May 26, 2014 | by Franck Cushner, CFP®
The Bureau of Labor Statistics closely follows the price of thousands of goods, products, and services that consumers buy each month.
In its most recent release, the Bureau noted that prices have increased roughly 1.5% in the past year, March 2013 to March 2014. The gauge that the Bureau uses to identify price increases and decreases is the Consumer Price Index (CPI). Even though the index shows that inflation is still low relative to its 50-year annual average of 4.1%, there are certain products and services where prices have increased considerably.
Over the past year, household utilities and services have increased the most. The cost to heat homes has increased as propane and firewood costs have risen by over 18% in the past year. Gas utilities for homes and businesses have also risen over 16%.
The government does note that food and energy prices are the most volatile within the index. However, many believe that stripping out food and energy is not an accurate assessment of where prices are headed. When it comes to the heightened price of gas utilities, it’s not the actual cost of the (product) gas, but the cost of delivery. New Environmental Protection Agency (EPA) regulations have also added costs to gas distribution over the past year.
Grocery store visits have also become more expensive, as the cost of milk, eggs, meats, and citrus fruits have all increased in the past year.
Many anticipate that college fees and hospital service fees will rise further as growing demand for education and medical services continues, yet with limited availability.
Conversely, the cost of televisions and cameras have dropped over 10% in the past year, as retailers have aggressively marked down prices along with an increase of inexpensive products on the market.
Sources: Bureau of Labor Statistics, EPA, U.S. Energy Dept., Dept. of Education, Dept. of Health
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