Prices of consumer goods spike: Is inflation a concern?
If it feels like a lot of products and services have gotten more expensive in the past year, it's because, well, they have.
Consumer prices jumped 4.2% from March 2020 through April 2021 - the largest 12-month increase since 2008, the Bureau of Labor Statistics (BLS) announced Wednesday morning. And just last month, prices spiked by 0.8% compared to the month prior.
The significant increases have some officials and experts concerned worried about the impact of this rapid inflation, and The Wall Street Journal calls out two key factors: Rising demand from consumers as the economic recovery continues as COVID lifts, plus a supply bottleneck (such as the global chip shortage).
The price increases, however, might not be as drastic as they seem. As CNBC explains, inflation was "unusually low" one year ago as the pandemic first began to tighten its grip on the country. Comparing current prices to those abnormally low ones can lead to "distorted" numbers for a few months because of base effects.
The Federal Reserve has also made clear it believes this spurt of inflation is only temporary.
Still, that doesn't necessarily mean much for consumers' bank accounts. So which goods and services have seen the biggest prices rises in the past year?
The cost of food is up 2.5% overall, with big increases for bacon and related products (+10.7%), citrus fruits (+7.8%), lettuce (+5.1%), uncooked beef steaks (+6.1%), dairy milk (+2.2%) and fresh cakes and cupcakes (+3.8%).
But energy-related products and used vehicles have seen particularly stunning rises. The price of used cars and trucks went up 21%, gasoline has seen a 49.6% price increase, and even electricity (+3.6%) and gas utilities (+12.1%) are up.
The rising price of used vehicles comes after automobile makers cut production and rental car companies slashed fleet purchases at the onset of the pandemic, per MarketWatch, reducing the overall supply of second-hand vehicles.
There has also been an increase in demand for vehicles due to a reduction in public transit use during the pandemic, with some putting their stimulus payments towards car purchases.
Other common commodities have also seen an increase, such as:
- Laundry equipment: +23.6%
- Home furniture and bedding: +7.8%
- Footwear: +3.9%
- Men's pants and shorts: +10.4% (despite men's apparel overall only going up 1%, and women's apparel overall actually going down 0.5%)
- Sewing machines, fabric and supplies: +8.9%
- Magazines and newspapers: +7.4%
- Cable and satellite TV: +4.1%
- Pet services, including veterinary: +4.8%
- Lodging away from home: +7.4%
- Food from vending machines and mobile vendors: +2.6%
It hasn't been all bad pricing news. Some products have gone down in price during the 12-month period measured, such as:
- Bread: -1.2% (with white bread specifically down 2.3%)
- Roasted coffee: -0.2%
- Baby food: -1.7%
- Soups: -1.1%
- Personal care products: -0.3%
- Video discs and other media, including rentals: -6.1%
- Musical instruments and accessories: -0.8%
- Nonprescription drugs: -0.6%
- Butter: -0.6%
- Potatoes: -2%
