Stealth Inflation at the Grocery Store: Less Product for the Same Price

Era of “Supertall” Buildings . . . & Packaging

People commonly think inflation means paying more for the same amount.

But, paying the same price for a smaller amount also qualifies as inflation.

In the last year, I’ve noticed everything from cereal to orange juice to Murphy’s Oil(!) being packaged in ever more svelte containers.

When your $3.25 suddenly only buys 54 ounces instead of 59 ounces of something, guess what?

The price effectively just jumped almost 12%!

Other examples of newly-shrunk packaging: detergent, Halloween candy (can it possibly get any smaller??), and (yup) airplane seats.

Example #2: More for Less

What does all this shrinkage, umm . . . add up to? (sorry).

My guess: government inflation statistics — officially around 2% annually — undercount the actual rate of inflation in today’s economy.

Meanwhile, what economists call “hedonics” also serve to depress officially reported inflation.

Exhibit A: modern PC’s that are literally thousands of times more powerful than early models AND cost much less.

The government’s inflation numbers register such a value proposition as a BIG drop in prices . . .

See also, “New Architectural Wonder (not on the Manhattan skyline ” in the cereal aisle).”