Inflation is easing. So why does it feel worse?

A detail in the latest City of St. John’s economic snapshot caught my eye — and it speaks to an ongoing rift between what people are feeling and the bigger economic picture.

The city’s report, released Monday, says “inflation slowed to 1.3% in 2025, down from 2.2% in 2024, supported by a 9.9% decline in gasoline prices.”

That’s a pretty low rate — even lower than the 2.3 per cent national rate reported last month.

So why does it feel like the cost of living is still a mighty problem, if not crisis? Are we living out a version of what commentator Kyla Scanlon notably dubbed a vibecession?

There are several explanations out there, and one of them is in the rest of the city’s bullet point on inflation: “However, shelter and food prices remained elevated.”

Housing and food are definitely two key areas where people always notice higher prices. The St. John’s housing market has been tight for some time, and I have done some double-takes about the prices that are being listed for rental problems in particular.

Again, St. John’s is not quite in step with the country. There’s been a national cooling on housing prices, but St. John’s is still hot, in terms of prices that sellers have been able to get in the marketplace.

The supermarket is also a place for raising an eyebrow, and in this regard, we’re no different than the rest of the country. Food basket prices overall are not as out of whack as we sometimes think, but an extravagant price in the produce section (think grapes and other fruit) makes us feel that everything must be soaring.

The CBC show Cost of Living (its name is quite on the nose here!) dealt with this perception issue in its most recent show. You can listen to it here.

There are also other factors at play. Pollster David Colletto (who’s interviewed in the episode above) wrote in his newsletter recently that consumer spending, which has been fuelling GDP, has been hitting a wall in the U.S. and is bound to do the same here in Canada. It’s worth the read.

As for housing, there are things to consider.

The organization representing realtors found that sales in January were actually slower compared to January 2025. That said, the value of houses is up almost 10 per cent. That’s quite a jump in one year.

The number of housing starts in 2025, the city says, amounted to 1,037, and if that sounds like an increase, it was — 19.1 per cent over the year before. The city says the jump is “reflecting strong demand and low inventory.” It makes more financial sense to build now, compared to the depths of the COVID pandemic.

This is a tug-of-war among competing forces in the housing industry, between people seeking (and needing) affordable housing, and sellers and landlords wanting to clear their own hurdles. No one, after all, wants to buy a house and then find that its value has dropped.

I’m struggling, though, to understand how some of the rental prices I’ve seen would yield only a marginal profit. And there’s another huge issue here: the challenging lack of affordable and socially supported housing. These are topics for upcoming posts.

St. John’s, plain and simple, does not have enough housing stock — or at least the right types of what’s needed in the market right now — to meet the demand.

Those issues, combined with eyepopping prices for fruit, are all enough to sting our budget-conscious eyes, regardless of what the empirical data are telling us.