Over the past 18 months, Americans have faced ongoing waves of steep price hikes as inflation hit 40-year highs. It started with used and then new cars, later whole chickens and ground beef. Now it’s gas at the pump or an affordable two-bedroom apartment in Nashville. The forces fueling inflation keep changing.
At the start, inflation could be dodged by holding onto that old car or avoiding air travel. Now, record prices are concentrated on essentials such as groceries, housing and energy, raising the cost of just getting by for many.
Here is a breakdown of what has fueled inflation each month since the start of last year.
Recent inflation has been a bit different than the last big wave of price increases 40 years ago. Its causes keep shifting.
Of course, some price growth problems have been there all along, like a constant background hum, such as higher prices for slower shipping because of fractured supply chains or the difficulty of meeting pent-up consumer demand.
But other inflationary problems have more to do with the complicated trends of the coronavirus pandemic, leading to price hikes that ebb and flow. Money that might have paid for in-person services like gym memberships went instead to at-home fitness equipment. When coronavirus cases fell, people flocked to travel. When they rose, eating out was swapped for groceries.
Businesses didn’t always have enough stock on hand to meet the demand and couldn’t make or ship goods fast enough to catch up. So some prices skyrocketed, often for items that weren’t a major part of a family budget.
But that changed this year, when inflation began to spread into nearly every facet of the economy. By the time Russia invaded Ukraine in February, causing staggering price increases at the gas pump, many people were already facing big price hikes in essentials such as food and shelter.
The Federal Reserve has begun to take steps to combat inflation. It can’t create more goods or untangle supply chain snarls, but it can increase interest rates, which it has done three times so far this year. Higher interest rates slow demand and the economy by raising the cost of lending.
Coming off another record rate of inflation for June, the Fed is expected to announce higher rates Wednesday in a bid to head off any bigger price waves.
The seasonally adjusted effect on all items measure from Table 6 of the Bureau of Labor Statistic’s monthly consumer price index report was used to calculate how much different items contributed to overall price growth each month. Travel and dining out includes food away from home, car and truck rental, airline fares and lodging away from home. Housing refers to all types of shelter except lodging away from home; groceries refers to all food at home. Other goods and other services refer to all commodities and services not otherwise specified.