US consumers remain unimpressed with this progress, however, because they remember what they were paying for things pre-pandemic. Used car prices are 34% higher, food prices are 26% higher and rent prices are 22% higher than in January 2020, according to our calculations using PCE data.
While these are some of the more extreme examples of recent price increases, the average basket of goods and services that most Americans buy in any given month is 17% more expensive than four years ago.
If you want to know why Americans are bummed out about their purchasing power, just look at this chart about how wages abruptly stopped increasing with productivity 45 years ago. People are accomplishing more than ever before in history and being left with less buying power. In many cases wages don’t even keep pace with inflation because companies pay based on what they can get away with, not what the work is worth.