, which is completely different.
Still, are there any independent estimates we can use to get a second opinion on grocery prices as a check on the credibility of the BLS? Why, yes, there are.
One example: A while back, Tradingpedia compared grocery prices at Walmart in July 2022 with what they had been in July 2019; it’s not clear what weights it used, but in any case, it estimated the overall price increase to be 21.5%.
By contrast, over the same period, the BLS price estimate for food at home rose by 21.3%.
Another example: In December 2022, NPR revisited the cost of a shopping cart of goods purchased at Walmart in August 2019 — a cart that was mostly groceries, although it included some other household items. The cart’s cost had risen by 23%; the BLS estimate of food prices rose 25% over the same period. And we know that food inflation has slowed since then, not just because of government data but also because the CEO of Walmart has said so.
Of course, grocery prices are a terrible way to assess either the state of the economy or the success of economic policy because they’re often driven by special factors outside any government’s control. Consider eggs, one of the few grocery items whose price really did more than double — briefly — under Mr Biden, before plunging again.
That roller coaster ride had nothing to do with Bidenomics. It was all about an outbreak of avian flu!
Maybe my message here sounds like ObiWan Kenobi in reverse: Look, don’t trust your feelings. I don’t mean that you should ignore the evidence of your own eyes or place total faith in official statistics, which can indeed be misleading in some circumstances. (Don’t get me started on owners’ equivalent rent.) But don’t dismiss the careful work of statistical agencies because you were feeling angry yesterday on the checkout line, or because you don’t like the current president. Before declaring that the official data is all wrong, you need to do a lot of homework, much of it involving educating yourself on where the data comes from.
And if your political views require greatly misstating the facts, maybe you should consider revising your views rather than rejecting the facts.