If you’ve turned on the news recently, you’ve probably heard that the economy is doing well. The stock market is hitting new highs. Unemployment is low. And inflation? According to the headlines, it’s “cooling.” But walk into a grocery store, fill up your gas tank, or try booking a vacation, and you might be wondering: What economy are they talking about?
While key economic indicators may look rosy on paper, the reality for many Americans is starkly different. Prices on everyday goods and services are still painfully high, and consumers are feeling the pressure in their wallets.
Inflation May Be Slowing—But Prices Aren’t Falling
It’s true that the rate of inflation has dropped from its 2022 peak of 9.1%. As of June 2025, the Consumer Price Index (CPI) rose 3.2% year-over-year, according to the Bureau of Labor Statistics. That’s an improvement, but let’s be clear: prices are still going up—just more slowly than before.
And since inflation compounds over time, this “slower” growth is building on top of already-inflated prices. For example:
- Grocery prices are up more than 20% compared to pre-pandemic levels.
- Restaurant meals have increased by 25% since 2020.
- Car insurance premiums surged over 20% year-over-year in 2024, and they’re expected to rise again in 2025.
- Utility bills, rent, and health insurance premiums have all continued their upward climb.
Even if inflation disappeared tomorrow, we’d still be stuck with these new high price levels. That’s the nuance many media outlets fail to emphasize.
Brands Are Still Raising Prices—And They’re Not Done Yet
Several major consumer goods companies have already announced new price hikes in 2025. For instance:
- Procter & Gamble, maker of Tide and Gillette, raised prices again in Q1 2025, citing higher costs for raw materials and transportation.
- PepsiCo and Coca-Cola signaled they plan to continue “price-pack architecture adjustments”—corporate-speak for shrinkflation and price increases.
- General Mills and Nestlé have warned of more price adjustments later this year.
These increases aren’t necessarily driven by inflation alone. Many companies are raising prices because they can. After testing the waters with price hikes during the pandemic, they’ve learned that consumers—albeit begrudgingly—will pay.
Consumer Sentiment Says It All
Despite the media spin, American consumers remain skeptical. According to the University of Michigan’s Consumer Sentiment Index, confidence remains well below pre-pandemic levels. In July 2025, the index sat at 72.6, up from 2022’s low of 50 but still far from the 90+ range seen before 2020.
A recent Pew Research Center study found that 65% of Americans say their incomes are not keeping pace with the cost of living, and more than 50% are cutting back on discretionary spending.
So, What’s the Disconnect?
Economists and policymakers focus on macro-level statistics. Consumers, however, live at the micro level—buying groceries, paying rent, managing credit card bills. While Wall Street cheers a 3.2% CPI, Main Street groans at a $7 box of cereal.
The media often parrots official stats without asking the obvious question: Are people better off today than they were two or three years ago?
For many, the answer is no.
Yes, the economy might be growing. Yes, inflation is “cooling.” But that doesn’t mean life is getting cheaper. Until prices stabilize—or incomes rise in proportion to those prices—the average American will continue to feel squeezed.
Consumers don’t care what the data says. They care how the economy feels. And right now, it still feels expensive.
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