Why Everything Feels More Expensive
Inflation is a rate, not a rewind. Here’s what the latest CPI means—and how gouging, fees, and shrinkflation keep life feeling unaffordable.
By TheMurrow Editorial
January 23, 2026
Key Points
- 1Understand the baseline: Inflation can cool to 2–3% while prices stay high because the earlier surge becomes the new normal.
- 2Track what actually hurts: Shelter, groceries, and energy drive lived experience more than averages—especially with frequent purchases and fixed bills.
- 3Name the problem precisely: Price gouging is a narrow, emergency-triggered legal concept; fees and shrinkflation can raise costs even without sticker increases.
The official numbers say inflation has cooled. Your receipts say something else.
A carton of eggs still looks like a small luxury. Rent still eats the biggest slice of the paycheck. Even a “quick” online purchase can turn into a thicket of fees that only appear at checkout. If inflation is down, people ask, why does life still feel so expensive?
Part of the answer is psychological, part is statistical, and part is political. The rest is structural: the post-2021 jump in prices didn’t vanish when inflation slowed—it became the new baseline.
The confusion isn’t a public failing. It’s a language problem. We use “inflation” to mean “everything got more expensive,” but economists use it to mean the rate at which prices keep rising. Those are related, but they are not the same.
“Inflation is a rate of change, not a reset button.”
— — TheMurrow Editorial
Inflation is cooling. The price level is not “coming down.”
The disconnect starts with a simple but crucial distinction: inflation can slow while prices stay high.
Many people hear “inflation is down” and reasonably assume it means prices are dropping back toward where they used to be. But that’s not what the term means in economic reporting. Inflation describes how quickly prices are increasing—not whether they’ve reversed.
In the years after 2021, the U.S. experienced a sharp upward shift in the overall price level. When inflation cools from those elevated rates back toward 2–3%, it doesn’t undo that earlier jump; it just means prices are rising more slowly from a higher base. That’s why the feeling of expense lingers. The baseline moved.
To understand why the headlines and lived experience can both be true at the same time, it helps to look at what the CPI is actually reporting, how it’s constructed, and how it differs from what households notice most: big, unavoidable bills and frequent purchases that hit over and over.
Many people hear “inflation is down” and reasonably assume it means prices are dropping back toward where they used to be. But that’s not what the term means in economic reporting. Inflation describes how quickly prices are increasing—not whether they’ve reversed.
In the years after 2021, the U.S. experienced a sharp upward shift in the overall price level. When inflation cools from those elevated rates back toward 2–3%, it doesn’t undo that earlier jump; it just means prices are rising more slowly from a higher base. That’s why the feeling of expense lingers. The baseline moved.
To understand why the headlines and lived experience can both be true at the same time, it helps to look at what the CPI is actually reporting, how it’s constructed, and how it differs from what households notice most: big, unavoidable bills and frequent purchases that hit over and over.
What the latest CPI actually says
The U.S. Bureau of Labor Statistics’ latest Consumer Price Index report—released January 13, 2026, covering December 2025—puts the headline pace of inflation in familiar territory. CPI-U (all items) rose 2.7% year-over-year in December 2025, with a 0.3% month-over-month increase (seasonally adjusted). Core CPI (excluding food and energy) rose 2.6% year-over-year, with a 0.2% month-over-month increase. Those are the kinds of numbers that, historically, read as “normal.” (Source: BLS)
That’s the good news. The harder truth is that a lower inflation rate does not undo the price surge that came before it. When inflation drops from, say, high levels to 2–3%, the economy hasn’t reversed course; it has merely slowed the speed at which prices continue to rise.
That’s the good news. The harder truth is that a lower inflation rate does not undo the price surge that came before it. When inflation drops from, say, high levels to 2–3%, the economy hasn’t reversed course; it has merely slowed the speed at which prices continue to rise.
2.7%
CPI-U (all items) rose 2.7% year-over-year in December 2025 (BLS). Inflation cooled—but the higher post-2021 price level remains.
The difference between “slower” and “lower”
Inflation describes the slope of the price curve, not the height of the curve. A slowdown means the line is climbing less steeply. It doesn’t mean the line is going back down.
Broad price declines—deflation—are rare, and when they do arrive, they often bring collateral damage: delayed spending, falling business revenues, and job losses. For households squeezed by the cost of living, that’s cold comfort. Still, it explains why “inflation is down” can be true while “my life is expensive” remains equally true.
