Latest / Wages and Prices with Fexingo: Cost of Living, Pay Raises, and Workers' Purchasing Power / Why Your Raise Is Finally Beating the Cost of a Night Out
Transcript
- Lucas: So we’ve done a bunch of episodes in this series about how raises are finally beating specific costs — rent, groceries, used cars, even college textbooks. But there’s one category that hits close to home for a lot of people, and we haven’t touched it yet: the cost of a night out. Luna: Dinner, drinks, maybe a show or a game — that stuff really adds up. Are we finally seeing some relief there? Lucas: That’s the question. And the short answer is: it depends on what kind of night out we’re talking about. Let me start with the broad wage picture. The latest data from June shows average hourly earnings for private-sector workers hit $37.60. That’s up from $37.51 the month before, and it’s about a 4.2% increase year-over-year. Luna: Meanwhile, headline CPI actually dipped in June — down to 332.6 from 333.98. So wages are growing faster than prices overall. Lucas: Right. The inflation rate is cooling, and wage growth is still positive in real terms. But when you drill into specific categories, the picture gets more nuanced. Let’s look at food away from home — that’s restaurant meals. Lucas: Restaurant prices have been sticky for a while, but they’ve moderated. In June, the index for food away from home rose just 0.2% month-over-month, and the annual increase is now around 3.8%. That’s down from peaks of over 6% a couple years ago. Luna: So if your raise is 4.2%, you’re actually ahead of restaurant inflation for the first time in a while. That’s a big shift. Lucas: Exactly. The Fed’s latest Beige Book, which came out last week, actually noted that restaurants in several districts are seeing more price-sensitive customers. People are trading down, ordering fewer appetizers, skipping the dessert. So restaurants are holding the line on menu price increases. Luna: That lines up with the wholesale price data too. June producer prices for food and beverages actually declined, thanks largely to a drop in gasoline — lower transportation costs feed into restaurant margins. Lucas: Good catch. The PPI for final demand fell 0.3% in June, and the big driver was a 10% drop in gas prices. That trickles through to everything from delivery fees to the cost of running a kitchen. Lucas: But here’s where the night-out story splits. Dining out? Getting more affordable in real terms. But entertainment — concerts, sporting events, movie tickets — that’s a different story. Luna: I’ve definitely noticed concert tickets being insane. Even for mid-tier acts. Lucas: The CPI data for admission to movies, concerts, and sporting events shows prices up about 7% year-over-year. That’s way above overall inflation. So if your idea of a night out is dinner and a show, the show part is eating into your wage gains. Luna: Right. So the raise beats the dinner, but not the ticket. That’s a mixed picture. Lucas: And there’s another factor: the World Cup. The Beige Book this cycle actually highlighted that bars and restaurants got a nice boost from World Cup viewership. But that also meant some venues raised prices for game-day specials. So that may have nudged up the average check in June. Luna: So the World Cup helped some businesses, but maybe not consumers’ wallets. Lucas: Exactly. The Fed report noted that while restaurants saw more foot traffic, they also saw customers becoming more cautious. So it’s not like a spending spree — it’s a trade-off. Luna: Honestly, if today’s conversation made something click about your own budget, that’s the kind of thing that keeps this show going. If it was worth a coffee to you, you can find us at buy me a coffee dot com slash fexingo. Lucas: Yeah, listener support is what keeps this ad-free and focused on the numbers. Appreciate anyone who chips in. Luna: Anyway — so where does that leave us for planning a night out in July 2026? Lucas: I think the takeaway is: if you’re picking a restaurant, your raise is finally keeping up. But if you’re booking concert or sports tickets, that’s still a pain point. The data suggests you might want to prioritize — maybe a nice dinner out and skip the premium seating. Luna: Or find a free outdoor concert, right? Those are usually cheaper. Lucas: Exactly. The broader trend is encouraging, though. Real wage growth is positive for the first time in a sustained way since before the pandemic. The Employment Cost Index for wages hit 177.5 in Q1, up from 176.23. That’s a 3.2% annual increase, and it’s outpacing core PCE inflation, which was at 2.6% in May. Luna: So the math is finally working in workers’ favor — at least for parts of their budget. Lucas: Right. And that’s the key nuance. The headline is good, but the details matter. Not every category is seeing the same relief. Imported goods, for example — prices from China just hit their highest since 2008. So if you’re buying electronics or clothing, that’s a different story. Luna: But for a night out, the dinner part is getting more affordable. That’s worth celebrating. Lucas: It is. And the data shows that if you’re a typical worker earning median weekly wages of $1,204, you can afford about 22 restaurant meals at the average check of $55. That’s up from about 20 meals a year ago. So progress. Luna: Nice to put a concrete number on it. So what should listeners watch for in the coming months? Lucas: Keep an eye on the next CPI release in August. If restaurant price increases stay below 4%, and wage growth holds, the trend is solid. But also watch the 10-year breakeven inflation rate — it’s at 2.28%, which suggests the market expects inflation to stay moderate. That’s a good sign for sustained purchasing power. Luna: And for those concert tickets? Maybe wait for the off-season. Lucas: Or check secondary markets last-minute. But that’s a whole other conversation.