The cycle continues. Prices are now dropping as companies have pushed as much as they could.

[97K15004WD]

I've seen this since the 1970s:

Prices go up and companies squeeze all they can from an external "event" (gas crisis, S&L crisis, etc.) - anything that causes "logistics" issues. Oh, and record profits!

Then wages try to catch up - finally making some headway.

People become price conscious and realize they have been taken by the companies (auto manufacturers, car dealerships, fast food places, etc.) and push-back by cutting consumption of the overpriced goods.

Companies start luring customers with "roll-backs", special deals, etc.

https://www.cnn.com/2024/06/20/food/mcdonalds-value-meal-details/index.html

Does anyone really believe this quote from the article?
“Affordable prices and creating memorable moments are what McDonald’s is all about,” said John Palmaccio, a McDonald’s owner and chair of the Operator’s National Advertising Fund. “As small business owners, it’s our responsibility to deliver great value to our local communities when they need it most.”

And the cycle continues...

 

[JoelB]

I think the consumer always loses in these scenarios. Commodity prices really never go back down to anywhere near the pre-inflation spike prices. And wages rarely compensate.

 

[alarmguy]

Gasoline is dirt cheap right now and has been all year and more. $2.89

 

[atikovi]

Companies start luring customers with "roll-backs", special deals, etc.

https://www.cnn.com/2024/06/20/food/mcdonalds-value-meal-details/index.html

What's special about that? They've had a dollar menu for years,

$1 $2 $3 Dollar Menu Items | McDonald’s

Check out $1 $2 $3 Dollar Menu items from McDonald’s to satisfy your cravings for your McDonald’s favorites at a great value!

www.mcdonalds.com

 

[joekingcorvette]

Fast food is one thing I will eliminate if prices get too high and prices have been crazy lately. I just can't see paying over $10 for a burger fries and a drink. People generally vote with their wallets. However housing, taxes, and insurance are a couple areas that still seem out of line for lot's of consumers and there really isn't an easy way to reduce those prices. I do believe inflation is cooling slowly but not fast enough.

 

[cptbarkey]

The main stream media would like to sell you a bridge in the desert.

 

[doitmyself]

I've seen this since the 1970s:

Prices go up and companies squeeze all they can from an external "event" (gas crisis, S&L crisis, etc.) - anything that causes "logistics" issues. Oh, and record profits!

Then wages try to catch up - finally making some headway.

People become price conscious and realize they have been taken by the companies (auto manufacturers, car dealerships, fast food places, etc.) and push-back by cutting consumption of the overpriced goods.

Companies start luring customers with "roll-backs", special deals, etc.

https://www.cnn.com/2024/06/20/food/mcdonalds-value-meal-details/index.html

Does anyone really believe this quote from the article?
“Affordable prices and creating memorable moments are what McDonald’s is all about,” said John Palmaccio, a McDonald’s owner and chair of the Operator’s National Advertising Fund. “As small business owners, it’s our responsibility to deliver great value to our local communities when they need it most.”

And the cycle continues...

I think that's a fair assessment, although the economics experts here will chime in with more detailed attempts to explain why.

I think many of us over-estimate the influence of whichever political party is the "flavor of the time". Really, looking back over 150 years has either party made that much influence? We live under global influences, and the pandemic, whatever you wish to believe, was a huge global impact that we are still growing out of. But lets not go there because it is against policy here. Just making a generalization.

We are mostly idiots that repeat history over and over. Sigh. I'm gonna just quit my comments here.

 

[mrsilv04]

Prices are still going up at the grocery store, at least around here.

 

[Snagglefoot]

Coca Cola is showing signs of this. It peaked at $2.60 CDN ( $ 1.82 US) for a 2 liter bottle. There was a sale for $1.20 CDN and it was price matched by the other stores.

 

[joekingcorvette]

Coca Cola is showing signs of this. It peaked at $2.60 CDN ( $ 1.82 US) for a 2 liter bottle. There was a sale for $1.20 CDN and it was price matched by the other stores.

Yes and some people buy the plain label soda's which really are not too bad. Aldi has a diet Cola that's about half the price of name brands and it actually tastes better IMO.

