ARI SHAPIRO, HOST:
Among his first executive actions, President Trump told agencies this week to, quote, "deliver emergency price relief to Americans," - with few details. There is a lot riding on Trump's memo, given people's feelings about the U.S. economy and inflation. Wailin Wong and Adrian Ma of The Indicator look at a different way to measure inflation that captures what a lot of people experience every day at the grocery store. It's called ALICE.
WAILIN WONG, BYLINE: ALICE is an acronym. It stands for asset limited, income constrained, employed. It describes households that earn more than the federal poverty level, but can't afford the basics where they live. Stephanie Hoopes is the national director of a research organization called United for ALICE.
STEPHANIE HOOPES: I think it's important to remember that inflation measures the change in the cost of goods, not the actual cost.
WONG: Stephanie is talking about the difference between inflation and the price level. The price level is the average cost of goods and services in the economy. Inflation is an increase in that price level.
ADRIAN MA, BYLINE: Right. So even if the price level isn't going up as much as it was in previous years, the overall level is still elevated. It hasn't come down in a meaningful way. Grocery prices in particular have risen faster than inflation for much of the past few years. They're still 27% above their pre-COVID levels.
HOOPES: ALICE is feeling that every day.
WONG: Stephanie's data shows that nearly 30% of households in the U.S. fall into this category. She says ALICE lives in every community in the U.S.
HOOPES: The term is new, but it's for folks that we all already know - the bank teller, child care, the security guard.
MA: Stephanie's organization has its own measure of inflation called the ALICE Essentials Index.
WONG: And the ALICE basket of goods and services looks pretty different from the one that the Bureau of Labor Statistics uses for the Consumer Price Index. Take food, for example.
HOOPES: ALICE is just buying the basics of, you know, cereal, milk, food at home. In CPI, it includes basic costs at home, but it also includes wine and full meal services and snacks out. And so ALICE already cut those out of the budget.
WONG: The differences between the ALICE index and CPI speak to why inflation hasn't loosened its grip on struggling families. The ALICE index has consistently outpaced CPI for over a decade.
MA: And ALICE households, because they have limited savings and earnings, have fewer ways to maneuver in times of higher prices. They typically can't buy in bulk or stock up.
WONG: They also have less wiggle room to make adjustments.
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WONG: Last week, I met dietitian Bri Kellogg at a supermarket outside Chicago. Bri works at a nonprofit called Beyond Hunger that operates a food pantry. It's seen a huge increase in clientele. Bri says a lot of her job at the food pantry is helping clients find a balance between affordability, healthy eating and something that fits their lifestyle. Processed foods and convenience foods can often be the most budget-friendly.
BRI KELLOGG: You know, we've heard it for years now - like, shop the perimeter, right? But again, reality sets in, and we know that we have to shop some more of those processed and packaged foods in the middle section.
MA: Bri says her food pantry does provide higher-ticket items like fresh meat and produce, and that gives clients some relief on their grocery budget.
WONG: Wailin Wong.
MA: Adrian Ma, NPR News. Transcript provided by NPR, Copyright NPR.
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