Latest / Wages and Prices with Fexingo: Cost of Living, Pay Raises, and Workers' Purchasing Power / Your Raise Is Finally Beating the Cost of a Gym Membership
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- Lucas: If you've walked past a Planet Fitness lately and thought, 'Huh, that ten dollar a month thing still works,' you're not wrong. But the bigger story is that your paycheck is finally pulling ahead of that monthly fee — for the first time since before the pandemic. Luna: Wait, gym memberships are actually getting cheaper relative to wages? Because I feel like every time I look at a boutique studio, it's forty bucks a class. Lucas: Right, the high end is a different animal. But the average gym membership — think big-box chains, YMCAs, even some rec centers — has been remarkably sticky on price. According to the Bureau of Labor Statistics, the CPI for 'membership clubs and fitness centers' rose only about 1.2 percent over the past twelve months. Meanwhile, average hourly earnings for private workers hit $37.60 in June, up about 2.4 percent from a year ago. Luna: So wages are growing twice as fast as gym prices. That's a win for the average person who just wants to use a treadmill and some dumbbells. Lucas: Exactly. And it's not just gyms. The overall CPI actually dipped in June — down to 332.6 from 333.98. That's a 0.4 percent month-over-month decline. Core CPI, excluding food and energy, was essentially flat. So we're in this weird moment where headline inflation is cooling faster than expected, and wages are still ticking up. Luna: Let's talk about why gym prices have been so slow to rise. Is it competition? Or is there something structural going on? Lucas: I think it's both. The big-box gym model — Planet Fitness, Anytime Fitness, Gold's Gym — they've been locked in a price war for years. Planet Fitness famously built its entire brand around that $10 monthly rate. They've been reluctant to raise it because their whole marketing pitch is 'affordable fitness.' Even with inflation, they've only nudged it to $10 or $15 in some markets. They make money on sign-up fees, annual fees, and selling drinks and T-shirts. Luna: So the ten-dollar price point is almost a loss leader. They're hoping you don't show up. Lucas: Exactly. The 'no-show' member is their most profitable customer. You pay $10 a month, never go, and they barely have to clean a locker. That model only works if they keep the price low enough that you don't bother canceling. So they've absorbed some inflation rather than risk losing those passive members. Luna: But boutique studios — SoulCycle, Barry's, CorePower Yoga — they've raised prices pretty aggressively. A single class in New York can be $38 to $42 now. That's up from maybe $30 five years ago. Lucas: Right, that's a different segment. Boutique fitness is selling an experience, a community, a status signal. They have higher fixed costs — prime real estate, specialized instructors, branded merchandise. And their customers tend to be higher-income, less price-sensitive. So they've passed on cost increases more easily. But the CPI for that category is actually a blend, and the weighting of big-box chains pulls the average down. Luna: So for someone making the median weekly wage of $1,204 — that's about $30 an hour — a $10 gym membership is 0.8 percent of their weekly pay. That's down from maybe 1.1 percent a few years ago. That's real progress. Lucas: And it's not just gyms. The broader story here is that workers are finally getting some breathing room on discretionary expenses. The Employment Cost Index for wages — that's a broader measure including benefits — rose to 177.5 in the first quarter, up from 176.2. So employers are still competing for labor, even as the economy shows signs of cooling. Luna: But we have to mention the elephant in the room: the stock market has been wobbly. The S&P 500 is down 1.2 percent this week alone, at 7,456. The NASDAQ is off 2 percent. There's clearly some anxiety about growth. Lucas: Yeah, and that's the tension. You've got wage growth still positive, inflation easing, but markets are nervous. The ten-year breakeven inflation rate — a measure of expected inflation — ticked up to 2.24 percent. So bond markets are pricing in that inflation might not keep falling as quickly. And wholesale prices actually declined 0.3 percent in June, mostly on lower gas prices, which is deflationary. So the picture is mixed. Luna: Let's bring it back to the gym membership angle. If wages keep growing at 2 to 3 percent and gym prices stay nearly flat, that's a tailwind for consumer purchasing power. But what about the person who wants the boutique experience? They're still getting squeezed. Lucas: That's the bifurcation. If you're a high-earner, you're probably fine paying $200 a month for unlimited classes. But if you're a service worker making $37,600 a year, that's a different calculus. The good news is that the average gym membership is still one of the cheapest recurring expenses you can have. And as wages rise, it becomes even more affordable. Luna: There's also the at-home fitness boom — Peloton, Mirror, Apple Fitness+. Those are subscription-based too, and they've been cutting prices to retain users. Peloton's all-access membership is still $44 a month, but they've dropped hardware prices significantly. Lucas: Right, and that's another factor compressing the market. If you can get a decent workout at home for $10 to $20 a month, why pay $40 for a gym? The big-box chains have to compete with that. So they're holding prices down to keep members from cutting the cord entirely. Luna: So the takeaway is: for the first time in years, the cost of getting and staying fit is rising slower than your paycheck. That's a small but real win. Lucas: Absolutely. And it's not just gyms — it's a broader pattern we've been tracking all season. Rent, healthcare, education — those are still sticky and high. But discretionary categories like gym memberships, electronics, even some apparel are seeing price discipline. If you're a worker, your raise is finally beating the cost of a few things that matter. Luna: And you know, speaking of things that matter — one reason we can dig into these details without interruption is that we keep this show completely ad-free. No commercials, no sponsorships. That's a choice we made because we want the conversation to be clean and focused on what matters to you. Lucas: Right. And if you find that valuable — if walking through the economy with us has made something click — there's a simple way to support that choice. It's buy me a coffee dot com slash fexingo. No pressure, just an option if you want to keep the show independent. Luna: Yeah, exactly. Now back to the numbers — because I want to talk about one more data point that ties this together. The core PCE price index, which is the Fed's preferred inflation gauge, came in at 130.1 in May, up from 129.67. That's still above the 2 percent target annualized. So the Fed isn't out of the woods yet. Lucas: Good point. And that might be why markets are jittery. Even as headline CPI cools, core PCE is still running a bit hot. The Fed is watching that. If they hold rates higher for longer, it could slow the economy and eventually hit wage growth. So this window where wages are beating gym prices might not last forever. Luna: But for now, it's a nice moment to appreciate. If you're a regular at Planet Fitness, you're actually getting a better deal relative to your paycheck than you were two years ago. Lucas: And that's worth celebrating — in a measured, wonky sort of way.