We’re not in a cost-of-living crisis — yet

Anthony Fox is an insights analyst at World Data Lab, which forecasts how consumers spend across the world’s cities and categories. The World Data Lab estimates and forecasts cited in this piece are the company’s own.

On Nov. 3, U.S. voters elect a new Congress. In an AP-NORC poll taken in mid-October, 84% of voters named the cost of living among their most important issues. The worry was about ordinary bills; in a KFF poll in September, 52% of voters worried about affording food and 51% about utilities. That worry has spurred talk of a crisis in the press, with Bloomberg filing its coverage under “US Cost-of-Living Crisis” and CNBC writing of “the affordability crisis”.

However, this year’s price rises fall short of a cost-of-living crisis in most countries, the U.S. included, as a test based on the International Monetary Fund’s definition shows. The test looks for a spike in essential prices, which happens when the rise in food, housing and transport costs in one quarter beats the country’s usual rise by more than twice its normal swing. By that test, essentials spiked in 10 of 99 selected countries this year. In 2022, the same test caught 62 of them, the U.S., Britain and Germany among them.

The U.S. fell only just short of a spike. U.S. essentials rose 2.7% in the second quarter, the fourth-highest since 2005. None of the three higher quarters was a good time for the U.S. economy, coming in the recession of 2008 and the worst inflation in four decades in 2021 and........

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