If you’ve noticed your budget isn’t stretching as far these days or that the prices of products you buy regularly are higher, you’re definitely not alone.
Data from the U.S. Bureau of Labor Statistics shows that prices are rising at the fastest pace in 40 years. The all-items index, which measures the average cost of all goods and services for urban consumers, rose 7.5% for the 12 months ending in January. That was the largest 12-month increase since February 1982, while the “all items less food and energy” index rose 6%, which was the largest 12-month change since the period ending in August 1982.
The energy index rose 27% percent over the last year, while the food index increased 7%. The shelter index rose 4.4% over the year, with rents increasing 0.5% last month amid the lowest rental vacancy rate since 1984, Reuters reports.
The cost of buying a new or used car or truck, which has been increasing since spring of 2021, CNBC reports, has also been a significant contributor to inflation over the past year. Though the cost of a new car remained flat in January, used cars surged 1.5% during the month, and the 12-month increase in both categories was stark: New cars and trucks increased 12.2%, and the used cars and trucks index saw a whopping 40.5% increase.
Though the energy index rose 0.9% in January, the increase was offset by declining gasoline and natural gas prices.
Meanwhile, monthly wage gains for workers were virtually eliminated by rising inflation, CNBC reported.
Rising Grocery Bills
Food prices increased 0.9% in January alone. That figure includes both food eaten at home and food eaten away from home (at restaurants, for example), but it was food at home that increased at a steeper rate over the past year.
The bureau’s report also shows that five of the six major grocery store food group indexes increased in January, with cereals and bakery products increasing the most, rising 1.8% over the month. But nearly every category of grocery foods also rose over the month, with the only exception being nonalcoholic beverages.
When looking at the entire year, food at home prices rose 7.4%, with the highest increase seen in meats, poultry, fish and eggs, which rose 12.2%. The index for food away from home rose 6.4% over the last year, also the largest 12-month increase in 40 years, according to the bureau.
To help combat the rising inflation, the president of the St. Louis Federal Reserve Bank told Bloomberg News that he supports raising interest rates by a full percentage point by July 1. This means the Fed would have to raise interest rates by a half a percentage point in a single meeting, which they haven’t done since 2000.
You can read the full Bureau of Labor Statistics report to see all of the price increases in the last year and month by visiting its website.