Broad price declines—deflation—are rare, and when they do arrive, they often bring collateral damage: delayed spending, falling business revenues, and job losses. For households squeezed by the cost of living, that’s cold comfort. Still, it explains why “inflation is down” can be true while “my life is expensive” remains equally true.
“When inflation falls, the climb gets gentler. You’re still on the mountain.”
— — TheMurrow Editorial
Why the numbers don’t match the grocery store
Even accurate national statistics can feel wrong when they collide with daily life. That’s because households don’t experience inflation as an abstract average—they experience it as recurring pressure in the categories that matter most.
CPI is built around a “basket” meant to represent consumer spending across the economy. But daily life isn’t a basket; it’s a set of recurring needs and fixed obligations. Housing and food arrive every month, with limited ability to substitute away. When those categories keep climbing—even modestly—the lived experience remains a squeeze.
The CPI can also feel like it speaks in a different dialect than consumers do. “Core” inflation may be analytically useful, but families can’t subtract groceries and energy from their lives. And even if wages rise, people often compare today’s prices to what they remember paying pre-2020. Expectations lag; the new baseline still feels like a loss.
CPI is built around a “basket” meant to represent consumer spending across the economy. But daily life isn’t a basket; it’s a set of recurring needs and fixed obligations. Housing and food arrive every month, with limited ability to substitute away. When those categories keep climbing—even modestly—the lived experience remains a squeeze.
The CPI can also feel like it speaks in a different dialect than consumers do. “Core” inflation may be analytically useful, but families can’t subtract groceries and energy from their lives. And even if wages rise, people often compare today’s prices to what they remember paying pre-2020. Expectations lag; the new baseline still feels like a loss.
Essentials dominate lived experience
CPI is designed to represent a “basket” of goods and services. Daily life isn’t a basket; it’s a set of pressure points. Housing and food hit the same families, every month, with no easy substitute.
The BLS report itself underscores that reality. The agency noted that shelter was the largest contributor to the monthly increase in December, alongside rising food and energy indexes. If the biggest line items in a budget keep pressing upward—even modestly—households feel inflation as an ongoing squeeze, not a resolved story.
Food is a clear example. In December 2025, the food index was up 3.1% year-over-year, and it also rose 0.7% in a single month. (Source: BLS) That monthly jump matters because groceries are purchased frequently. A cost increase you encounter twice a week lands differently than a price shift embedded in a yearly subscription.
The BLS report itself underscores that reality. The agency noted that shelter was the largest contributor to the monthly increase in December, alongside rising food and energy indexes. If the biggest line items in a budget keep pressing upward—even modestly—households feel inflation as an ongoing squeeze, not a resolved story.
Food is a clear example. In December 2025, the food index was up 3.1% year-over-year, and it also rose 0.7% in a single month. (Source: BLS) That monthly jump matters because groceries are purchased frequently. A cost increase you encounter twice a week lands differently than a price shift embedded in a yearly subscription.
3.1%
The BLS food index was up 3.1% year-over-year in December 2025—plus 0.7% in a single month, making grocery inflation highly visible.
“Core” inflation can feel like a technicality
Core CPI strips out food and energy because those categories are volatile, and economists want a clearer signal of underlying trends. Households don’t get to strip out food and energy.
When the public hears “core inflation is down,” many translate it as “the economy is calming down.” The statistic may be correct, and still fail the test that matters most: whether people can afford the basics without constant tradeoffs.
When the public hears “core inflation is down,” many translate it as “the economy is calming down.” The statistic may be correct, and still fail the test that matters most: whether people can afford the basics without constant tradeoffs.
Wage growth versus the price baseline
Another mismatch is emotional as much as mathematical. Even when wages rise, people compare today’s prices to what they remember paying before 2020. Expectations move slowly. A household can be “keeping up” by some metrics and still feel poorer in day-to-day life because the reference point is the old price level.
The uneven geography of pain: categories matter more than averages
Averages can obscure the lived reality that inflation hits unevenly. The broad headline number is a blend of categories that don’t carry equal weight for households.
