Latest / Inflation Explained with Fexingo: CPI, Prices, and the Cost of Living for Everyday People / Why Staying In Is Costing You More Than Going Out
Transcript
- Lucas: So there's this headline from the weekend that I think captures something a lot of us are feeling right now. It's from CNBC, and it's about what they're calling 'funflation' — basically, the idea that staying home isn't the money-saver it used to be. Luna: I saw that. It's almost counterintuitive. For years the conventional wisdom has been: if you want to save money, stay in. Cook dinner, watch a movie, play a board game. Lucas: Right. And that advice probably still works for some things. But when you look at the data, the cost of at-home entertainment has quietly climbed a lot faster than the overall CPI. The latest CPI print we have is for May — the index is at 334.0, up from 332.41 the month before. That's about a 4.9 percent annualised rate, depending on how you calculate it. Luna: And core CPI — which strips out food and energy — is even higher, at 336.1. So the underlying trend is still sticky. Lucas: Exactly. And within those numbers, the entertainment sub-index has been rising faster than the headline. I pulled the Bureau of Labor Statistics data for the recreation category. Year-over-year through May, it's up about 6.2 percent. That's more than a full percentage point above core CPI. Luna: So what's specifically driving that? Is it streaming services? We've seen price hikes from basically every major platform over the past 18 months. Lucas: Streaming is definitely part of it. Netflix, Disney+, Max — they've all raised prices. But there's also a less obvious category: things like board games, puzzles, hobby kits. Those have gone up even more sharply. The average price of a board game, according to NPD Group data, is up about 12 percent year-over-year. Luna: Wow. That's real shrinkflation territory. But it's not shrinkflation in the traditional sense — you're not getting fewer pieces in the box. You're just paying more. Lucas: Right. And it's not just games. Concert tickets, which you'd think are a 'going out' expense, have also surged. The average ticket price for a major tour is up something like 18 percent from a year ago. So if you decide to stay in to save money, but you buy a new board game or rent a movie on Prime Video, you're not necessarily coming out ahead. Luna: And if you do go out, you're also paying more. It's a double squeeze. I wonder if there's a behavioral shift happening — people might be choosing to go out less, but then spending more on the at-home alternatives, so the net effect on their wallet is neutral or worse. Lucas: That's exactly what the CNBC article was getting at. The pandemic-era habits of nesting and cocooning have persisted, but the cost of those habits has inflated. So the old advice of 'just stay in' isn't as reliable. And I think for this show, it's a useful lens because it shows how CPI can be misleading at the personal level. Luna: Yeah, because the CPI says overall inflation is around 4.9 percent, but if your personal consumption basket is heavy on entertainment — which for many people it is — you're experiencing something closer to 6 or 7 percent. Lucas: Exactly. And that gap between official inflation and personal inflation is something we've talked about before. But today the gap is especially wide in this category. So what can people actually do? I think the key is to be intentional. If you're planning a night in, compare the costs. A board game might cost $35 to $50 now. If you only play it once, that's expensive. But if you play it multiple times, the per-use cost drops. Luna: And streaming — you can rotate subscriptions. You don't need all four major platforms at once. That's an obvious one but people forget. Lucas: For sure. And honestly, if today's episode helped you think about your own budget a little differently, that's the kind of value we hope to deliver. If it was worth a coffee to you, you can support the show at buy me a coffee dot com slash fexingo. That's buy me a coffee dot com slash fexingo. It keeps us ad-free and independent. Luna: Yeah, listener support really does make a difference. We don't run ads, so it's entirely thanks to people who find the show useful. Lucas: Alright, back to the numbers. The other thing I want to highlight is that the breakeven inflation rate — that's the market's expectation for inflation over the next 10 years — is at 2.24 percent. That's down from where it was a couple of years ago, but it's still above the Fed's 2 percent target. So the bond market is saying inflation isn't going away completely. Luna: Right. And the Fed funds rate is at 3.63 percent effective. They've held steady for months. So the cost of borrowing isn't coming down, which feeds into everything — including the cost of producing those board games and streaming content. Lucas: Exactly. Higher input costs get passed on. So the 'funflation' trend might not reverse quickly. The question is whether consumers will push back. Will people cancel streaming subscriptions in droves? Will they stop buying games? There's some early evidence of churn in streaming — but it's not a collapse. Luna: And on the going-out side, concert ticket demand seems insatiable. Even with higher prices, shows sell out. So it's a mix of supply constraints and strong demand. Lucas: Yeah, and that brings up another point: the labor market. The June jobs report showed only 57,000 new jobs, and the unemployment rate ticked up to 4.2 percent. Wage growth is slowing. So consumers have less purchasing power overall, which makes these entertainment price increases more painful. Luna: It's a tricky environment. People still want to have fun, but the wallet is tighter. So the smart move might be to trade down — find cheaper alternatives. Instead of a new board game, maybe a deck of cards. Instead of a concert, maybe a local open mic. Lucas: That's a good practical take. The key is to not assume that 'staying in' is automatically cheaper. You have to check the prices. And that's really the lesson from funflation: inflation is category-specific, and your personal rate depends on what you buy. Luna: So next time someone says 'just stay home to save money,' you can say 'well, it depends on what you do at home.' Lucas: Exactly. And that's where we'll leave it. Thanks for listening.