Key takeaway: Why does everything feel so expensive? Because it is. US consumer prices are about 31% above September 2019, and lower inflation only slows the climb; it never brings prices back. In the 12 months to September 2026, prices rose 3.7% while real average hourly earnings fell 0.7%. More prices are also set by algorithms that use your data, which makes every price harder to trust.
Why does everything feel so expensive? Because almost everything is, and it is not coming back down.
Prices across the US economy sit about 31% above where they were in September 2019, and over the past year they have outrun paychecks.¹ ² ³
I notice it most in the small purchases, not the big ones. Nobody remembers what a sofa cost in 2019. Everybody remembers what a dozen eggs, a lunch sandwich or a tank of gas cost, and the brain keeps quietly running the old receipt next to the new one.
The usual explanation stops at inflation, and I think that misses half the story. The price went up, yes. It also changed what it is. It used to be a number on a shelf. More and more often it is a guess about you.
That second part is why this is not a sequel to our essay at https://thinknarratives.com/articles/the-good-life-got-too-expensive, which was about how the checklist for a normal life grew. This one is about the price tag itself.
The inflation rate is not the price tag
Lower inflation does not mean lower prices. It means prices are rising more slowly from a higher base.
A headline says inflation has cooled, and plenty of people hear that relief is on the way. It is not. The surge of 2021 to 2023 is baked into the level, and the level is what you pay at the register.
The Bureau of Labor Statistics index for all urban consumers stood at 256.759 in September 2019 and 336.940 in September 2026. That is roughly 31% more for the same basket. Groceries bought to eat at home are up about 33% over those seven years, and shelter about 35%.²
The trend has also turned the wrong way. The September 2026 report put prices up 3.7% over 12 months, up from 3.4% for the 12 months to August, with gasoline up 34.2% and airline fares up 22.4%.¹
Paychecks did not keep pace this time. Real average hourly earnings, which is pay after adjusting for prices, fell 0.7% between September 2025 and September 2026.³ In plain terms, an hour of work bought a little less this September than it did last September.
So the first answer is boring and true. The receipt got bigger, it is staying bigger, and lately it grows faster than the paycheck.
Your memory still shops in 2019
I think of it as receipt memory. Somewhere in your head there is a last comfortable price for every routine thing you buy, and each new purchase gets graded against it. The grade is almost always a fail, because the reference price is from a world that no longer exists.
The research on why we hate inflation explains why the grading feels so personal. In surveys of US adults run between December 2023 and January 2024, Harvard economist Stefanie Stantcheva found that 80% believed prices systematically rise faster than wages. When people did get a raise, they tended to credit their own performance or career progress, not an adjustment for inflation.⁴
That is the trick the mind plays. The raise feels earned. The price rise feels taken. You never net the two against each other, because they live in different moral accounts.
The averages are less grim than the feeling. BLS average hourly earnings for private sector workers went from $28.16 in September 2019 to $37.81 in September 2026, an increase of about 34%, slightly ahead of prices over the same stretch.⁵ An average, of course, is a number that has never paid anyone's rent.
If your raise went straight into a bigger lease or a childcare bill, the average is no comfort, which is the trap we described in https://thinknarratives.com/articles/middle-class-is-the-worst-too-rich-to-be-poor-too-poor-to-be-rich. And the mood is wide. In the Federal Reserve's survey fielded in October 2025, 91% of adults called price increases a concern, and 53% called them a major one, still the most common financial worry in the country.⁶
The price that studies you back
The newer reason the feeling sticks is stranger. The fixed shelf price, the idea that everyone standing in the same aisle pays the same amount, is quietly being replaced.
Surveillance pricing is the practice of using personal data, such as your location, browsing history or shopping behavior, to set the price or discount a specific person is shown.
In January 2025 the Federal Trade Commission released early findings from its study of the middlemen who sell this capability, including Mastercard, Accenture, PROS, Bloomreach, Revionics and McKinsey. Staff found these intermediaries worked with at least 250 clients, from grocery stores to apparel retailers, and that inputs could range from precise location and browser history down to mouse movements and what you leave unpurchased in a cart.⁷
The FTC's own hypothetical was a shopper profiled as a new parent being shown higher priced baby thermometers first. Congratulations on the baby. Here is the premium thermometer.