If shelter rises even modestly, it can dominate a family’s financial stress because it’s a fixed bill that can’t be meaningfully reduced in the short term. Food inflation can feel even louder because it’s frequent and unavoidable, showing up on receipts week after week. Energy prices can swing quickly, creating whiplash that shapes perception even when the year-over-year rate cools.
This is why the CPI headline can be “normal” while daily life still feels abnormal. Many families aren’t primarily interacting with the average; they’re interacting with a few high-impact categories that behave like gravity.
If shelter rises even modestly, it can dominate a family’s financial stress because it’s a fixed bill that can’t be meaningfully reduced in the short term. Food inflation can feel even louder because it’s frequent and unavoidable, showing up on receipts week after week. Energy prices can swing quickly, creating whiplash that shapes perception even when the year-over-year rate cools.
This is why the CPI headline can be “normal” while daily life still feels abnormal. Many families aren’t primarily interacting with the average; they’re interacting with a few high-impact categories that behave like gravity.
Shelter and the tyranny of the fixed bill
Shelter—rent or mortgage—behaves like gravity in a household budget. You can reduce dining out. You can switch brands. You can postpone a new phone. You can’t easily negotiate rent mid-lease or decide to buy half a month of housing.
That’s why the BLS note about shelter being the biggest contributor to the monthly CPI increase is so salient. Even if other categories cool, shelter can keep the lived experience of inflation alive. A modest monthly rise, repeated, becomes a persistent pressure—especially for renters facing renewal cycles and limited supply.
That’s why the BLS note about shelter being the biggest contributor to the monthly CPI increase is so salient. Even if other categories cool, shelter can keep the lived experience of inflation alive. A modest monthly rise, repeated, becomes a persistent pressure—especially for renters facing renewal cycles and limited supply.
Food inflation is personal inflation
Food prices carry a particular kind of visibility: the receipt is immediate, and the consumption is non-negotiable. A 3.1% year-over-year rise may sound tame next to the peaks of recent years, but the reality is compounding. Higher prices become the new starting point, and each additional increase—like December’s 0.7% monthly gain—builds on that higher base.
Energy: volatility that whiplashes budgets
Energy costs can fall and rise quickly, and those swings alter perception. Even when energy inflation eases, households remember the spikes. The result is a lingering sense that “everything is unstable,” which amplifies the feeling that prices are out of control even when the annual rate has cooled.
“Averages don’t pay bills. Categories do.”
— — TheMurrow Editorial
Inflation versus “price gouging”: what people mean, and what the law means
When prices feel punishing, people often reach for the word “gouging.” Sometimes that’s a moral accusation; sometimes it’s a legal claim. But those are not the same.
In everyday speech, “price gouging” can mean any price increase that feels unfair—especially when companies appear profitable or when a jump seems disconnected from underlying costs. That instinct isn’t irrational: price changes can reflect genuine disruptions, but they can also reflect market power and opportunism.
Legally, though, gouging is typically narrower and more conditional. In much of the U.S., it’s tied to emergencies and governed at the state level, often focused on necessities. That mismatch between cultural meaning and legal meaning is why public arguments frequently stall: one side insists “it’s inflation,” the other insists “it’s gouging.” Depending on the product, market, and timing, both can be partially true.
In everyday speech, “price gouging” can mean any price increase that feels unfair—especially when companies appear profitable or when a jump seems disconnected from underlying costs. That instinct isn’t irrational: price changes can reflect genuine disruptions, but they can also reflect market power and opportunism.
Legally, though, gouging is typically narrower and more conditional. In much of the U.S., it’s tied to emergencies and governed at the state level, often focused on necessities. That mismatch between cultural meaning and legal meaning is why public arguments frequently stall: one side insists “it’s inflation,” the other insists “it’s gouging.” Depending on the product, market, and timing, both can be partially true.
The cultural meaning: “unfair” pricing
In everyday conversation, “price gouging” often serves as shorthand for moral outrage: the sense that a company raised prices because it could, not because costs demanded it. People use the term when they suspect profiteering, especially if corporate earnings appear strong or if a price jump feels disconnected from reality.
That instinct isn’t irrational. Price changes can reflect many factors—supply disruptions, labor costs, demand spikes—but they can also reflect market power and opportunism. The difficulty is that the word “gouging” has a specific legal meaning that is much narrower than its cultural use.
