The Consumer Price Index for May ostensibly presents a reassuring picture: A decrease of 0.3% in the general index and annual inflation of 1.9%. However, when breaking the index down into its components, and particularly when examining the food basket, consumer goods, vegetables, fruits, meat, aviation, hotels, and entertainment, it turns out that the picture is much more complex. The index fell, but this does not necessarily mean that the Israeli consumer paid less at the cash register.

The main reason for the decline in the index is not found in the supermarket cart, but rather in more volatile items, led by a sharp drop in the prices of travel abroad. This item decreased in May by 16.9% and pulled the general index downward. On the other hand, other items that are well felt in households actually rose: Fresh fruits rose by 6.7%, hotels and guesthouses rose by 4.9%, clothing rose by 1.9%, and owner-occupied housing services rose by 0.8%.

This is precisely the point where one must distinguish between two worlds: The official index is an important, broad, and well–established national tool, but the cost of living is a family experience. A household does not consume the entire index. It consumes a private basket, depending on family composition, children's ages, shopping habits, residential area, shopping frequency, preference for brands, sensitivity to promotions, supplementary shopping, a pet at home, eating out, deliveries, travel, and vacation.

Therefore, even when the general index falls, the shopping basket of many families can continue to rise.

According to the CBS publication, the Consumer Price Index decreased in May by 0.3% and reached an index level of 104.8 points, average base 2024=100. Since the beginning of the year, the index rose by 1.2%, and in the last twelve months, it rose by 1.9%.

The prominent decreases in the index were recorded in travel abroad, fresh vegetables, milk and dairy products, transportation, and furniture and household equipment. The prominent increases were recorded in fresh fruits, hotels and guesthouses, clothing, culture and entertainment, and housing.

The consumer implication is clear: A decrease in the index is not necessarily a decrease in the cost of living. If the consumer did not fly abroad in May, but bought food, fruits, meat, cleaning products, paid rent, went on a local vacation, or ate out, it is possible that they did not feel the decrease in the index at all.

The food item excluding vegetables and fruits remained unchanged in the May index. Ostensibly, this is good news, but beneath the general headline lies a broad movement between items that became more expensive and items that became cheaper.

On the side of price reductions, decreases were recorded in chicken and turkey liver, processed and frozen meat and poultry products and substitutes, cookies and biscuits, other parts of chicken and turkey, cheese, noodles and spaghetti, oils, mayonnaise, shelf–stable milk, and milk substitutes.

On the side of price increases, rises were recorded in spices, frozen beef, minced beef, canned fish, wines, turkey meat, jams and marmalades, soft drinks, black coffee, soup powders, sugar substitutes, and chocolate.

In other words, the food item remained unchanged at the official level, but different households will experience it completely differently. A family that buys more beef, coffee, drinks, spices, and chocolate will see a different picture than a family that buys mainly chicken, cheeses, pastas, and oils.

Alongside the CBS data, in a sample of influential products conducted by the Retail Research Institute, comparing average consumer prices between April and May, a 1.40% increase was found in the average price of the dry goods basket, excluding animal products and excluding vegetables and fruits.

It is important to emphasize: This is not a sample of all consumer products, but rather a focused sample of influential products. That is, products that appear with high frequency in the household basket, or those that have a significant weight in the consumer's perception of price. Precisely because of this, the figure is important. It does not come to replace the official index, but to present an additional layer of reality: What happens to the cash register prices of products that the consumer sees repeatedly in the shopping cart.

The gap between the official food item and the sample of influential products teaches that even when the index does not present a broad-based increase, the consumer may encounter a price increase in products that are central to them.

The vegetables and fruits item presents one of the best examples of the gap between an average index and an actual consumer basket. According to the CBS, the vegetables and fruits price index rose by only 0.1%. Yet within the item, the picture is far from uniform: Fresh fruits rose by 6.7%, while fresh vegetables decreased by 4.9%.

In the limited sample conducted by the Retail Research Institute on influential items in the vegetables and fruits sector, which includes a weighting of promotions and market days, an actual decrease of 3.20% was found in the average consumer price.

Both data points can coexist. The CBS examines a broad and systematic index, while the Institute's sample examines influential items at actual cash register prices, including promotions and market days. Therefore, a consumer who plans their purchase according to season, promotion, and day of purchase may enjoy a decrease. A consumer who buys out of habit, without adjusting the basket to the price, might encounter a price increase even within a category where some of the items decreased.

