How Is Everything Outpacing Inflation At The Same Time?

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How is it possible that the price of everything is outpacing inflation at the same time?
We are taught in Economics 101 that we measure inflation by gathering up a basket of goods and services, labelling that the consumer price index and then tracking the weighted cost of that basket over time.
In most months some things will get more expensive, others will get a little bit cheaper but over time we expect that (on average) the basket as a whole will slowly get more expensive… and by the numbers that is exactly what has been happening.
According to the Bureau of Labor statistics, since around mid 2023, that measured inflation rate has been around 3% annually, slowly trending downwards to about two and a half percent today… but uhh… it doesn’t really feel like that does it?
If you think about everything you purchase in a given week you would probably be hard pressed to identify something that is “only” 10% more expensive than it was three years ago… and no Arizona ice tea doesn’t count…
The point is, if this basket of goods is supposed to track average prices, what is there left to bring that average down?
Now you might be thinking about something like this chart here, we looked at it many times before on this channel because it shows that over the last two and a half decades essentials like healthcare, housing, and an education have outpaced inflation but the average has been offset by non-essentials like cheaper cellphones, software and televisions…
As trade deals go it wasn’t great… but today we aren’t even getting this stuff down here.
Computer hardware has basically become a strategic investment,
Playstations that are now almost 6 years old just got a $150 price hike only five months after getting a previous $100 price bump,
the average new car is rolling off the lot with a sticker price close to $50,000,
software has primarily become an ongoing (and very expensive) subscription,
Fast food that used to be a cheap quick convenience has turned into a very expensive treat,
Your energy bills are competing with multi billion dollar data centers
housing, healthcare and education has always been so messed up that it’s barely even worth mentioning anymore…
And beyond all of this tariff disruptions mean that even generic consumer junk is quickly becoming coveted collectables…
So is there actually anything left that is quietly offsetting these statistics and bringing that average back in check? or is this all just another case of lying with statistics?
These are some important questions because… well… with oil prices heading the way they are… none of this is likely to get better any time soon…

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