Sometimes the economy isn’t measured by a headline. Sometimes it’s measured by the small decisions we make every day.
I found myself saying something this week that probably sounds familiar to many people.
“I’ll get that next time.”
A couple of days after grocery shopping, several empty containers were already sitting on my desk reminding me it was already time to head back to the store. Peanut butter. Milk. Allergy spray. Even Willie’s dental treats.
As my shopping basket filled up, I caught myself thinking that a few things could probably wait until the next trip.
It wasn’t a major financial decision like buying a home or a new car. It was one of those small everyday choices that many of us make without giving it much thought.
That experience made me think about this week’s Personal Consumption Expenditures (PCE) inflation report.
Economists often discuss inflation using terms like “headline inflation” and “core inflation.” Those numbers are important because they help us understand how prices are changing across the economy. Core inflation excludes food and energy because those prices can change quickly from month to month, while the broader inflation measure includes everything consumers purchase.
But regardless of which measure economists are discussing, families still have to pay for groceries, gasoline, prescriptions, pet supplies, utilities, and all of the continuing expenses that arrive week after week.
This week’s PCE report will tell us how prices are changing, but I’m just as interested in another question.
How are those prices influencing the decisions people make?
Are families taking vacations or staying closer to home?
Are they replacing an aging appliance now or waiting a few more months?
Are they eating out as often, or cooking more meals at home?
Or have they simply found themselves saying:
“I’ll get that next time.”
My experience isn’t everyone’s experience. Some families may feel comfortable spending more than they did a year ago. Others may be watching every dollar more carefully. That’s one reason these reports are so interesting. They help us understand not only where prices are moving, but how consumers may be responding.
When the PCE report is released, we’ll take a look at the numbers together and ask a simple question:
What do they tell us about how Americans are feeling and the decisions they’re making about the future?
I’d love to hear from readers.
Have you found yourself changing the way you shop over the past year, or has your routine stayed about the same?
Sources & Additional Reading
U.S. Bureau of Economic Analysis – Personal Income and Outlays (includes the PCE Price Index)
https://www.bea.gov/data/income-saving/personal-income-and-outlays
U.S. Bureau of Economic Analysis – Personal Consumption Expenditures (PCE) Price Index
https://www.bea.gov/data/personal-consumption-expenditures-price-index
Federal Reserve Bank of St. Louis (FRED) – Personal Saving Rate
https://fred.stlouisfed.org/series/PSAVERT
U.S. Bureau of Labor Statistics – Consumer Price Index (CPI)
https://www.bls.gov/cpi/
Willie and I appreciate every reader. 🐾