Then someone tested it in public. In September 2025, Groundwork Collaborative, Consumer Reports and More Perfect Union had 437 volunteers shop the same Instacart store at the same time. 74% of items showed up at more than one price. A dozen Lucerne eggs at one Washington, D.C. Safeway came in at five prices, from $3.99 to $4.79.⁸
The average gap between lowest and highest price for an item was 13%, with some items 23% apart, and whole baskets differed by about 7%. The researchers put that at roughly $1,200 a year for a household of four.⁸ Instacart said the tests were randomized and did not use personal data, and on 22 December 2025 it ended item price tests on its platform.⁹
Lawmakers have noticed. Since 10 November 2025, New York has required a notice reading "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA" wherever that kind of pricing is used.⁹ In 2026, Maryland, Connecticut and New Jersey went further and restricted surveillance pricing, mostly aimed at groceries, while lawmakers in at least 11 states considered similar bills.¹⁰
Once you know two people can see two prices, every price becomes a question. That doubt is its own kind of cost.
Rent was the first algorithm most people paid
The biggest bill most households have was being set by software long before grocery apps tried it, and there the problem was not personalization. It was coordination.
The Justice Department and several states sued RealPage, a maker of rent pricing software, in August 2024. The department alleged that its software relied on nonpublic, competitively sensitive information shared by landlords to set rents, and included features designed to limit rent decreases and align pricing among competitors.¹¹
In November 2025, RealPage agreed to a proposed settlement. It would stop using competitors' nonpublic data to set live prices, train its models only on data aged at least 12 months, remove or redesign features that limited price cuts, and accept a court appointed monitor.¹¹ The department has since reached settlements with several large landlords, including a final judgment against Greystar in March 2026.¹²
I want to be careful here. A settlement is not a verdict, and nobody has a clean number for how much rent software added to the average lease. The shape of it still matters. Shelter is up about 35% since 2019, and some share of the people paying it were renting from landlords who fed the same pricing engine.²
You cannot haggle with a recommendation you never see.
Where the algorithm story gets too easy
Now the part where my own headline needs pushing back on, because the algorithm makes a satisfying villain and a weak explanation.
Take shrinkflation, the pricing trick everyone loves to screenshot. The Government Accountability Office looked at BLS data and found that product downsizing accounted for 0.06 of a percentage point of the 34.5% rise in consumer prices from December 2019 to December 2024. In household paper products it added 3.0 percentage points.¹³ Real in the aisle. A rounding error in the total.
The same goes for most of the scariest pricing stories. Instacart's item price tests ran on one platform and have ended. When senators pressed Delta about its use of AI to set fares in 2025, the airline said it uses aggregated data, never individualized prices based on personal data, and that the tool recommends changes in both directions.¹⁴ Airlines have priced by demand for decades anyway.
Meanwhile the biggest movers this year did it the old fashioned way. Gasoline, up 34.2% over the year, accounted for more than half of September's monthly rise on its own.¹ The pump price is posted for everyone, not set by an app that noticed you were nearly empty.
Even the fee fight is partly won. Since 12 May 2025, an FTC rule has required sellers of live event tickets and short term lodging to show the total price, mandatory fees included, up front.¹⁵
So the honest version of my thesis is narrower. Algorithms are not the main reason prices are high. They are a big reason prices feel untrustworthy. That second thing is not small, and it is the part that follows people to bed.
What a price you cannot trust does at 2 a.m.
Money tops the list of worries that keep people awake. In a June 2025 survey of 2,007 US adults for the American Academy of Sleep Medicine, 78% said they had lost sleep over financial concerns, more than over work at 65% or job security at 56%.¹⁶
That fits how money worry is built. It is numerical, unfinished and impossible to resolve at night. You cannot pay the bill at 2 a.m., so the mind does the next worst thing and rehearses it. If you have ever woken at that hour and started doing sums, you will recognize the pattern from our piece at https://thinknarratives.com/articles/waking-up-at-3-am-is-not-the-problem-the-clock-on-your-nightstand-is.
Unpredictable pricing makes the rehearsal longer. A budget is a forecast, and a forecast needs stable inputs. When the grocery total, the rent renewal and the flight home all feel like they might be decided by something watching you, the forecast never closes, and an open loop is exactly what a tired brain refuses to let go of.
