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Taco inflation

Viewers find this commercial intriguing because, despite being over four decades old, its message about the value of money — “a dollar just isn’t what it used to be” — remains timeless. Inflation’s persistent erosion of purchasing power is a challenge that resonates across generations.

In the comment section, many users noted the significant rise in prices over the decades.

“Today that will be $53,” the top comment reads. Another commenter observes, “1 taco is like $3 now.”

However, not everyone agrees that inflation was easier to deal with back in 1980. One commenter pointed out, “$21.31 in today’s dollars after you adjust for inflation. Keep in mind that inflation was $12.5% in 1980, so no, this was not a good price and inflation was a s— ton worse then than it is now.”

The commenter raises a salient point. In 1980, the annual percentage change in the consumer price index in America was a staggering 13.5% — and that’s following an 11.3% increase the year before. In other words, while the prices in the commercial might seem low by today’s standards, they’d be perceived differently during a time of high inflation.

In recent years, Americans have also grappled with rising price levels. For instance, in June 2022, the consumer price index registered a 12-month increase of 9.1%, the largest jump recorded since November 1981.

The U.S. Federal Reserve has responded with significant interest rate hikes. These measures have helped cool headline inflation: in June, the CPI showed an annual increase of 3.0%.

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How much would the meal cost today?

This resurfaced commercial also sparked a discussion on Reddit, where many users attempted to determine how much the meal would cost today.

Some used inflation calculators to make their estimates. One user humorously noted, “I tried 4 different inflation calculators, they came back at: $22.57; $31.72; $21.31; $20.99. The second one must be from California,” referencing the high cost of living in the Golden State.

According to the inflation calculator from the Federal Reserve Bank of Minneapolis, $5.59 in 1980 would be worth approximately $20.67 in 2023 dollars.

You can also compare current prices at Taco Bell to get an idea of how much a similar meal would cost today. According to the restaurant’s menu, a typical taco costs $2.99, a bean burrito will run you $1.79, while the Big Cheez-It Tostada is $3.99. Pintos N Cheese costs $2.59 and a Drinks Party Pack, which includes four medium fountain drinks, is $4.00.

If you were to order two tacos, two bean burritos, two tostadas, one Pintos N Cheese, and four soft drinks like the family in the commercial, it would cost:

2 Tacos: $2.99 x 2 = $5.98 2 Bean Burritos: $1.79 x 2 = $3.58 2 Tostadas: $3.99 x 2 = $7.98 Pintos N Cheese: $2.59 4 Soft Drinks: $4.00

Total: $5.98 + $3.58 + $7.98 + $2.59 + $4.00 = $24.13

This estimate aligns with some of the internet users’ calculations but is notably lower than the $53 suggested in the top Instagram comment.

Despite rising prices, Americans continue to frequent the fast-food chain. In Q1 of 2024, Taco Bell’s U.S. system sales increased by 4%, with same-store sales growing 2%, according to the latest earnings report from its parent company Yum! Brands.

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Jing Pan Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

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