WASHINGTON, D.C. — The Federal Reserve has unveiled a breakthrough in household budgeting: Americans will have more money for groceries once they abandon the financially extravagant ambition of living indoors.
The announcement followed another uncomfortable round of price discussions in which economists explained that inflation slowing down does not mean prices go back down. A family paying $300 for groceries should celebrate if next year’s cart costs only $309 instead of $330. The cart remains mostly empty, but the rate of disappointment has moderated.
Federal Reserve Discovers the Mortgage-Free Grocery Budget
“Housing is an optional lifestyle enhancement,” explained household affordability consultant Warren Pennyworth. “Food is essential. Therefore, the optimal consumer lives behind the supermarket and eliminates transportation costs.”
His model assumes families need no heating, insurance, property taxes or furniture. It also assumes children can be persuaded that sleeping in the minivan is an exciting educational adventure.
One Ohio father tried the new strategy. He canceled his dream of buying a three-bedroom house, purchased an extra carton of eggs and told his wife they had achieved economic freedom. She asked where they would keep the eggs. He admitted the financial model had not addressed refrigeration.
Inflation Slows While Grocery Receipts Continue Growing
The Bureau of Labor Statistics Consumer Price Index measures changes in consumer prices, while the Federal Reserve’s monetary policy information explains how the central bank pursues price stability and employment goals. Neither agency has announced that people should choose between groceries and mortgages.
Nevertheless, Washington has developed a remarkably flexible definition of affordability. A home is affordable if somebody can buy it. Food is affordable if it remains on the shelf. A car is affordable if the payment is lower than the buyer’s entire monthly salary after a 96-month financing agreement.
At a grocery store in Texas, a shopper reportedly stared at a package of beef long enough for the butcher to offer financing. The customer asked whether a steak could be leased. The butcher said yes, provided the customer returned the bones in acceptable condition.
Economists Celebrate a Smaller Increase in Financial Pain
Federal officials insist that inflation expectations matter, which is true. Families insist that actual grocery bills matter, which is also true. Washington’s difficulty is that an economic chart cannot be served for dinner, even with gravy.
Pennyworth proposed a national savings program in which households substitute tap water for milk, sunlight for electricity and positive thinking for mortgage payments. A banker rejected the last suggestion, noting that optimism has never cleared a delinquent account.
The latest household survey found that Americans were cutting back on restaurant meals, vacations and unnecessary purchases. Asked what qualified as unnecessary, one mother pointed to her husband’s new pickup. He pointed to her streaming subscriptions. Their children quietly hid the breakfast cereal.
By evening, the Federal Reserve’s affordability team announced that the average household could save thousands annually by not buying a house, a car or food.
Its economists called the results encouraging. The household called them homelessness.