Stantcheva's respondents described inflation with words like anger, fear about the future and a sense of unfairness.⁴ None of those is a sleeping mood.
The fixes are smaller than the problem, but real. Compare unit prices, not package prices. Check a price logged out or on another device before you buy something big. And take the AASM's advice seriously: give worries a set time during the day, and keep paper by the bed so the sums leave your head.¹⁶
Same price for everyone, eventually
Here is my prediction. By the end of 2028, at least ten US states will restrict personalized pricing for groceries, and "same price for everyone" will become something retailers advertise, the way "no hidden fees" did once fees became a scandal.
What will not happen is prices going back to 2019. The level is permanent. Wages will catch up in some years and slip in others, and receipt memory will keep grading purchases against a world that is gone.
The only part still up for negotiation is whether you see the price you are paying, and whether it is the same one your neighbor sees. Everything will keep feeling expensive. It does not also have to feel rigged.
FAQ
Why does everything feel so expensive right now? Because prices really are higher. The US consumer price index in September 2026 was about 31% above September 2019, and over the past year prices rose 3.7% while real hourly earnings fell 0.7%. Opaque pricing and fees add to the sense that you are paying more than you should.
Why are prices not going down if inflation is lower? Lower inflation means prices are rising more slowly, not falling. Broad price levels rarely fall for long, so the jump from 2021 to 2023 stays in the base. Relief usually comes from wages growing faster than prices over several years.
What is surveillance pricing? Surveillance pricing means using personal data, such as location, browsing history or purchase behavior, to set the price or discount shown to a specific person. The FTC found intermediaries offering these tools to at least 250 clients, and several US states now restrict or require disclosure of it.
Are wages keeping up with inflation? Over the long run, roughly. BLS average hourly earnings rose about 34% from September 2019 to September 2026, slightly ahead of the 31% rise in prices. Over the 12 months to September 2026, though, real average hourly earnings fell 0.7%, and averages hide many workers who fell behind.
Can financial stress cause insomnia? It is one of the most common reasons people lose sleep. In a 2025 American Academy of Sleep Medicine survey, 78% of US adults said they had lost sleep over financial concerns. If money worries regularly keep you awake for weeks, talk to a doctor or therapist, since persistent insomnia is treatable.
Sources
¹ U.S. Bureau of Labor Statistics, "Consumer Price Index, September 2026," news release USDL-26-1574, 14 October 2026. All items CPI-U up 3.7% over 12 months (3.4% in August); gasoline up 34.2%, energy up 20.4%, airline fares up 22.4%. https://www.bls.gov/news.release/cpi.nr0.htm
² U.S. Bureau of Labor Statistics, CPI-U database, all items (series CUUR0000SA0): 256.759 in September 2019 and 336.940 in September 2026, about 31% higher; food at home (CUUR0000SAF11): 241.543 to 321.758, about 33%; shelter (CUUR0000SAH1): 320.569 to 432.092, about 35%. Percentages calculated from the published index levels. https://data.bls.gov/timeseries/CUUR0000SA0 ; https://data.bls.gov/timeseries/CUUR0000SAF11 ; https://data.bls.gov/timeseries/CUUR0000SAH1
³ U.S. Bureau of Labor Statistics, "Real Earnings, September 2026," news release USDL-26-1575, 14 October 2026. Real average hourly earnings for all employees fell 0.7% from September 2025 to September 2026, seasonally adjusted. https://www.bls.gov/news.release/realer.nr0.htm
⁴ Stefanie Stantcheva, "Why Do We Dislike Inflation?," Brookings Papers on Economic Activity, Spring 2024 (summary 27 March 2024, final version November 2024). Surveys run December 2023 to January 2024; 80% believed prices rise faster than wages; raises credited to performance or career progression; inflation linked to anger, fear about the future and a sense of inequity. https://www.brookings.edu/articles/why-do-we-dislike-inflation/
⁵ U.S. Bureau of Labor Statistics, Current Employment Statistics, average hourly earnings of all employees, total private (series CES0500000003): $28.16 in September 2019 and $37.81 in September 2026, about 34% higher. Percentage calculated from the published levels. https://data.bls.gov/timeseries/CES0500000003
