According to several media outlets, a man who walked into a McDonald’s in Post Falls, ID, a city of less than 40,000 people on the border with Washington, ordered a modest meal. The price tag was $16.10. He posted a short video on TikTok about the cost of the meal, and the video went viral. Over several weeks, it was seen by millions of people. And it was viewed as a sign that inflation in America had run wild. And, if people don’t have a savings account yields, inflation could be a problem.
People may be used to buying value means a McDonald’s, which can cost well under $10. According to The Washington Post, this order in Post Palls was for a “smoky” double quarter pounder BLT with fries and a Sprite. The burger is a “novelty item,” and McDonald’s presumably added to the total price. A large number of comments about the price were it was proof of inflation.
The video had legs. Related videos about the TikTok video ended up on YouTube. The story was picked up by prominent media outlets, including The New York Post, one of America’s most prominent newspapers based on circulation.
One of the reasons the video was seen and written about so often is that people believe inflation has not died. It is worth testing that assumption. A year and a half ago, the CPI was rising about 8%, and the Fed decided to raise rates to put a brake on rising prices. The Fed’s approach has worked. When the BLS released the CPI data for October, the index rose only 3.2% from the same period a year ago and was flat compared to September.
So. why are people so interested in a $16.10 McDonald’s meal? Probably because, in reality, there is a great deal of inflation in the consumer-based economy. While the Fed’s decision to raise rates repeatedly flattened the increase in the price of many items, it also pushed up loan rates on expensive things, particularly mortgage rates and car loans. While these are just two items, they can be part of a large household budget. If the cost of living rises, does it matter specifically what causes it? Inflation does show up in some people’s heating bills.
The reaction to the $16.10 McDonald’s meal might be an overreaction, but it says much about what people think regarding how damaging inflation is.
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