NATE SILVER: The McDonald’s theory of why everyone thinks the economy sucks.

I wonder how often Jeff Stein and Taylor Lorenz — the authors of a recent Washington Post story on customer perceptions about the economy — eat from chains like McDonald’s and Taco Bell. I’m guessing it’s not very much. Because despite their attempt to frame consumer perceptions about high fast-food prices as “misinformation”, it’s in fact a category where there’s been a big increase in how much consumers are spending, and one that tells us a lot about why Americans are unhappy with the economy overall.

Well, Taylor Lorenz. But read the whole thing, which is quite interesting. Another excerpt:

Inflation — the price of a fixed basket of goods — increased a lot during this period: by 16 percent. But consumption increased by considerably more than that: by 25 percent. That’s right. From December 2020 through June 2023, Americans’ financial outlays increased by 25 percent. It’s not just that the fixed basket of goods was getting more expensive — they’re also putting more in their baskets.3

Now, it’s also true that consumption generally increases at a faster rate than inflation — as Americans get wealthier, they have more money to spend in real dollars. However, over the past few years, between higher prices for the same goods, clever strategies to get you to spend more, algorithmically-driven price discrimination, and pandemic-driven changes in spending habits — for instance, people who work from home are paying more for housing — Americans are really draining their batteries to zero. Here is the personal savings rate, which is now hovering at about 3 percent — about as low as it’s ever been save for a similar stretch just before the financial crisis.

I think people know more about how they’re doing than WaPo writers earning six figures.