Latest / Wages and Prices with Fexingo: Cost of Living, Pay Raises, and Workers' Purchasing Power / How Your Raise Is Finally Beating the Cost of Staying Home
Transcript
- Lucas: There's this idea that staying home is the frugal choice. Cook dinner instead of going out, stream a movie instead of buying theatre tickets, skip the bar and have a drink on the couch. But if you've looked at your credit card statement lately, you know that 'staying in' has gotten weirdly expensive. Luna: Funflation. CNBC had a piece on it just yesterday. The concept that the stuff you do for fun — even at home — is costing more. Lucas: Exactly. And this is a perfect episode for our series on whether your raise is finally beating specific costs. We've covered rent, car insurance, streaming services, even coffee. But the cost of the entire stay-at-home bundle — that's a new angle. So here's the question: is your paycheck actually keeping up with the price of a quiet night in? Luna: And before we dive into the numbers — and I know we have some fresh data — I want to mention something. This show is ad-free, and that's because a small group of listeners chip in monthly at buy me a coffee dot com slash fexingo. If you've found these conversations useful, that's what keeps them going. Lucas: Yeah, it really does. No ads, no sponsors pushing a narrative — just the data and our takes. And we're grateful for everyone who's part of that. Okay, so let's anchor this in the latest figures. Lucas: Average hourly earnings for private workers hit $37.60 in June, up from $37.51 the month before. That's a solid increase, but we need to see what that buys you in the home economy. Luna: Right. Because the CPI is still climbing — it's at 334.0 in May, up from 332.41. But we should look at the components that matter for a night in. Lucas: Let's break it down into three buckets: entertainment content, food at home, and the utility costs — energy and internet. First, streaming. We've talked about this in episode 93, but the landscape keeps shifting. Netflix's standard plan is now $16.50 a month, up from $15.50 last year. That's a 6.5 percent increase, which is actually above the overall inflation rate. Luna: But wage growth is running around 4 percent year-over-year. So streaming is still outpacing raises. Lucas: Broadly, yes. But here's where it gets interesting: the core PCE, which is the Fed's preferred inflation measure, is at 130.1 in May, up from 129.67. That's only a 0.3 percent monthly increase. So the pace of price increases is slowing. And wages are still growing at a decent clip. Luna: So the gap is narrowing. But what about the other big home expense — takeout? DoorDash and Uber Eats have been hiking delivery fees and adding service charges. Lucas: Yeah, food away from home is up about 4.5 percent year-over-year, according to the CPI. But food at home — groceries — has actually been moderating. The CPI for food at home rose only 1.2 percent over the last year. So if you cook, you're winning. Luna: That's a big if. But the data suggests that the cost of ingredients is manageable. It's the convenience premium that's eating into your raise. Lucas: Exactly. And then there's the cost of the home itself — energy and internet. The 10-year breakeven inflation rate is at 2.24 percent, which tells you the market expects inflation to stay moderate. But energy costs are volatile. Natural gas prices are down from last year, but electricity rates are up about 3 percent. Luna: So your AC or heater is costing a bit more, but not catastrophically. And broadband? That's been surprisingly sticky. Lucas: Broadband prices rose about 4 percent last year, according to the CPI. That's roughly in line with wage growth. So your raise is basically keeping pace with your internet bill, but not gaining ground. Luna: So where does that leave us? If you add up streaming, takeout, groceries, energy, and internet — the full stay-at-home bundle — is your raise ahead or behind? Lucas: We can compute a rough estimate. Let's say the average household spends about $500 a month on these categories combined. If that basket is inflating at 3 percent annually, that's $15 more per month. Meanwhile, the average worker earning $37.60 an hour working 40 hours a week saw their weekly pay go up by about $15 from a year ago — roughly $60 a month. So yes, your raise is beating the cost of staying home. Luna: But with a big caveat: that assumes you're not upgrading your habits. If you add another streaming service or order takeout three times a week, you'll blow past that raise quickly. Lucas: Right. The raise beats the cost of the same basket. But if your definition of 'staying in' expands, the math changes. And that's the funflation trap — you start treating home as a premium experience, and suddenly you're spending what you used to spend on a night out. Luna: It's almost like the psychology of 'treat yourself' has migrated from restaurants to your living room. And companies know it. Lucas: They absolutely do. The margins on streaming and delivery are thin, so they're constantly testing price increases. But the good news from the data is that the core inflation rate is cooling, and wages are still growing. The 10-year breakeven at 2.24 suggests the market thinks this trend continues. Luna: So the bottom line: your raise is finally beating the cost of staying home, but only if you keep your stay-at-home habits in check. Lucas: That's the takeaway. And if you want to see how your own spending stacks up, the Bureau of Labor Statistics has a great interactive tool called the Consumer Expenditure Survey. You can plug in your income and see how your spending compares to the average. We'll link it in the show notes. Luna: Good recommendation. And if you found this useful, you know where to find us — buy me a coffee dot com slash fexingo. We'll be back tomorrow with another episode. Lucas: Until then, enjoy your night in — just maybe skip the premium subscription for a month. Luna: Yeah, or cook that pasta you've been meaning to try. Lucas: Exactly. Take care, everyone.