Inflation, but make it slower
The latest Consumer Price Index (CPI), a weighted basket of various goods and services, was unchanged month-over-month in May and rose 3.3% on a yearly basis, down from the 3.6% reported in April and the softest reading since July 2022.
Let's reiterate: just because the headline reads "Price rises are slowing" doesn't mean prices are falling, rather, they are just increasing at a slower pace. With the average grocery or electricity bill still higher than a year ago, it’s very hard for Americans to enjoy the fruits of what the data suggests is actually a pretty strong economy. It seems, beyond a certain point, that inflation is kind of the only thing that matters.
So, where is inflation still hitting hardest?
Because of the wide array of products and services in the CPI basket, no single item has risen by exactly 3.3% over the past year…. So we decided it was again time to ask one of our favorite questions when the report comes out: exactly where are prices rising?
Bad news: Americans have seen what’s likely their biggest monthly expense, shelter, rise 5.4% from last May — a particularly sore point in an area where even a decimal point change can weigh heavily on one's finances. Sports fans and road users will be feeling the pinch too, as attending sporting events and insuring your vehicle are both up ~20-22%.
Slightly less bad news: Prices at the gas pump have dropped from April, but are still up 2.2% year-over-year. Food at home has remained relatively flat in recent months (up 1% over the year). However, for the growing share who are eating out more often, the 4% increase of restaurant bills or fast-food orders means dining out will be taking a bigger bite out of their finances.
Good news: Flying across the country (-5.9%) and renting a car upon arrival (-8.8%) have both continued to drop in price, which is great for anyone with big summer trip plans. Entertaining your children and teens, whether with a toy (-7.8%) or a new TV (-6.6%), is also cheaper than it was last year.
