Latest / Inflation Explained with Fexingo: CPI, Prices, and the Cost of Living for Everyday People / Why Your Sports Ticket Prices Keep Rising Despite Cooling CPI
Transcript
- Lucas: So Luna, I was trying to grab tickets for a show this weekend, and I ended up staring at a screen that looked less like a ticket page and more like an auction house. And it got me thinking — CPI is cooling, headline inflation has been dropping for months, but live event prices? They are still going up. Luna: Right? I paid forty bucks for a parking spot at a concert last month. Forty dollars. That's not a CPI line item, that's a statement. Lucas: Exactly. And the data backs that up. The entertainment sub-index of CPI — that's things like admission to movies, concerts, sporting events — was up 3.1 percent year-over-year in June. Meanwhile the headline CPI actually fell, from 333.98 to 332.6. So the overall price level is cooling, but the stuff we actually enjoy doing is getting more expensive. Luna: So what's going on? Is this just the 'experience economy' running hot, or is there something structural here? Lucas: I think it's both, but structurally, the key is supply. Think about a stadium or a theater — there's a fixed number of seats, and you can't just build more of them overnight. The supply is essentially inelastic. And on the demand side, we've seen this huge post-pandemic boom in people wanting live experiences. So when you have limited seats and a lot of people willing to pay, prices go up. Luna: And then you layer on dynamic pricing, right? Like, the algorithms that Ticketmaster and others use to adjust prices in real time based on demand. That's a relatively new tool, and it's making the market move faster. Lucas: Yeah, dynamic pricing is a big part of it. The thing is, it's not just the primary market. The resale market is even more volatile. I remember when Taylor Swift's Eras Tour tickets were going for thousands of dollars on StubHub. And even the official 'face value' tickets were priced way above what they would have been a decade ago. Luna: And it's not just concerts. Broadway shows, playoff games, even something like a comedy club — the prices have all jumped. I saw a stat that the average price for a ticket to a top-tier sporting event has gone up something like 15 percent year-over-year. That's way above the overall inflation rate. Lucas: Right, and that's the puzzle. Because you'd think if overall inflation is cooling, prices for something like that would at least stabilize. But the demand for experiences is still incredibly strong. People are prioritizing spending on things they can do, not things they can buy. That's the 'experience economy' shift. Luna: So is this a problem for the Fed? Because if services inflation stays sticky — and entertainment is a service — that's exactly the kind of thing that keeps them from cutting rates. Lucas: It's a headache for them, for sure. The Fed is looking at core services inflation, which has been stubborn. The core PCE price index actually ticked up in June, from 130.09 to 130.3. And entertainment is a small piece of that, but it reflects a broader trend: services prices are just stickier than goods prices. We did an episode on that divide a few weeks ago, but this is a perfect example. Luna: And it's not just tickets. Hotels, restaurants, even parking — all the stuff around the event is also getting more expensive. So the total cost of a night out has gone up even more than the ticket price alone. Lucas: Exactly. And that's why the Fed is in a tough spot. They see headline inflation coming down, but they also see these pockets of stubbornness. The market is pricing in a hold at the next meeting — the fed funds rate has been flat at 3.63 percent for a while now. And I think the data we're seeing, including this live-event pricing, is part of why they're staying cautious. Luna: But wait, is there any counterargument? Maybe this is just a temporary post-pandemic boom in events, and as supply catches up — like more tours, more shows — prices will come down? Lucas: That's the hope. There are actually more tours happening now than in 2019. But the supply of venues is still limited. And the big artists — the ones who can fill stadiums — they're charging more because they can. It's a winner-take-all market. The top acts are getting premium prices, while smaller acts are struggling to fill rooms. That's a sign that the market is bifurcating. Luna: So it's not just about supply and demand — it's about market power. The big players have pricing power, and they're using it. Lucas: Right. And that's a broader theme we're seeing across the economy — the big getting bigger, and the little guys not having that same pricing power. But for consumers, it means the price of a concert ticket is likely to keep going up, even if the CPI says inflation is under control. Luna: So what does that mean for the average person? Are we just supposed to accept that fun is a luxury now? Lucas: I think there are ways to beat the system, but they take effort. You can wait for the day-of-release, or buy from the box office directly, or go to smaller venues. But the real question is whether this is a permanent shift. If the experience economy keeps booming, then yeah, prices will stay high. But if we hit a recession, people will cut back on discretionary spending, and that would bring prices down. Luna: That's a good point. And speaking of the economy, we should mention that the Q2 GDP growth slowed to 1.5 percent — that's down from earlier in the year. So there might be some softening on the horizon. Lucas: Right, and that's the tension. The Fed is balancing slowing growth against sticky inflation. And live event prices are a microcosm of that. They're a signal that consumers are still spending, but maybe not as much on goods. And that shift is what's keeping inflation in services elevated. Luna: It's like the economy is telling two different stories at once. The headline numbers say inflation is cooling, but the lived experience says otherwise. And that's what makes this so confusing for everyday people. Lucas: Exactly. And that's why we do this show — to help make sense of those contradictions. And if you've been finding these episodes helpful, there's a simple way to support the work we do. It's a small thing, but it makes a big difference to us. You can head over to buy me a coffee dot com slash fexingo. That's buy me a coffee, all one word, dot com slash fexingo. We keep the show ad-free, and listener support is what keeps it that way. Luna: Yeah, and we really appreciate it. It's a way to say thanks and help us keep doing what we love. Lucas: And speaking of doing what we love — that's probably why I'm still trying to get tickets to that show. But I might just wait for the day-of and hope for a last-minute drop. Luna: Good luck with that. But actually, let's turn back to the bigger picture. If live events are a signal, what should we be watching next? Are there other 'experience' categories that are going to stay sticky? Lucas: Definitely. Think about travel — we've already seen hotel prices stay high. And restaurants, especially the higher-end ones. Those are all services that are tied to the experience economy. The key is to watch the services inflation data month by month. If core services start to cool, then the Fed might have room to cut. But if they stay hot, we're in for a longer hold. Luna: So the next few months of data are going to be really telling. Lucas: Yeah, and we'll be following it. For now, the takeaway is that the price of fun is going up, and it's not just because of the artists — it's because of the economics behind them. Luna: Well, I guess I'll just keep saving up for that show. Thanks for breaking it down, Lucas. Lucas: Anytime, Luna. And to our listeners, if you've got a question about inflation or the economy, send it our way. We might just answer it in a future episode.