That instinct isn’t irrational. Price changes can reflect many factors—supply disruptions, labor costs, demand spikes—but they can also reflect market power and opportunism. The difficulty is that the word “gouging” has a specific legal meaning that is much narrower than its cultural use.
The legal meaning: emergency rules, state by state
In the United States, price gouging is mostly governed by state laws, typically triggered by a declared emergency or disaster, and generally focused on necessities such as fuel, food, lodging, and building materials. According to the National Conference of State Legislatures (NCSL), 39 states plus D.C. and several territories have statutes or regulations defining price gouging during disasters or emergencies (updated January 21, 2025). (Source: NCSL)
Many state statutes use terms like “unconscionable” pricing or a “gross disparity” compared to pre-emergency levels. Some states use explicit thresholds—often in the neighborhood of 15% to 25%+ above recent averages—while also allowing defenses when sellers can document legitimate cost increases. (Source: NCSL)
Many state statutes use terms like “unconscionable” pricing or a “gross disparity” compared to pre-emergency levels. Some states use explicit thresholds—often in the neighborhood of 15% to 25%+ above recent averages—while also allowing defenses when sellers can document legitimate cost increases. (Source: NCSL)
39 states
According to NCSL, 39 states plus D.C. and several territories have price gouging rules tied to disasters or declared emergencies (updated Jan 21, 2025).
Why the distinction matters
Not all high prices are gouging in a legal sense. Broad inflation can lift prices across the economy without any particular actor breaking a law. At the same time, narrow legal definitions can leave consumers feeling unprotected when prices rise sharply outside a declared emergency.
The public debate often stalls here: one side insists “it’s inflation,” the other insists “it’s gouging.” Both can be partially true depending on the product, the market, and the timing. The honest answer is messier than the slogans.
The public debate often stalls here: one side insists “it’s inflation,” the other insists “it’s gouging.” Both can be partially true depending on the product, the market, and the timing. The honest answer is messier than the slogans.
The hidden-cost economy: when prices rise without “rising”
One reason life can feel more expensive even when inflation cools is that consumers increasingly face costs that don’t show up as straightforward sticker prices.
In many modern purchases—especially online—mandatory or quasi-mandatory fees appear late in the process. The listed price becomes a starting point, not the final bill. This fuels a pervasive sense of being nickeled-and-dimed, and it erodes trust: if the real price is only revealed at checkout, shoppers infer the system is designed to extract more.
There’s also a subtler dynamic: businesses can keep the headline price steady while reducing what’s included. The number doesn’t move, but the value does. Official inflation measures can capture many changes, yet they can’t fully measure the emotional impact of complexity, add-ons, and downgraded defaults.
In many modern purchases—especially online—mandatory or quasi-mandatory fees appear late in the process. The listed price becomes a starting point, not the final bill. This fuels a pervasive sense of being nickeled-and-dimed, and it erodes trust: if the real price is only revealed at checkout, shoppers infer the system is designed to extract more.
There’s also a subtler dynamic: businesses can keep the headline price steady while reducing what’s included. The number doesn’t move, but the value does. Official inflation measures can capture many changes, yet they can’t fully measure the emotional impact of complexity, add-ons, and downgraded defaults.
Posted price vs. paid price
Even when inflation slows, many consumers experience a different phenomenon: the price you see is not the price you pay. Fees, add-ons, and complexity can increase the effective cost of living without showing up as an obvious sticker shock.
The research term for this is drip pricing—a structure in which mandatory or quasi-mandatory charges appear later in the purchase process. The result is a feeling of being nickeled-and-dimed, and it feeds distrust: if the “real” price is only revealed at checkout, shoppers assume the system is designed to extract more.
The research term for this is drip pricing—a structure in which mandatory or quasi-mandatory charges appear later in the purchase process. The result is a feeling of being nickeled-and-dimed, and it feeds distrust: if the “real” price is only revealed at checkout, shoppers assume the system is designed to extract more.
Shrinkflation’s quieter cousin: complexity inflation
Another reason “inflation is down” doesn’t feel real is that businesses can repackage pricing without changing the headline number. A service tier that used to include basics may now require an upgrade. A previously standard feature becomes a paid add-on. The price did not rise; the value fell.
Official inflation measures capture many price changes, but they cannot fully capture the emotional impact of these experiences. People aren’t just reacting to cost—they’re reacting to the sensation of being managed.
