Despite inflation slowing, prices remain unchanged due to these reasons.

• Consumer spending slowdowns have historically been a significant factor in lowering prices.
• Although over half of Americans claim their financial condition has worsened in the past five years, they continue to spend.
• In the first quarter of 2024, retail sales increased by 2.1% year over year, while consumer spending surged in February and March.

A 27-year-old recipe developer from Boston creates online content that demonstrates how to eat healthily on a limited budget.

It's widely known that prices are increasing in various sectors at the moment, as stated by Lueke in a conversation with CNBC.

Two-thirds of U.S. adults surveyed by CNBC/SurveyMonkey this spring reported that inflation is the primary source of their financial stress. Additionally, the same percentage said they are living paycheck to paycheck. Nearly half of the respondents indicated that they feel they are in a worse financial situation than they were five years ago.

Last January, Lueke launched a social media series featuring grocery lists between $50 and $75, which she transformed into five distinct recipes for her family. Her goal was to demonstrate that it's possible to maintain a healthy diet while reducing grocery expenses.

"Lueke stated, "Shopping on a budget can be challenging. I'm not here to promote toxic positivity or offer advice on how to do it. Instead, I aim to empower individuals to feel more in control of their food costs, even in this one aspect of their lives.""

Disinflation, deflation and the 'money illusion'

According to Lindsay Owens, executive director of Groundwork Collaborative, Americans are a bit puzzled by news of inflation decreasing, but they don't seem to notice any reduction in their own prices.

While inflation slowing down is known as disinflation, a reversal of inflation leading to prices decreasing is referred to as deflation, which is often linked to an economic downturn and possible recessions.

Consumer spending jumped in February and March, leading to a 2.1% increase in retail sales year over year in the first quarter of this year. However, historical data suggests that prices tend to fall more easily than they rise, which may not be the case currently.

A clinical psychologist, Sabrina Romanoff, stated that this cycle is known as money illusion.

"People with money illusion mistakenly believe that a dollar today is worth the same amount as it was the year prior, without considering the impact of inflation on the economy."

In the third quarter of 2023, total credit card balances in the U.S. reached a record high of $1.08 trillion, with nearly half of Americans with credit cards carrying a balance from month to month, according to a November 2023 survey by Bankrate.

The increase in wage data may not align with the consumer experience. Although wages have been increasing since January 2022, the rate of growth has slowed down, and on average, it is only keeping up with the rise in prices. According to an analysis by Bankrate, the wage gap with inflation will not be fully closed until the fourth quarter of 2024.

"Owens stated that for many Americans, wage growth is long overdue, with some going years or even decades without significant wage increases."

The video explains why prices are unlikely to decrease.