September 23, 2022
  • September 23, 2022

Inflation: Rising prices for groceries, rent and health insurance

By on September 13, 2022 0

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Inflation is still very high and basic necessities like groceries, paper products and utilities are seeing their biggest annual price increases in decades. Rents and health insurance costs are also rising.

New data released Tuesday by the Bureau of Labor Statistics (BLS) shows that consumer prices rose 8.3% year over year in August. That’s a slight improvement from July’s 8.5% annual inflation rate, but it’s still extremely high by historical standards. Many experts expected price growth to slow in August, but instead prices rose 0.1% from July.

High inflation persists despite attempts by the Federal Reserve to rein it in by raising interest rates, and the stock market plunged Tuesday morning on renewed fears of an impending recession. The S&P 500, an index often used as a gauge of the stock market as a whole, was down 3% early in the day.

Inflation pushes prices higher and higher

While Tuesday’s headline figure of 8.3% is already strong, some consumer staples have seen even more dramatic spikes.

Grocery prices rose 13.5% on an annual basis in August, according to the BLS – the largest annual jump since 1979. The grocery category includes the rapid rise in prices of essentials like flour, which rose 23% on an annual basis, the biggest jump ever in this category. Dairy prices soared 16.2%, the biggest annual increase since 1974.

Prices for household paper products like paper towels and toilet paper rose 14.1% year-on-year, also the largest increase on record. Electricity prices rose nearly 16%, the largest annual increase since 1981.

Meanwhile, health insurance prices rose 24.3% – the largest annual increase ever in this category. Rent prices rose 6.7%, the biggest increase since 1986.

Fortunately, Tuesday’s report also brought good news. While used car prices are still up nearly 8% on an annual basis, they actually fell 0.1% between July and August. Gas prices fell more than 10% on a monthly basis after soaring earlier this year.

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