Official inflation measures capture many price changes, but they cannot fully capture the emotional impact of these experiences. People aren’t just reacting to cost—they’re reacting to the sensation of being managed.
Key Insight
A stable sticker price can still hide a higher effective cost when fees appear late or when “standard” features quietly move behind a paywall.
Practical takeaway: audit your “invisible inflation”
A useful exercise is to track the categories where pricing complexity shows up most:
- Subscriptions that auto-renew with limited notice
- Travel, ticketing, and delivery fees that appear late
- Insurance premiums and administrative charges
- Add-ons embedded in digital services and apps
The point isn’t to blame the consumer. It’s to recognize why the CPI headline can feel disconnected from the reality of paying for modern life.
- Subscriptions that auto-renew with limited notice
- Travel, ticketing, and delivery fees that appear late
- Insurance premiums and administrative charges
- Add-ons embedded in digital services and apps
The point isn’t to blame the consumer. It’s to recognize why the CPI headline can feel disconnected from the reality of paying for modern life.
“The most demoralizing inflation is the kind you only see after you’ve clicked ‘checkout.’”
— — TheMurrow Editorial
Case studies: three ways expensive life persists even at 2–3% CPI
Even at a “normal” headline inflation rate, household reality can remain harsh. That’s because individual budgets are shaped less by averages and more by a few high-impact categories and pricing structures.
Housing costs can arrive in big, discrete jumps at lease renewal—nothing like a smooth annual curve. Groceries can generate constant feedback that prices are still rising because people see the changes weekly. And fee-based pricing can make the real price higher than the posted one, breeding distrust and the feeling that the rules changed.
These three case studies show how a CPI number like 2.7% can be simultaneously accurate and emotionally unpersuasive—because it doesn’t map neatly onto how the biggest bills behave.
Housing costs can arrive in big, discrete jumps at lease renewal—nothing like a smooth annual curve. Groceries can generate constant feedback that prices are still rising because people see the changes weekly. And fee-based pricing can make the real price higher than the posted one, breeding distrust and the feeling that the rules changed.
These three case studies show how a CPI number like 2.7% can be simultaneously accurate and emotionally unpersuasive—because it doesn’t map neatly onto how the biggest bills behave.
Case study 1: The renter whose “inflation rate” is the lease renewal
Headline CPI at 2.7% doesn’t help a renter facing a large step-up at renewal. Housing costs are lumpy. One decision—your next lease—can reset your monthly reality for a year. That’s why shelter’s role as a key driver in the December report resonates: a household doesn’t experience shelter inflation as a gentle annual average; it experiences it as a cliff.
Implication: Even if inflation is cooling nationally, local housing conditions can keep household stress high. A national number won’t feel persuasive if your largest bill doesn’t behave like an average.
Implication: Even if inflation is cooling nationally, local housing conditions can keep household stress high. A national number won’t feel persuasive if your largest bill doesn’t behave like an average.
Case study 2: The family whose budget is ruled by groceries
Food inflation at 3.1% year-over-year is not abstract; it’s weekly. The December 0.7% monthly increase is the kind of change people notice because it hits repeatedly. Families respond by switching brands, buying less, or cutting elsewhere.
Implication: A modest annual rate can still translate into persistent stress when the category is frequent and unavoidable. Groceries can be the loudest messenger of inflation even when other categories quiet down.
Implication: A modest annual rate can still translate into persistent stress when the category is frequent and unavoidable. Groceries can be the loudest messenger of inflation even when other categories quiet down.
Case study 3: The consumer trapped in fee-based pricing
A household may see stable list prices and still pay more because of added fees and mandatory surcharges. The emotional impact is outsized: it feels like the rules changed. That feeling is what often converts “inflation” into “gouging” in everyday language, even when the legal definition doesn’t apply.
Implication: Trust in pricing matters. Complexity erodes confidence faster than a straightforward price increase, even if the dollar amounts are similar.
Implication: Trust in pricing matters. Complexity erodes confidence faster than a straightforward price increase, even if the dollar amounts are similar.
What to do with the anger: policy, markets, and personal strategy
If the cost of living feels like a grind, it’s not just a personal budgeting problem. Inflation is shaped by demand and supply forces, policy choices, and expectations. Interest rates can cool demand. Supply chains can heal. Energy prices can swing. None of those levers work like a household budget, and none deliver instant relief.