 

[Snagglefoot]

Yes and some people buy the plain label soda's which really are not too bad. Aldi has a diet Cola that's about half the price of name brands and it actually tastes better IMO.

I find a splash of rum helps with the plain label stuff.

 

[dnewton3]

Gasoline is dirt cheap right now and has been all year and more. $2.89

Partially because the national gasoline supply reserves (actually held regionally) are being purposely drawn down. Do not confuse this with the strategic petroleum reserves. The gas reserves are fully processed and ready-to-use gasoline. The gas storage is being essentially eliminated for a few reasons ...
- it's a dangerous commodity to store in large volumes (both environmental and terror target concerns)
- it degrades quickly in its finished form (it has to be used and replaced often)
- our nation now has a very large capacity for processing raw products into fuels quickly (the highest volume in the world)

So, as these regional volumes are drawn down, the "supply" is a bit more abundant than "normal". Once gone, those supply/demand curves will adjust again.
I'm not saying this is the only reason for retail prices moving up/down, but it is a contributor.
Obviously, pricing goes regionally due to a slew of reasons.

 

[alarmguy]

Partially because the national gasoline supply reserves (actually held regionally) are being purposely drawn down. Do not confuse this with the strategic petroleum reserves. The gas reserves are fully processed and ready-to-use gasoline. The gas storage is being essentially eliminated for a few reasons ...
- it's a dangerous commodity to store in large volumes (both environmental and terror target concerns)
- it degrades quickly in its finished form (it has to be used and replaced often)
- our nation now has a very large capacity for processing raw products into fuels quickly (the highest volume in the world)

So, as these regional volumes are drawn down, the "supply" is a bit more abundant than "normal". Once gone, those supply/demand curves will adjust again.
I'm not saying this is the only reason for retail prices moving up/down, but it is a contributor.
Obviously, pricing goes regionally due to a slew of reasons.

Agree, I guess when it comes to gasoline my past posts convey overall, supply and demand, USA politics, international events and politics (like current Russian oil ban) with peaks and valleys but overall gasoline taking into account inflation gasoline is not any more expensive and most likely cheaper than 50 years ago.

I call it a bargain. The only thing that really drives up the price is local, city, state, Federal tax increases on the gas itself. (trying to find something more current but this is the idea.

Inflation Adjusted Gasoline Prices

Let's look at the inflation-adjusted gasoline prices in February 2022 Dollars to see where prices actually stand.

inflationdata.com

Inflation Adjusted Crude Oil Chart

Inflation-Adjusted Crude Oil Price Chart with nominal Crude oil prices and Crude Oil Prices adjusted for inflation in November 2023 dollars.

inflationdata.com

 

[97prizm]

I've seen this since the 1970s:

Prices go up and companies squeeze all they can from an external "event" (gas crisis, S&L crisis, etc.) - anything that causes "logistics" issues. Oh, and record profits!

Then wages try to catch up - finally making some headway.

People become price conscious and realize they have been taken by the companies (auto manufacturers, car dealerships, fast food places, etc.) and push-back by cutting consumption of the overpriced goods.

Companies start luring customers with "roll-backs", special deals, etc.

https://www.cnn.com/2024/06/20/food/mcdonalds-value-meal-details/index.html

Does anyone really believe this quote from the article?
“Affordable prices and creating memorable moments are what McDonald’s is all about,” said John Palmaccio, a McDonald’s owner and chair of the Operator’s National Advertising Fund. “As small business owners, it’s our responsibility to deliver great value to our local communities when they need it most.”

And the cycle continues...

The cycle continues. You know what's odd. Mountain bike manufacturers had a demand problem during covid. Now several high end mountain bike companies have gone under. I wish someone would step in and buy Kona. Another small company in Denver filed bankruptcy last year etc. Consumer food prices are down 1.6% but unless the dollar really strengthens it'll continue to not come down to pre pandemic prices.

 

[burbguy82]

About 15 years ago, I worked in the oil/NG field out of NE Wyoming, for a company named Key Energy Services. While I was there, I learned quite a bit about energy, and the logistics and politics behind it. Mainly NG workover and completion for Anadarko Petroleum. If you have never heard of Anadarko, then the chances are you dont know much about oil/NG production.....

