How Will Rising Prices Affect You?
Year-to-year inflation fell to 8.3% from 8.5%, the first decline since last summer. However, the 8.5% figure from March was the highest its been since 1981, not a time known for good economic numbers. Given that upward pressure continues on prices across a wide range of areas, Americans are not going to see much relief over the summer. In this article, I break it down for you.
Estimates vs. the Reality
The CPI, or consumer price index, at 8.3%, is still very close to the highest level we’ve seen in over 40 years. What is roiling the markets is that this number is higher than analysts estimated. The market was expecting the CPI to be up an estimated 8.1%. So despite the real April number being slightly less than that for March, investors panicked.
Digging deeper into the numbers, month to month CPI was up 0.3% instead of an estimated 0.2% and core CPI, which does not include either food or energy, was up 0.6% instead of 0.4%.
Cost of Housing Rises
Speaking of core CPI, housing makes up about 40% of this index. Its cost went up at a faster rate than at any time since April of 1991. This includes not just the cost of single family houses, but also for those who are renting either houses or apartments.
Rising Transportation Costs
Whether you want to take a road trip this summer or fly to a marvelous destination, expect to pay more. Airfares are up 33% over the last year and have gone up 18.6% just in the last month.
Gas prices are actually down 6.1% since March, but are still considered high by most consumers. Not adjusted for inflation, they are still hovering at their highest level ever.
Meanwhile, if you need a new car, you’ll be paying 13.2% more for a new one or 22.7% more for a used vehicle than you would have this time last year.