Consumers pay a high price for these 3 common goods and services
Jhe US Bureau of Labor Statistics recently released June data for the Consumer Price Index (CPI), which tracks the prices of a basket of consumer goods and services. Investors use the CPI as a way to measure inflation.
In June, the CPI rose 9.1% year-on-year, higher than economists expected and showed inflation remained elevated in June. Here are three everyday goods and services that consumers paid top dollar for during this period of high inflation.
Nothing pushed the CPI higher in June than record gasoline prices. The cost of all types of gasoline rose 11.2% year over year after increasing only 4.1% year over year in May. Gas prices were fueled by strong demand as the pandemic subsided and Russia’s continued invasion of Ukraine, which led to various bans and embargoes on Russian oil by many European countries and the United States, the average cost of a gallon of regular gas topped $5 a month ago.
Although gasoline is expensive, it’s also one of the reasons why investors might take a breather on the 9.1% rise in the CPI, according to the White House, which issued a statement on the CPI report when it came out, saying:
While the current reading for headline inflation is unacceptably high, it is also outdated. Energy alone accounted for almost half of the monthly rise in inflation. Today’s data does not reflect the full impact of nearly 30 days of lower gasoline prices that have reduced pump prices by about $0.40 since mid-June.
Still, the direction of gasoline is difficult to predict in the future. A recession would reduce it, but Russia could also reduce production, which could drive up prices, so we’re not necessarily out of the woods just yet.
Rental prices have skyrocketed in recent months (take it from someone currently in the market). The rent index, according to the CPI, jumped 0.8% in June from May, the largest monthly increase in rents seen since 1986.
The culprit is rising interest rates, which caused mortgage rates to skyrocket – at one point to around 6%. This pushed a lot of potential buyers out of the market and back into the rental market, driving up demand. According red finthe national median monthly rental asking price topped $2,000 for the first time in May, representing a 15% year-over-year increase.
If you’ve been grocery shopping, you’ve probably noticed that food is ridiculously expensive right now. The CPI showed food at home rose 1% year-on-year in June, more than food away from home, such as dining out, a trend that has continued for six months. Over the past year, the home food index has risen more than 12%, the biggest annual increase since 1979.
Butter, sugar and sweets saw strong increases. There were also increases in cereals and baked goods, flour, dairy products, fruits and vegetables, and soft drinks. The only major grocery groups to see lower prices in June were meats, poultry, fish and eggs, and beef and pork.
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