Inflation cooling? 5 ways you’re still being pummeled by higher prices
Simone Del Rosario:
Inflation has come way down from its 9.1% peak, so why don’t we feel any better about prices? We did the math and here’s how much prices have really gone up over the past 3 years in this week’s Five For Friday.
The price of a place to lay your head is up 18 percent since September 2020, according to CPI’s shelter index. Redfin says the median asking rent is over $2,000 a month. It was under $1,700 before the inflation train left the station. And forget about breaking out of the renting class to buy. The average sales price of a new home jumped from around $400 grand three years ago to $513k today.
Filling up the fridge in your home is just as bad. Groceries cost 21% more than three years ago, but food inflation has luckily slowed down a lot this year. Eggs have gone from an average $1.35 a dozen to $2.07 now, but who can forget that near $5 spike in January? Milk is up 52 cents to $3.97 a gallon, and a pound of chicken went from $1.54 to $1.90. It may seem small but those cents add up at the register.
Now the cost of eating out has gone up 20% over the last three years and that price inflation is still heating up. When restaurants reopened after COVID lockdowns, many employees didn’t come back. Some just flat out moved on. And the demand for restaurant workers pushed wages up 20% between 2020 and 2022. There are still a lot of openings, forcing some places to turn to robots. Let’s just hope they don’t go rogue.
If you’ve tried to buy a car in the last few years, you know prices are crazy. The CPI says new cars are selling for 22% more than 3 years ago. Kelley Blue Book says the average cost is more than $48,000, 10 grand more than in September 2020. Meanwhile, the price of used vehicles is up, uhh, 22%. The average used car now sells for $27,000, according to Consumer Reports. To make matters worse, the average loan on that used car has an interest rate of more than 11%.
Here’s the kicker, the energy index is up 49% since September 2020. A lot of that has to do with the price at the pump, which is up 73% from those pandemic lows three years ago. Demand roared back during the pandemic while production stalled a bit, and Bob’s your uncle. Higher gas prices, hitting $5 bucks a gallon over the summer of ‘22. But you know the cure for high prices is high prices! Domestic oil production is expected to hit a record in 2023.
So we’ve spent a lot the past three years. But a lot of things are off their absolute highs and some things that have even fallen the last 2 years, like electronics and rental cars. So buy a TV and feel better about yourself. That’s Five For Friday. I’m Simone Del Rosario and it’s Just Business.