No, 'basics' do not cost $11,000 a year more than they did 18 months ago

USA Today

28-10-2024

The claim: Basic expenses cost a family $11,000 more a year than they did 18 months ago
An Oct. 16 post on Threads (direct link, archive link) makes a claim about the supposed cost of inflation.
'It costs a family of four $11,000 more a year to buy the exact same groceries and basics today as it did 18 months ago,' the post reads.
The post was liked more than 500 times in two weeks.
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Our rating: False
Multiple measures put the annualized inflationary costs for basic goods and services around $3,000, not $11,000.
Slowing inflation narrows gap in cost of 'basics'
Inflation that began during the COVID-19 pandemic has shaken the U.S. economy for years, but recent data shows that the rate has slowed considerably in recent months. That decline is why the claim of an $11,000 hit to household budgets over the past year and a half misses the mark, multiple experts told USA TODAY
John Horn, an economics professor at Washington University in St. Louis, tackled the calculation using changes in the consumer price index as a measure of inflation. He said average monthly household spending in April 2023 was $6,272, which grew to $6,519 in September 2024. The $247 monthly difference in the same basket of goods and other "basics" – multiplying the monthly added costs by 12 – translates to an annualized increase in costs of $2,962.
Horn said the $11,000 figure for inflationary costs is closer to the mark when looking at inflation over the entire Biden administration. Average monthly consumer spending in January 2021 was $5,408, meaning it increased by $1,111 by September 2024. That translates into an annualized cost increase of slightly over $13,000.
Republican members of Congress' Joint Economic Committee used a slightly different basket of expenses than Horn in calculating the impact of inflation, using an undefined 'typical' household, and its results are similar.
The committee created a tracker for inflation costs in every state and nationally since January 2021, and it shows the annualized cost of goods today is about $3,300 higher than it was 18 months ago. At no point does the data show annualized inflation costs growing near $11,000 between any dates 18 months apart.
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Zachary Milne, a senior economist and research analyst with the nonpartisan Common Sense Institute, said the committee's calculations seem to be a fair way of showing the change in the cumulative costs of shelter, energy, transportation and food. But he said a better measure of the impact of inflation would be to look at the cumulative change in costs from January 2021 to today, while also reflecting that average wages have gone up and inflation would still be around 1.5% to 2% annually in a typical year.
Still, the specific impact claimed in the social media post is definitely wrong, he said.
'Inflation has certainly cooled,' he told USA TODAY. 'The increases from 18 months ago are not going to be as dramatic as when looking at the 18 months up to November 2022.'
Reilly White, a finance professor at the University of New Mexico, pointed out that inflation, as measured by the consumer price index, was 4.3% over the last 18 months.
'For the $11k figure to make sense on an annualized basis, an average consumer would have to be spending $458k a year – but the average household only makes $80k,' he wrote in an email.
He pointed to another measure of inflation – the more than 19% increase in personal consumption expenditures cited by the House Budget Committee – as a more complete way of looking at the impact of inflation during the Biden administration. According to that measure, the average family of four is paying more than $17,000 more per year than they did in January 2021.
In other words, inflation is certainly up since Biden took office, but not nearly to the degree this post claims over the last 18 months.
USA TODAY could not reach the Threads user who posted the claim for comment.
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