People don't think of inflation quarter to quarter or even FY to FY. They think of it in terms of what they are calibrated to think "normal" prices are. For most people that's going to be pre-pandemic. Since prices have not returned to pre-pandemic levels the economy is bad. Especially so since their wages haven't gone up comparably to match. This is why the numbers are largely useless at gauging public sentiment. Nobody cares that this quarter the rate of inflation has slowed. They care that chicken breasts cost double what it should. They care that a Ford Mustang GT can cost $50k when they were pretty sure they were $30k. They care that fast food costs as much as a sit down restaraunt should and the sit down costs as much as a nice one should.
Now you can all explain that with numbers and reports but sentiment doesn't care about that. Public opinion is an inherently irrational thing. But it is still incredibly important because elections are decided by it. It doesn't matter if GDP is positive and inflation is good right now if everyone thinks we are in a recession and the prices of everything are too damn high. You will get voted out. I'm not sure why this is a hard concept to grasp.
The economic data indicates that average income has gone up more than prices have since the start of the pandemic. If you look at Real Personal Income (https://fred.stlouisfed.org/series/RPI) it's up 5% relative to the end of 2019.
And if you think inflation is way higher than is being adjusted for, you're simply wrong. The MSRP for a 2023 Mustang GT is $38,345 (https://www.kbb.com/ford/mustang/2023/). The 2020 was $38,320 (https://www.kbb.com/ford/mustang/2020/). The price of Chicken Breast is up 38%, not 100% (https://fred.stlouisfed.org/series/APU0000FF1101).
Yes, public opinion is irrational, but the more obvious political question is why public opinion is so wrong now, when often it is not so pessimistic about the economy.
In 2020 I could get Mustang GT for $8k off MSRP. In 2023 Mustang GT MSRP is $42,495 and there is only $500 off.
To that I would say there is likely a problem with average. I didn't see a break down of the data in your link, but admittedly its my lunch break and I didn't have the time to really dig for it either. But its entirely possible that some groups saw an outsized growth in wages while others didn't.
>The MSRP for a 2023 Mustang GT is $38,345
The MSRP of a Mustang GT is $42k before options https://shop.ford.com/configure/mustang/model/customize/ecob... The GT Premium is $47k
You think the average income is being computed incorrectly? Or that there is just a lot of variance so many people are worse off? It is true that wage increases have been uneven, but they are actually much larger at the low end -- this is why you see the most inflation in low-wage service-heavy categories like restaurants.
Is it public opinion being irrational or governments around the world playing games with "basket of goods", "core" inflation and other bullshit designed to convince their citizens to trust magic math formulas instead of their own eyes?
The large majority of people are doing well. When people say the economy sucks they are largely not talking about their own economic situation. Most people believe that they, personally, are doing well, but that some nebulous "the economy" is doing badly. We have a nation of thriving people who believe everything is falling apart.
https://www.nytimes.com/2023/09/07/opinion/economy-inflation...