Inflation is well off its peak of 9.1%, sitting below 4%. So why doesn’t it feel like we are getting price relief? We crunched the numbers and found out how much prices have really spiked over the past three years in this week’s Five For Friday.
#5: Shelter
Shelter is the most basic necessity and the price of a place to live is up 18% since Sept. 2020, according to the Bureau of Labor Statistics. Median asking rent has gone from under $1,700 per month pre-pandemic to more than $2,000 per month, Redfin reported.
Purchasing a home isn’t going to save you any money either since the average price of a new home jumped from roughly $400,000 in 2020 to $513,000 today. And that doesn’t even account for mortgage rates over 7%. There’s a Five For Friday about why this isn’t the year to make a home purchase.
#4: Groceries
Stocking your refrigerator is also making your wallet lighter. Groceries cost 21% more than they did three years ago, but rising prices have slowed over the past year. The price of a dozen eggs spiked from $1.35 to $2.07 over that 3-year period, but it’s a far cry from the $5 spike in January. Meanwhile, milk has gone up $0.52 per gallon to $3.97 and a pound of chicken increased from $1.54 to $1.90. It may seem like a few cents here or there, but for a cart full of groceries it adds up at the register.
#3: Restaurants
If you are thinking of taking a night off and having someone else do the cooking, you’re going to have to pay. The cost of eating at restaurants has gone up 20% over the last three years and unlike groceries, this food inflation is still heating up.
When eateries reopened after COVID-19-induced lockdowns, many employees didn’t return. Some just moved on to better positions. The demand for restaurant workers pushed wages up 20% between 2020 and 2022. There are still so many openings, some establishments have taken the leap and turned to robots.
#2: Cars
It’s no secret that buying a car over the last few years has been crazy. As a whole, new cars are selling for 22% more than they were three years ago. The average cost of a new car is more than $48,000, which is $10,000 more than it was in Sept. 2020, according to Kelley Blue Book. Meanwhile, the price of used vehicles is up 22% with the average sale price at $27,000, according to Consumer Reports. If you aren’t paying cash, you can expect the average interest rate on a used car loan to be more than 11%.
#1: Energy
The energy index is up 49% since Sept. 2020. The majority of the pain is felt by Americans filling up their gas tanks. The price at the pump is up 73% from pandemic lows three years ago. Demand ended up coming back while production took some time to ramp up and left us with higher gas prices. Gas prices eclipsed $5 per gallon in the summer of ’22 at the top of the spectrum. As the saying goes, “The cure for high prices is high prices.” And domestic oil production is expected to hit record levels by year’s end.
