What Economists Miss About Inflation.

Despite a drop in the annual rate of inflation in 2023, U.S. consumers still feel the effects of inflation due to their longer time horizon. Over the past three years, the consumer price index for all items has risen by 17.96%. For example, a tuna sandwich that cost $10 in 2021 now costs $11.80 in 2024, which feels like severe inflation to consumers. Additionally, wages have not kept pace with rising prices, and the introduction of tipping at takeout places has added to the perception of inflation. Government grants that helped lower-income consumers during the pandemic have also declined. Overall, consumers feel they are still battling price inflation. [Extracted from the article]