Americans are feeling the strain of surging prices as inflation persists, despite signs of slowing down. The Consumer Price Index (CPI), which measures the price of everyday goods, rose 0.3% in January compared to the previous month. While this is lower than December’s 3.4% inflation reading, it still exceeds the Federal Reserve’s target of 2%.
Although declining energy prices have helped cool down inflation, essential items like housing, food, and auto insurance continue to rise. Consumer inflation is now 19.6% higher than it was in January 2020.
Shelter costs, particularly for renters, remain high. Despite an increase in apartment construction in 2023, rents have still risen by 6% compared to a year ago. However, rising vacancy rates may lead landlords to lower their asking rents. In December, asking rents fell by 0.8% to an average of $1,964 nationwide, marking the third consecutive month of declines. However, regions with less construction activity, such as the Midwest and Northeast, continue to experience rent increases.
The cost of household repairs and utilities has also increased. The price of repairing household items rose by 18.2% in January compared to a year ago, reaching a record high. Water and sewage maintenance increased by 5.2%, and the price of garbage collection rose by 6.4%.
Food prices, a sore point for many households, continue to climb. Food inflation increased by 0.4% from December to January and was up 2.6% compared to a year ago. Grocery costs rose by 0.4% in the past month, the largest increase in a year, and were 1.2% higher than a year ago. Certain foods, such as frozen juices and drinks, beef steaks, sugar, and spices, have seen significant price increases.
The cost of driving has also become more expensive. Auto insurance surged by 20.6% in January compared to a year ago, the largest increase since 1985. Motor vehicle maintenance and servicing increased by 5.7% year over year, while repairs jumped by 7.9%. Parking fees and tolls also saw an increase of 4.8%.
However, there is some relief at the gas pump, as gasoline prices declined by 6.4% in January compared to a year ago. Used vehicles also registered an annual decline of 3.5% and were 3.4% lower than in December.
While prescription drug costs have seen little growth, over-the-counter medications have become more expensive. The cost of nonprescription drugs rose by 9.2% from a year ago, while prescription medications were up by just 0.4%.
Being a sports fan has also become costlier, with tickets to sporting events rising by 13.5% compared to a year ago. The cost of participating in recreational club organizations also increased by 3.1%. Livestreaming services for sports events, cable, satellite, and livestreaming television services have all seen price increases.
Pet owners have also felt the impact of inflation, with rising costs of food, veterinary care, and supplies. Veterinarian services increased by 9.6% in January compared to a year ago, the highest increase on record. Pet food costs have risen by 4.8% in the past year, and the cost of pet supplies and accessories increased by 0.5% since January 2023.
Overall, while inflation has fallen from its peak in June 2022, everyday prices have not reflected significant relief. Food prices are up by over 25%, gas prices are roughly 20% higher, and rents have increased by 22% compared to January 2020.
It’s important to note that a lower inflation rate does not mean prices are falling; it simply means that prices are rising at a slower pace. Americans are still feeling the pinch of higher prices for everyday items.