Consumer Price Index: 5 Things You Didn’t Know Were Impacted by Inflation
See: More Middle-Income Americans Are Struggling Because of Inflation Than a Year Ago
Inflation Relief Checks: When Will You Get Yours?
Although it is not a perfect barometer of inflation, the Consumer Price Index (CPI) is the most important indicator of the annual inflation rate which is the movement of the CPI from one month/period to the same month/period of the previous year expressed as a percentage over time.
The latest CPI results have been released by the Bureau of Labor Statistics (BLS) and there are no real surprises from what was expected. June indexes are up from May for most goods and services and the overall CPI and inflation rate increased by 9.1% compared to the same period last year, per the BLS. Many experts, including Bloomberg, had pegged June’s CPI at around 8.8% before results were released earlier today.
The 9.1% CPI for All Urban Consumers (CPI-U) is up from 8.6% in May and is the biggest yearly increase since 1981, according to The Associated Press (AP). On a monthly basis, the CPI increased 1.3% in June on a seasonally adjusted basis after rising 1% in May.
With millions of products available to consumers, it would be impossible to index price changes for each and every item for every month or year. The Consumer Price Index measures a select amount of goods and is considered important or common to consumer households.
The CPI for goods and services in the United States is based on data collected from the Consumer Expenditure Surveys, which collects consumer information on the most purchased items. From that, the BLS classifies consumer products and expenditures into eight major groups (food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services), per Investopedia.
Essential goods and services like gasoline (increased by 11.2% in June) and groceries (aka, food at home, up 12.2% from June 2021) will hog the headlines today but we decided to cast a spotlight on five random, lesser-reported products or services that may have a real impact on your spending and budgeting, depending on your needs or lifestyle.
Take Our Poll: Do You Think Student Loan Debt Should Be Forgiven?
Check out the complete Consumer Price Index from the U.S. Bureau of Labor Statistics here.
Things Impacted By Inflation
1. Used Cars and Insurance
Months ago, you would have had to practically mortgage your house to buy a used car, as ongoing supply chain disruptions and the war in Ukraine caused prices to hit the roof. But, as CNBC reported in May, wholesale used vehicle prices have decreased by 6.4% since record highs in January. The used car and truck index rose 1.6% in June, a slight dip from the 1.8% increase in May, while motor vehicle insurance had its sixth consecutive monthly index rise, a 1.9% hike.
2. Dental Services
It is easy to focus on the goods that impact our daily lives and forget about the services we use less frequently when we are looking at CPI and inflation. However, these services are usually expensive, so cost increases are affecting. From May to June, the cost of dental services surged 1.9% which represents the biggest monthly increase since 1995, according to Associated Press.
Oreos were mentioned above for a reason. The food at home index has steadily gained over the past year, but May’s CPI for cookies was an anomaly, increasing 4% in price from April to May. From May to June, the tasty treats have come down to a more respectable increase of 1.3%.
4. TVs and Audio Equipment
As product prices soar, the costs associated to the product, from manufacturing to transportation, all increase as well. For audio/video equipment (A/V), CPI numbers fluctuate among items. More people have cut down discretionary purchases over the pandemic and during this high inflationary period and, perhaps due to global competition, the overall video and audio products index is down -0.2% from May to June and has dropped -5.6% year-over-year. Reflecting these contradictory times, the television index decreased by -2.3% in June (down -12.7% since June 2021), but the audio equipment index increased by 3.2% since May (up 3.3% year-over-year).
5. Window Coverings
Another strange one. Although its Consumer Price Index is up 15.9% over the last year, its monthly indexes in 2022 have seesawed, most recently in a positive direction. With an index rise of 4.7% from March to April, the window coverings index has enjoyed decreases over the past two months, -2.0% and -3.9% in April to May and May to June respectively.
More From GOBankingRates