Post WW2 inflation was nuts here, but post bubble from 1993- 2022 CPI was a cumulative of like 6%. Recent years are closer with long term historical averages, but Im hesitant to think this will be a long term trend. Especially with an aging society many who are on a fixed income, making it politically likely to do all kinds of maneuvers to keep cost of living stable. Also I highly doubt we are on the cusp of fantastical growth the drove Bubble inflation, but I've been wrong before.
Housing costs in much of the country remain stable, sure urban cores do see appreciation. Many products hold the same sticker price for years, with companies quietly shrinking portions rather than hiking prices dramatically. Even after the recent wage hikes, real wages have been flat to negative for decades.
This creates a strange mix: there is inflation, but it is gradual, and the overall cost-of-living shifts feel somewhat muted unless you track them closely. For long-term planning, this is tricky. If you are thinking 10, 20, or 30 years ahead, do you use global inflation averages like 2 to 3 percent a year, or something lower? Wages being essentially flat just makes a murkier picture.
For those of you who plan on living here long term, how are you forecasting your future costs? I'm just assuming 3% inflation for my planning but I wonder if that's too conservative, do I really expect my actual budget to grow 3% annually?
by Effective_Worth8898