The field of meat and animal products well demonstrates the variance between families. The CBS presents decreases in certain parts of chicken and turkey, and simultaneously increases in beef and turkey. The implication is that there is no uniform consumer news here.

A family that relies on chicken and certain frozen products can encounter relief. A family that buys minced beef, frozen beef, or turkey will see a price increase. Therefore, the question is not only what happened to the index, but what exactly enters the family pot.

Minced beef, for example, is a particularly influential product. It goes into meatballs, bolognese, stuffed vegetables, homemade burgers, and family stews. When such a product rises by 2.5%, its impact is broader than the statistical line. It touches on cooking habits, meal planning, family size, and the ability to substitute an expensive product with a cheaper product.

The cost of living is not found only in food. A household also consumes cleaning, hygiene, and grooming products, baby products, and sometimes also pet products. In the CBS publication, a 2.2% increase was recorded in household cleaning materials, a 1.4% increase in various household cleaning utensils, a 1.3% increase in odor absorbers and air fresheners, and a 1.7% increase in baby care products and accessories.

Conversely, pets and related products decreased by 1.2%. Here too, the significance depends on the household structure. A home with a baby experiences a different basket than a home without young children. A home with a dog or a cat experiences a different basket than a household without a pet. Therefore, any attempt to speak of "the Israeli consumer" as a single entity misses the real variance between households.

The travel abroad item decreased in May by 16.9% and was the most significant factor pulling the index downward. This is an important figure, but also a dangerous one in consumer interpretation. Not every household flies abroad in the month of May. Many families do not consume this item at all in a given month, and therefore its impact on the general index is not necessarily felt by them.

Simultaneously, hotels and guesthouses rose by 4.9%, admission fees to entertainment venues rose by 2.0%, and admission fees to gardens, parks, and attractions rose by 1.1%. In other words, those who did not fly abroad, but chose a local vacation or family entertainment, actually encountered a price increase.

This is one of the central points in interpreting the May index: The aviation item can lower the general index, but does not necessarily lower the cost of living for most households. For part of the public, May was not a month of a cheaper flight, but a month of a more expensive food basket, more expensive fruits, a more expensive hotel, and more expensive entertainment.

In the publication of the current index, there is no room to claim directly a sharp change in restaurant prices without presenting a dedicated and explicit item. However, one can understand the pressure on the catering sector through the input components: Frozen beef rose, minced beef rose, turkey meat rose, spices rose, soft drinks rose, black coffee rose, and chocolate rose. On the other hand, some chicken products, cheeses, oils, pastas, and baking products decreased.

Therefore, in the restaurant industry as well, the picture is not uniform. A restaurant that relies on beef, drinks, coffee, and spices faces a different pressure than a restaurant that relies on pastas, cheeses, chicken, or baking products. For the consumer, this may be reflected not only in the price of the dish, but also in the size of the dish, a change in raw materials, fewer promotions, paid extras, delivery fees, or a reduction in the value received.

The May data emphasize once again that the discussion on the cost of living cannot end with the question of whether the index rose or fell. The real question is how the household manages itself in the face of prices.

There is a fundamental difference between a family that manages a planned weekly purchase and a family that buys near the house several times a week. There is a difference between someone who checks for promotions and someone who buys the same brands out of habit. There is a difference between a household that replaces expensive items with cheaper items and a household that continues to buy in the same manner and accepts every price increase as a decree.

The consumption culture actually determines the severity of the blow. The number of people in the home, the children's ages, the existence of a pet, the frequency of shopping, the choice of chain, purchasing during promotions, shopping on market days, loyalty to brands, supplementary shopping near the house, and the extent of eating out—all of these generate a personal index for each family.

The national index can decrease, but the family index can increase.

The May index decreased, but it does not tell a simple story of price reduction. It tells a story of gaps: Between flights abroad and the supermarket basket, between vegetables and fruits, between chicken and beef, between an official index and cash register prices, between families that plan and families that buy out of convenience, and between a national figure and the sensation of the cost of living.

The index is a number. The cost of living is behavior.

A household that manages its basket, checks prices, changes habits, buys according to season and promotion, reduces supplementary shopping, and is willing to substitute brands, can mitigate part of the blow. A household that continues to buy out of habit and convenience alone will continue to feel that prices are rising even when the official index falls.

Therefore, the important question after the May index is not only what happened to prices. The more important question is what the consumer does in the face of prices.