⁶ Board of Governors of the Federal Reserve System, "Federal Reserve Board issues Economic Well-Being of U.S. Households in 2025 report," 13 May 2026. Survey fielded October 2025; 91% cited price increases as a minor or major concern, 53% a major concern, the most common financial concern. https://www.federalreserve.gov/newsevents/pressreleases/other20260513a.htm
⁷ Federal Trade Commission, "FTC Surveillance Pricing Study Indicates Wide Range of Personal Data Used to Set Individualized Consumer Prices," 17 January 2025. Intermediaries including Mastercard, Accenture, PROS, Bloomreach, Revionics and McKinsey worked with at least 250 clients; data from precise location and browser history to mouse movements and abandoned carts; new parent and baby thermometer hypothetical. https://www.ftc.gov/news-events/news/press-releases/2025/01/ftc-surveillance-pricing-study-indicates-wide-range-personal-data-used-set-individualized-consumer
⁸ Groundwork Collaborative, Consumer Reports and More Perfect Union, "Same Cart, Different Price: Instacart's Price Experiments Cost Families at Checkout," 9 December 2025. 437 shoppers in September 2025 tests; 74% of items at multiple prices; eggs at five prices from $3.99 to $4.79; average item spread 13%, up to 23%; baskets about 7% apart, about $1,200 a year for a household of four. https://groundworkcollaborative.org/work/instacart/
⁹ New York State Office of the Attorney General, letter to Instacart on pricing practices and the Algorithmic Pricing Disclosure Act, 8 January 2026. Act took effect 10 November 2025 and requires the notice "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA"; Instacart announced on 22 December 2025 that it was ending all item price tests. https://ag.ny.gov/sites/default/files/letters/letter-to-instacart-on-pricing-practices-letters-2026.pdf
¹⁰ Robbie Sequeira, "States begin banning 'surveillance pricing' that uses personal data to charge more," Stateline, 4 August 2026. Connecticut, Maryland and New Jersey enacted restrictions in 2026; Maryland's grocery law takes effect 1 October 2026; at least 11 states considered similar bills. https://stateline.org/2026/08/04/states-begin-banning-surveillance-pricing-that-uses-personal-data-to-charge-more/
¹¹ U.S. Department of Justice, Office of Public Affairs, "Justice Department Requires RealPage to End the Sharing of Competitively Sensitive Information and Alignment of Pricing Among Competitors," 24 November 2025. Allegations and terms of the proposed consent judgment. https://www.justice.gov/opa/pr/justice-department-requires-realpage-end-sharing-competitively-sensitive-information-and
¹² U.S. Department of Justice, Antitrust Division, "U.S. and Plaintiff States v. RealPage, Inc." case page, updated 4 September 2026. Complaint filed 23 August 2024; final judgment as to Greystar Management Services entered 2 March 2026; further landlord settlements in 2025 and 2026. https://www.justice.gov/atr/case/us-and-plaintiff-states-v-realpage-inc
¹³ U.S. Government Accountability Office, "Consumer Prices: Trends and Policy Options Related to Shrinking Product Sizes," GAO-25-107451, 31 July 2025. Downsizing accounted for 0.06 of a percentage point of the 34.5% CPI increase from December 2019 to December 2024; 3.0 percentage points for household paper products. https://files.gao.gov/reports/GAO-25-107451/index.html
¹⁴ Delta Air Lines, "Delta responds to misinformation around AI pricing," 7 August 2025, publishing its 31 July 2025 letter to Senators Gallego, Blumenthal and Warner. Says it uses aggregated data, has no individualized fares based on personal data, and that recommendations adjust prices in both directions. https://news.delta.com/delta-responds-misinformation-around-ai-pricing
¹⁵ Federal Trade Commission, "FTC Rule on Unfair or Deceptive Fees to Take Effect on May 12, 2025," 5 May 2025. Requires total prices including mandatory fees up front for live event tickets and short term lodging. https://www.ftc.gov/news-events/news/press-releases/2025/05/ftc-rule-unfair-or-deceptive-fees-take-effect-may-12-2025
¹⁶ American Academy of Sleep Medicine, "Worried and wired: What's keeping America awake," 2025, Sleep Prioritization Survey of 2,007 US adults, fieldwork 5 to 13 June 2025. 78% lost sleep over financial concerns, 65% over work, 56% over job security; advice to set aside worry time and keep paper by the bed. https://aasm.org/worried-and-wired-whats-keeping-america-awake/