On Thursday, CNN aired a segment about the Stotlers, a large family that says they are feeling the effects of inflation. The segment is five minutes long but is entirely about the family grocery shopping. CNN host Brianna Keilar teased the segment in a tweet with a quote from the Stotlers that claimed a gallon of milk has gone from $1.99 to $2.79 recently and, because the large family buys 12 gallons of milk a week, “that’s a lot of money.”
The CNN segment is striking a nerve online in part because "12 gallons of milk a week" is an eye-popping number (the Stotlers have nine kids, they say), and in part because people have been obsessed with inflation over the last several months, and whether or not it is "transitory"—that is, a short-term situation caused by supply chain disruptions, the reopening of the economy after COVID-19 lockdowns, and the general rebound to "normal" after a year in which economic activity was depressed for several months. The Consumer Price Index shows people are indeed paying more for a lot of items, especially for used cars (a result of the shortage in new cars) and gas (which was at abnormally low prices last year). But the milk example makes no sense, because the price of milk has barely risen.
There is some consternation online about whether the $1.99 and $2.79 numbers are correct (the average cost of a gallon of milk has not been as low as $1.99 in several decades). It’s certainly possible that the Stotlers got a gallon of milk for $1.99 at some point on sale, and the $2.79 price as of today is what a gallon of Kroger-brand 2 percent milk costs at the Texas store shown in the CNN clip, according to Kroger’s website.
If the Stotlers’ milk price increase really was due to inflation, that would be a 40 percent jump. Indeed, that would be big, if true, as they say. But that is not what is happening with dairy prices. Ironically, dairy is actually benefiting from among the lowest rates of inflation at the moment, with the BLS reporting dairy prices have risen just .6 percent over the last 12 months. That’s actually slightly less than the targeted annual inflation.
If the price of a gallon of milk actually increased 80 cents, that would result in the Stotlers spending 38 dollars more a month on milk, to be precise. But, like most everything else the Stotlers say about food prices in the segment, it is not backed up by inflation data.
While it is certainly possible the Stotlers recently bought a gallon of milk for $1.99 and now the gallon of milk costs $2.79, this doesn’t mean the price difference is due to inflation. Milk prices are generally volatile, with some regions like Florida more prone to milk prices being all over the place than places like New York. It also follows a distinctly seasonal pattern, according to researchers at the Cornell Program on Dairy Markets and Policy, with prices rising in the fall and declining in the spring.
But it’s not just about milk. While food prices are increasing, they’re not doing so at an especially alarming rate. According to the most recent Consumer Price Index released by the Bureau of Labor Statistics, food prices have indeed gone up a bit, with grocery store prices up 4.5 percent year over year. A healthy rate of inflation is typically regarded as around one to two percent. But it’s also far from crisis levels. By way of comparison, food prices rose 20 percent in 1973 and 12 percent in 1974.
Still, even if the Stotlers aren’t quite getting inflation right, they’re inadvertently getting another economic measure spot on, a metric called Consumer Sentiment. It is a survey the Federal Reserve conducts to find out how people are feeling about the economy. This may sound frivolous for the serious business of measuring the economic health of the U.S., but it’s an important metric. If people are optimistic, they will typically spend more, especially big-ticket items like new houses and cars and vacations, because they feel good about their ability to pay it off. If they’re pessimistic, they might be more hesitant to do so, which is bad for the economy. Consumer Sentiment is really low right now, about the same level it was in April 2020 when most Americans were in some form of lockdown.
The Stotlers may be wrong about the significance of random milk price fluctuations, but their angst over inflation and the general state of the economy is shared by millions of other Americans. That collective angst is affecting not just the outcomes of elections but also the economy as a whole.
It is precisely the set of circumstances that accurate news reporting can help alleviate, with relevant context and expert sources alleviating unfounded fears. Unfortunately, the CNN segment does none of that, presenting everything the Stotlers say as fact, serving as little more than an expensive parrot repeating viewers’ biggest fears back at them.