I saw this infographic on X about inflation in the U.S based on product type. The info graphic shows that inflation is not being caused by people spending like crazy on things they don't need, it is being caused by basic necessities of life becoming more expensive than most people can keep up with right now.
Screenshot attributed to Visual Capitalist on X
The way we usually think about inflation is that things are just getting more expensive as time goes on but this isn't entirely true.
The things that are going up in cost are basically unavoidable. Food, electricity, rent, hospital bills. Those aren't things you buy when you feel the urge. You actually need these items in order to survive and to do your day to day jobs.
What are some things that you're going to be spending less money on? Clothing, electronics and even phone plans are all cheaper right now. But who cares? You can't eat a laptop.
I don't know, maybe it's just me, but it seems like when you cut back on spending like this doesn't matter anymore. Yes, you can decide not to buy a new pair of shoes, but that doesn't help you when you find out that your electric bill went up again last month. Or when the price of beef is nearly double what it used to be.
That's one of the reasons that so many people feel broke even when they're trying to be careful about how they spend their money. Their savings are just disappearing because they have to spend them on rent, food, and fuel. Lower income households are definitely being hit the hardest by this, but we're currently in a position where even mid income earners are feeling this right now.
And I think that's one of the reasons why it hurts so much right now, even if the headlines are telling you that inflation is either moderating, cooling off or whatever terminology they're using this week.
