Headlines across the country this week reported what appeared to be good economic news for the American people: “Inflation rates continue to fall.” That may be good news for Wall Street, investors, and Federal Reserve economists, but hard-working Americans aren’t breaking out the champagne glasses. They’re not even popping open an extra beer or ordering extra servings at McDonald’s. And there’s a reason for that: Whatever the media tells you, they can’t afford it.

The fact is that there are two economies in America right now: one that looks good for a small percentage of Americans, I call it the headline economy, and it is represented by the Consumer Price Index (CPI), the Dow Jones, and the NASDAQ. And then there is the real-life economy, which is squeezing families living paycheck to paycheck. And there is a huge gap between the two.

The dissonance between the overall economy and the real economy is glaring for two simple reasons: The cost of things that are essential to American life—fixed-cost items that we can’t cut or replace—isn’t adequately captured by the CPI. Moreover, the CPI measures costs month-to-month and year-to-year, but it doesn’t capture how much more Americans are paying for things compared to, say, 2020.

The Real-Life Cost Index, not the CPI, is the number that most Americans Really Feeling. It is the number that Americans really experiencea problem that no amount of high-minded economic talk and government data can solve.

Earlier this week Wall Street Journal has written an article on this very topic, documenting the rise in fixed costs that are crushing household budgets. Items like rent and electricity have increased 10 percent in the last two years, and hard-to-cut expenses like water, sewer and garbage collection have increased nearly 11 percent in the last two years.

Then there are the transportation costs, which include maintenance, payments and insurance. That number has risen a whopping 18 percent in the last two years alone as Americans drive older cars. The average age of a car on the road is now 12 years, a record high. And Americans are financing those cars for longer than ever before – 67 months for a new car loan and almost as long for used car loans.

And then there’s the cost of owning a home. According to the National Association of Realtors, the average monthly mortgage payment in April 2024 was $2,209, up from $1,957 just a year earlier. Worse, according to S&P Global Market Intelligence, the cost of homeowners insurance has increased by over 11 percent in the past year alone and over 40 percent in the past five years. And the number of Americans who forgo homeowners insurance altogether has more than doubled, from 5 percent to 12 percent.

The Wall Street Journal spoke with Jasmine Moore, a 32-year-old nonprofit operations manager and single mother of a 10-year-old son. She recently missed a payment on her car insurance because the amount had doubled from $195 to $395. She described her bank account balance as frequently being close to overdraft and talked about cutting back on things like tutoring her son (which she now does herself) and grocery shopping at discount stores or food banks (she no longer shops at Publix).

“I have a middle-class salary,” Moore told The Wall Street Journal“But I feel like I earn less.”

She is not alone. Millions of Americans feel the same way and are not happy about it, no matter how much positive talk is spread about the economy and skyrocketing stock prices.

Americans are even cutting back on spending on other things, including fast food. McDonald’s, America’s largest restaurant chain, has extended its $5 “Value Meal” offer through August. Joe Erlinger, president of McDonald’s USA, appeared on the Today Show when the offer was first introduced in June and explained the offer. “I’ve traveled all over the country, I’ve been to our restaurants, I’ve participated in focus groups. Customers are telling us they’re really at their breaking point,” Erlinger said of McDonald’s customers. “They’ve felt the pressure of inflation over the last few years, and so this is a great opportunity for McDonald’s to offer them value.”

The company that gave the world the Happy Meal doesn’t engage in the kind of whitewashing we hear from pundits, politicians and economists about the latest inflation and consumer price index numbers. Because they know that the Real-Life Cost Index is putting a strain on family budgets. And putting stress on millions of hard-working Americans.

This tale of two economies continues to play out across America. The politicians who understand the difference between the two economies and speak clearly and bluntly to the causes and solutions to the problem will most likely control not only the White House but also Congress.

To paraphrase Jim Carville, this election is about the real economy, not the headline economy, stupid.

Lee Habeeb is vice president of content for the Salem Radio Network and host of Our American Stories. He lives in Oxford, Mississippi with his wife, Valerie, and daughter, Reagan.

The views expressed in this article are those of the author.