On “price gouging,” enforcement tools exist—but they are often tied to emergencies and vary widely by state. NCSL’s tally—39 states plus D.C. and several territories with gouging rules—sounds comprehensive until you realize how narrow the trigger conditions can be. (Source: NCSL)
At the same time, there are real steps readers can take. You can’t personally lower the national inflation rate, but you can reduce how much of your budget is exposed to the categories that have stayed hot—and you can get sharper about fees and renewals that quietly raise the effective cost of living.
On “price gouging,” enforcement tools exist—but they are often tied to emergencies and vary widely by state. NCSL’s tally—39 states plus D.C. and several territories with gouging rules—sounds comprehensive until you realize how narrow the trigger conditions can be. (Source: NCSL)
At the same time, there are real steps readers can take. You can’t personally lower the national inflation rate, but you can reduce how much of your budget is exposed to the categories that have stayed hot—and you can get sharper about fees and renewals that quietly raise the effective cost of living.
A fair view of the policy debate
Inflation is shaped by demand and supply forces, policy choices, and expectations. Interest rates can cool demand. Supply chains can heal. Energy prices can swing. None of those levers work like a household budget, and none deliver instant relief.
On “price gouging,” enforcement tools exist—but they are often tied to emergencies and vary widely by state. NCSL’s tally—39 states plus D.C. and several territories with gouging rules—sounds comprehensive until you realize how narrow the trigger conditions can be. (Source: NCSL)
A balanced perspective holds two thoughts at once:
- Broad inflation is not automatically corporate misconduct.
- Some markets can still produce unfair outcomes, especially when competition is weak or pricing is opaque.
On “price gouging,” enforcement tools exist—but they are often tied to emergencies and vary widely by state. NCSL’s tally—39 states plus D.C. and several territories with gouging rules—sounds comprehensive until you realize how narrow the trigger conditions can be. (Source: NCSL)
A balanced perspective holds two thoughts at once:
- Broad inflation is not automatically corporate misconduct.
- Some markets can still produce unfair outcomes, especially when competition is weak or pricing is opaque.
Practical takeaways for readers
You can’t personally lower the national inflation rate. You can reduce how much of your budget is exposed to the categories that have stayed hot.
A few high-leverage moves:
- Treat shelter as a negotiation, not a fate. If a lease renewal is coming, start early; compare local comps; ask for concessions or longer-term terms that reduce surprise.
- Make food inflation visible. Track a consistent basket of staples for a month; identify the top cost drivers; swap selectively rather than broadly downgrading quality.
- Hunt the fees. Review subscriptions and recurring charges; look for “optional” add-ons that are functionally mandatory; cancel aggressively.
- Use the right language when complaining. If you suspect illegal gouging, check your state’s emergency declarations and rules; legal claims are strongest when grounded in statute and timing.
A few high-leverage moves:
- Treat shelter as a negotiation, not a fate. If a lease renewal is coming, start early; compare local comps; ask for concessions or longer-term terms that reduce surprise.
- Make food inflation visible. Track a consistent basket of staples for a month; identify the top cost drivers; swap selectively rather than broadly downgrading quality.
- Hunt the fees. Review subscriptions and recurring charges; look for “optional” add-ons that are functionally mandatory; cancel aggressively.
- Use the right language when complaining. If you suspect illegal gouging, check your state’s emergency declarations and rules; legal claims are strongest when grounded in statute and timing.
Audit your exposure to “sticky” costs
- ✓Start lease and housing comparison research early
- ✓Track a stable grocery basket for one month
- ✓Review subscriptions and recurring charges line-by-line
- ✓Watch for add-ons that became “required” to match past value
- ✓Check state emergency declarations before alleging illegal gouging
The deeper implication
The “inflation is down” headline isn’t propaganda. It’s incomplete. It captures the rate of change, not the lived burden of a higher baseline, uneven category pressure, and a pricing culture that often feels designed to confuse.
The most honest way to talk about the moment is simple: the economy may be stabilizing, but the cost of modern life remains elevated—and for many households, that’s what matters.
The most honest way to talk about the moment is simple: the economy may be stabilizing, but the cost of modern life remains elevated—and for many households, that’s what matters.
1) If inflation is 2.7%, why aren’t prices going back to what they were?
