The Truth About Inflation in 2025

[Music] brought to you by the every dooll app start budgeting for free today my partner and I here we were talking earlier in the show and and and we talk all the time around the office about this um inflation yeah right and just there is a natural progression of inflation over time the FED just a kind of a quick review here because uh cuz Jak's got a little something to share here today so teing you up here because everybody's heard about the FED Jerome pal unfortunately has become a name that everybody knows yeah and and to his credit uh the FED is attempting sometimes I agree with them sometimes I don't but they are always attempting to keep inflation uh in that two two and a half% range or so and when it gets above that they start paying attention and this is where we get the monetary policy and you all are paying attention to the headlines all the time when you see are they raising rates are they dropping rates all this kind of stuff so it's always an interesting tension between wages are wages going up uh are they outpacing the inflation PA inflation very hard for that to happen over long ter term so anyway nonetheless what do you got here you got a little something for us well I'm just trying to I'm trying to make heads or Tales of all of it right because it's like we knew in 2022 that inflation was going bananas like we felt it the numbers were there the the data supported what we were feeling was true but then we started to see inflation taper off and that's right we saw wages start to jump ahead but yet we were still saying oh it's so expensive out there it's so crazy and so my thought was like okay what's really happening because you know you're a guy that's following employment you're following those numbers and I'm looking at this graph here that I saw that really around March of 2023 a little earlier wages really did start outpacing inflation uh at a decent rate and I thought okay that means that we've got a little bit more margin back as American people where is this money going so I started looking around and you know obviously we feel it at the grocery store like that's the main place people say oh my gosh it's so expensive and around about the time I was looking at this I saw that NPR came out with a a grocery study that basically said they followed the prices of groceries from 2019 until today they went to Walmart and they picked um I believe it was a hundred different items and they said we're going to track this over the course of 6 years basically and what they found is on average out of those items that they tracked um 21 of the items actually got cheaper uh 27 products got more expensive and the rest of them basically stayed the same and when you think about it you're like okay that's interesting that's not as much as I would have thought like I'm thinking everything has gone crazy everything's exploding and so again I'm like okay things have started to taper out what's going on with this money we're also seeing articles that are saying like people are spending more on their credit card than ever before but at the same time like Investments are doing better than ever ever before so the question is is there margin and what are people doing with it is it true that wages are actually outpacing inflation and from your point of view what do you think about that well no they're not and they can't it's unsustainable so for instance if we look if we look from a macro so so real big picture um you know wages can't outpace inflation on the regular because it just get to be too much like you just so there's this give and take between wages it kind of kind of comes up and down it's a bit of a roller coaster so even if you see it at a moment you're saying it doesn't generally last it does not so you don't want to get into an apples for apples is what I'm saying the conversation this idea that well inflation over the last quarter was this so wages should have done that it's not how that works you're looking at the total this is kind of a complex conversation and I'm trying to keep it simple keep it simple but you know you can't you can't force on companies this idea when you're in an inflationary period like we we had been if you go back about two years ago uh and inflation's really really high you cannot expect companies to go well because inflation is up here I got to raise everybody's wages because that again that drives more inflation right because when they raise wages they're raising their expenses they pass those exp so you got to be careful as my point so this this this back and forth and trying to keep that that's not what you want what's interesting about this article as you were talking that I saw the reason why people feel and really see it at the grocery store by the way we saw this talked about in the media leading up to this last election that's right you saw it on MSNBC you saw it on CNN and fox my point is it didn't matter what side of the aisle everybody was feeling the pinch on a lot of consumer goods and this is what's interesting if you look at 2019 yeah so this is right before the pandemic remember just kind of a quick history lesson cuz this is this is crazy it doesn't seem like it was that long ago no it doesn't but here we sit almost 5 years we're almost five years to the day not quite but five years a couple weeks when the pandemic really begins to hit the US March yeah that's when it started going bananas but we now know it was at the Super Bowl that's right in Miami you know we we nobody knew all right so here's the point so if we're January 2025 if you go to December 2019 us prices cumulatively are up 23% that's where people are feeling it for instance a 4 pound bag of Domino Sugar now cost $446 that's 74% more than 2019 compared a dozen eggs $44.90 that's 83% more Tide liquid I could keep going on and on why these are the Staples so when you're buying these every week these aren't your splurges yeah you feel it so that's interesting so well this is then that's that's kind I mean it goes back to our our conversation earlier when we were talking about the tariffs and new Administration and that sort of thing if we were feeling it before and it was because of other issues you know back then right now they're saying the prices are up because of you know all sort it could be uh utilities and insurances for businesses to run and so they're passing that along to the consumer it could be extreme weather right with crops and so because of that that prices passing on to the consumer but then if you add I don't know other things coming into this so you're saying basically what you're saying is no the consumer has every right to feel this and even if they have they are it's real yeah so here's what's happened you can't get all hung up in inflation cost per month because what happens is you have large spikes so back to the quick timeline this will be helpful for folks we go into the pandemic Jade starts in let's call it 2020 early 2020 and the whole World shuts down uhhuh all right so in that moment you did have multiple let's call it storms converging for a massive once in a generation I hope Financial storm yeah one the scarcity because we had Supply chains interrupted the whole world shut down for a while every state was different every country it was like what are we doing secondly demand did increase a couple months in when people started going okay I'm at home I'm I'm working from home but I got to have food remember we saw liquor stores things so here's what happened this is interesting so so all of that comes into natural economic factors which makes demand higher uh and scarcity and that created an increase here's what's this article says and it's absolutely right big I'm reading from this article big price increases are rarely followed by equally big price decreases that's right hisor well it's like that's what I want to tell everybody they're not going to it's not going to go back to what it was that's the key Point while the inflation rate has cooled your $4 sugar is here to stay it's not leaving that's what's unfortunate well that and that's unless you get into depression and very serious recessionary forces that can make those go down but by and large if we stay in a somewhat healthy economy Jade these prices are here to stay yeah I mean it's like you said it's gone up 25% but over the last year it's gone up less than 1% so it's not still climbing at that ridiculous rate news good news bad news good news is inflation as we see is cooled bad news is companies don't just go well you know what for The Last 5 Years people have been paying $466 for this sugar and we used to sell it for only $2 let's go back to that they're not going to go back and so there comes in the evil capitalism cries and the rub between and by the way this is the tension that exists in America today absolutely is people go wait a second you used to charge me this now you're charging me this this come on think about it uh so there's the tension Sam and I went out to dinner and you know everybody has the menus on the screen now that you do the QR which I hate because it makes you get your phone out at dinner they figured out that was one of the things that they figured out this is a lot cheaper for us right and we ain't going back yeah they're not going to print menus you know what else they figured out go to the coffee shop in my neighborhood sweet little gal makes me a coffee then turns the screen and goes would you like a tip I feel like going no I just want my coffee woo this is the Ramy show create your free every dooll budget today the simplest way to budget for your life