Anyway, the majority (I am not sure the %) of the land that produces is owned by ranchers, and Federal Govt. Many if not all of them have contracts with energy companies to allow access and work to be done on their land, (this is greatly simplified). Part of this, is full maintenance of the improved gravel roads on the property, as it is used primarily for hauling equipment from site to site. One issue is that there are countless lawsuits having do do with access from private to Federal land, as much of it is landlocked, sometimes it seems strategically. So, at different times of the year, access may not be very good.

One time for instance, a well was in eyeshot, maybe 1000 yards away as the crow flies, but since the rancher was having a dispute with the other rancher, and the other rancher was having a dispute with the Fed, we could not simply move through the cattleguard, literally 100 ft away to access the new well, we had to move several pieces of equipment, 3 hours one way, in the Wyoming snow (which I would argue is likely the worst in the USA). To successfully move all the equipment, it took 4 days, just to move "around the corner".

Another thing is the weather, and the worse thing is not when the weather was bad....in some ways it was good and easy travel when the roads were rock solid. The real issue was in the spring, during the thaw. Roads would become impassable, even with the largest equipment, and many times the rancher would close the roads, because traveling on the roads would damage them so severely. 4' deep of mud is not easy to fix, when you are 30 miles from the nearest paved road.

So, there is a lot more to the prices of things than most realize. Sure many realize that it is a multi faceted issue, but not the specifics. Above are just a few.

 

[Brons2]

McDonalds was expensive before Covid, if you do a sandwich meal and an apple pie for 2 and a happy meal it's close to $30. The gap between fast food and going to a lower price restaurant like Chilis has narrowed.

 

[wwillson]

This CPI conversation can't be held honestly by just saying, "The big corporations are out to get us, they are gouging everyone." There may be an element of that, but the holistic view of the inflationary economy we have been in also discusses the cause of inflation. My degree is in economics and one of the things you learn in money theory is that sustained inflation can not happen without government spending, period. To have an honest conversation, we have to talk about both aspects of why the CPI increased. Government spending and profit driven pricing. The fingers must be pointed in more than one direction.

 

[Brons2]

This CPI conversation can't be held honestly by just saying, "The big corporations are out to get us, they are gouging everyone." There may be an element of that, but the holistic view of the inflationary economy we have been in also discusses the cause of inflation. My degree is in economics and one of the things you learn in money theory is that sustained inflation can not happen without government spending, period. To have an honest conversation, we have to talk about both aspects of why the CPI increased. Government spending and profit driven pricing. The fingers must be pointed in more than one direction.

The supply chain issues and extremely expensive fuel a couple years back didn't help either. Everything is delivered by something that uses fuel.

 

[JeffKeryk]

Econ teaches us, among other things:
Full employment leads to inflation.
Prices will tend to rise until consumption falls to an unacceptable level.

 

[eljefino]

Partially because the national gasoline supply reserves (actually held regionally) are being purposely drawn down. Do not confuse this with the strategic petroleum reserves. The gas reserves are fully processed and ready-to-use gasoline. The gas storage is being essentially eliminated for a few reasons ...
- it's a dangerous commodity to store in large volumes (both environmental and terror target concerns)
- it degrades quickly in its finished form (it has to be used and replaced often)
- our nation now has a very large capacity for processing raw products into fuels quickly (the highest volume in the world)

So, as these regional volumes are drawn down, the "supply" is a bit more abundant than "normal". Once gone, those supply/demand curves will adjust again.
I'm not saying this is the only reason for retail prices moving up/down, but it is a contributor.
Obviously, pricing goes regionally due to a slew of reasons.

And as we saw after Hurrican Katrina, the EPA will grant waivers for the finer details of gasoline, eg RVP, if the nation actually needs it due to a legitimate disruption.

We'll probably get several refineries coincidentally undergoing "maintenance" driving prices up once in a while. But if it comes down to it, rules bend.

As for my household I've been trying like heck to slow spending as I don't like rewarding bad behavior. My wife, on the other hand...