Pew Research Uncovers: Where Inflation Has Hit Americans Hardest
If you've felt the pinch at the grocery store or the gas pump lately, you're not alone. A recent Pew Research Center article dives deep into the inflation trends that have been reshaping the American economy since 2020. Let's break down what they found and what it means for you.
The Big Picture
Remember when we thought 2020 couldn't get any crazier? Well, as the economy started recovering from pandemic shutdowns, we saw inflation surge to levels not seen in over 40 years. By June 2022, the Consumer Price Index (CPI-U) hit a jaw-dropping 9.1% year-over-year increase.
The good news? Inflation has cooled significantly since then. As of June 2024, it's down to 3%, much closer to the Federal Reserve's 2% target. But don't break out the champagne just yet – prices aren't actually going down, they're just rising more slowly.
The Winners and Losers
Not all items are created equal when it comes to inflation. Here are some of the biggest movers:
Margarine takes the cake (or should we say, spreads it?) with a 56.8% price increase since January 2020.
Car-related expenses are hitting wallets hard: motor vehicle repair (up 47.5%) and insurance (up 47.3%) have seen significant jumps.
Pet owners, brace yourselves: vet services are up 35.6%.
On the flip side, some items have actually gotten cheaper:
Men's suits and outerwear are down 6.3% (silver lining for office returners?).
Dishes and flatware dropped 9.9% (time to upgrade that dinnerware?).
Tech items like smartphones have seen significant price drops when accounting for quality improvements.
The Heavyweight Champions
When calculating inflation, not all items carry equal weight. The biggest factor? Something called "owner's equivalent rent" (OER), which makes up about 25% of the CPI-U. It's basically an estimate of how much it would cost to rent out your owned home. OER is up 23.8% since January 2020, just slightly below actual rental inflation at 24%.
The Wildcard: Gasoline
No discussion of inflation would be complete without mentioning gas prices. They're the third-biggest contributor to the CPI-U and boy, have they been on a wild ride. Overall, gas prices are 35.9% higher than in January 2020, but that doesn't tell the whole story. They nearly doubled by June 2022 before falling back down. The silver lining? As of July 2024, average gas prices were about the same as they were in August 2014.
The Egg-streme Case
If you thought gas prices were volatile, meet the humble egg. Egg prices saw the sharpest spike of any item, peaking in January 2023 at a mind-boggling 94% above January 2020 levels. While they've come down since then, eggs are still about 40.1% more expensive than pre-pandemic times.
Click on this link to read the Pew Research article: https://www.pewresearch.org/short-reads/2024/08/07/eggs-gasoline-and-car-insurance-where-inflation-has-hit-americans-hardest/