Vox: The problem isn’t inflation. It’s prices.

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Life in 2023 means being in a constant state of sticker shock.

You walk out of the grocery store feeling like you’re not really sure what happened, but somehow, your normal fare ran you $50 more than you swear it should have. Did Diet Coke always cost that much? Or eggs? Maybe you’ve been putting off buying that new car in the hope prices go back to where they were pre-pandemic, but you’re starting to feel like the wait is awfully long. Or, the morning after a post-work happy hour, you’re left scratching your head. You swear you had two glasses of wine, but the size of your credit card receipt makes you wonder if it wasn’t four. “How expensive everything is today” is a top theme of conversation. The whole situation can be infuriating.

The root of what’s going on here can feel obvious: blame inflation, which picked up in mid-2021 and throughout 2022. But that isn’t really the issue anymore, at least not at the current rate, because inflation is coming down. The actual problem here is prices.

They’re not going up nearly as much as they were in, say, the middle of last year, but they’re by and large not declining en masse, either. And in most cases, they won’t get back to where they were in the Before Times.

“Inflation in the US is falling relatively quickly compared to all of our other peer countries, and we have the strongest growth out of the recession,” said Felicia Wong, president and CEO of the Roosevelt Institute, a progressive think tank. “But people don’t just want falling inflation numbers, they actually want deflation.”

Deflation probably isn’t in the cards (and the rub is we don’t want it to be). Higher prices might just be the sort of thing we’ve all got to get used to. The truth is we’re never going back to how things were in 2019 — we won’t be returning to the office at the same levels, we’ll never hear “corona” and only think of beer, and that night on the town is going to cost us more than it did before.

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I don’t pretend to have all the answers here, but I think one thing is quite clear: People really do not like paying more for stuff than they used to. That doesn’t mean American consumers aren’t still spending — they are — but they’re mad about it.

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Some prices have declined and will likely bounce around and fall, such as for commodities and goods. Lumber prices, which soared in 2021, have settled. The same goes for eggs. Oil prices and many food prices depend on global factors, from weather to geopolitics, that are impossible to control. Airfare prices have fallen, but they’re likely to pick back up again soon.

In many areas where prices have come down, they’re not where they were pre-pandemic. As the Wall Street Journal noted in October, the prices of a number of items, from milk to gasoline to new cars, have declined from their recent peaks but are still above where they were ahead of the outset of the Covid-19 outbreak.

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Some prices aren’t going to come down at all, meaning your $7 latte isn’t magically going to be $5 like it was in 2015. (On the positive side, with inflation slowing, it’s probably not going to cost $11 next year, either.) The same goes for aggregate prices on the whole.

“The things that people are very price sensitive about and that they really do think about — the price of gas, food prices, price of cars, the price of housing — is all pretty elevated. Cars and housing in particular saw a big shift up and have not declined very much,” Konczal said.

The situation is frustrating to consumers, but it’s important to note that prices suddenly dropping really isn’t a desired outcome — deflation, meaning a broad decline in prices, is generally viewed as a negative by economists.

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The rate of inflation really is slowing (and, if all goes well, will continue to do so), and the disorienting nature of what’s happened in the economy over the past few years will likely fade. Post-pandemic prices will eventually feel normal, and post-pandemic wages should make those prices more feasible — or at least not significantly less feasible than they were before. Sooner or later, sticker shock will feel a little less shocking.

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