Because inflation measures how fast prices are rising, not whether they fall. A 2.7% annual increase means the overall price level is still moving up, just more slowly than during high-inflation periods. To broadly return to older price levels, you’d need sustained deflation, which is rare and often associated with economic pain.
2) What’s the difference between CPI and core CPI?
CPI-U measures price changes across a broad basket of goods and services. Core CPI removes food and energy because they can swing sharply month to month, which can obscure underlying trends. Core is useful for analysis, but households often feel food and energy costs most directly, so core can feel disconnected from daily life. (Source: BLS)
3) What did the latest CPI report actually show?
For December 2025, the BLS reported CPI-U up 2.7% year-over-year and 0.3% month-over-month (seasonally adjusted). Core CPI was up 2.6% year-over-year and 0.2% month-over-month. The BLS also highlighted shelter as the largest contributor to the monthly rise, with increases in food and energy indexes. (Source: BLS)
4) Why does food feel like it’s rising faster than inflation?
Food is purchased frequently and is hard to substitute away from entirely. In December 2025, the food index was up 3.1% year-over-year, and it rose 0.7% in December alone. That combination—higher-than-headline annual growth and a noticeable monthly bump—makes grocery inflation especially visible. (Source: BLS)
5) Is “price gouging” the same thing as inflation?
No. Inflation is an economy-wide rise in average prices over time. Price gouging is usually a legal concept tied to declared emergencies, focused on necessities, and governed mostly by state law. High prices can be driven by inflation without meeting the legal definition of gouging, even if they feel unfair.
6) How common are state price gouging laws?
According to the National Conference of State Legislatures, 39 states plus Washington, D.C., and several territories have statutes or regulations addressing price gouging during disasters or emergencies (updated January 21, 2025). Definitions vary, and many laws include thresholds (often 15%–25%+) and defenses for documented cost increases. (Source: NCSL)
7) What can I do if I think a business is gouging prices?
Start by checking whether your state has a price gouging law and whether a relevant emergency declaration is in effect, since many statutes are triggered by that condition. Document what you paid, the date, and comparable pre-emergency pricing if available. Then report it to your state consumer protection office or attorney general. Even when it isn’t legally “gouging,” public complaints can pressure firms to reduce opaque fees.
T
About the Author
TheMurrow Editorial is a writer for TheMurrow covering explainers.
Frequently Asked Questions
If inflation is 2.7%, why aren’t prices going back to what they were?
Because inflation measures how fast prices are rising, not whether they fall. A 2.7% annual increase means the overall price level is still moving up, just more slowly than during high-inflation periods. To broadly return to older price levels, you’d need sustained deflation, which is rare and often associated with economic pain.
What’s the difference between CPI and core CPI?
CPI-U measures price changes across a broad basket of goods and services. Core CPI removes food and energy because they can swing sharply month to month, which can obscure underlying trends. Core is useful for analysis, but households often feel food and energy costs most directly, so core can feel disconnected from daily life. (Source: BLS)
What did the latest CPI report actually show?
For December 2025, the BLS reported CPI-U up 2.7% year-over-year and 0.3% month-over-month (seasonally adjusted). Core CPI was up 2.6% year-over-year and 0.2% month-over-month. The BLS also highlighted shelter as the largest contributor to the monthly rise, with increases in food and energy indexes. (Source: BLS)
Why does food feel like it’s rising faster than inflation?
Food is purchased frequently and is hard to substitute away from entirely. In December 2025, the food index was up 3.1% year-over-year, and it rose 0.7% in December alone. That combination—higher-than-headline annual growth and a noticeable monthly bump—makes grocery inflation especially visible. (Source: BLS)
Is “price gouging” the same thing as inflation?
No. Inflation is an economy-wide rise in average prices over time. Price gouging is usually a legal concept tied to declared emergencies, focused on necessities, and governed mostly by state law. High prices can be driven by inflation without meeting the legal definition of gouging, even if they feel unfair.
How common are state price gouging laws?
According to the National Conference of State Legislatures, 39 states plus Washington, D.C., and several territories have statutes or regulations addressing price gouging during disasters or emergencies (updated January 21, 2025). Definitions vary, and many laws include thresholds (often 15%–25%+) and defenses for documented cost increases. (Source: NCSL)
