Here's how to quantify gas, food and homeownership inflation in last 4 years

We have all been adjusting to the challenge of inflation for the past four years or so. Clearly, it has had an impact on each of our lives, more on some than others. Inflation peaked in June of 2022 at 9.1% on a month over month basis and has abated since then. Actually, it has been on a nice downtrend trend since it peaked, but all of a sudden reared its pesky head in February of this year when the Consumer Price Index moved up by 3.2%, up from January’s 3.1%. That was followed by another move up in March to 3.5%, still considerably above the Federal Reserve Bank’s stated goal of 2%. This upward movement has changed the prevailing thought coming into the year that the Fed would reduce the fed funds rate six or seven times to three or so. Now, some are questioning if the Fed will reduce rates at all this year. No one really knows what is going to happen and we probably won’t know until we get further into the year and inflation readings determine the Fed’s course of action. That said, what follows tries to quantify what inflation has done to prices over time for gasoline, food stuff, and homeownership.

Gas. If you look back at 2020 which was the year of the pandemic, gas prices for regular unleaded averaged $2.26 a gallon. So far this year, they have averaged $3.36 a gallon. That is an increase of $1.10 a gallon or 48.7%. April and May that year also were the last two months that regular unleaded gas was under $2 a gallon.

Food. A Wall Street Journal article earlier this month looked at price increases on commonly purchased items valued at a total of $100 in for the time period April 2019 to March 2020 versus March of 2024. The bottom line is that that same basket of goods cost $36.59 more four years later, a 36.5% increase. Some items increased more than that some less. For instance, a dozen eggs increased $1.48 to $3.84 from $2.36, an increase of 63%. Other outsized increases in price included: a package of chicken breasts +40%, grapes +32.3%, a jar of strawberry jelly +37.7%, a bag of chips +42.9%, a package of lunch meat +36.3%, a package of frozen fruit +43.2%, a piece of pizza +36.6%, a box of cereal +33.9%, a package of toilet paper +37.7%, a gallon bottle of water +40.5%, a bag of sugar +52.9%, a package of flour +43.4%, a box of crackers +40.8%, a bottle of dish soap +46.3% and a bottle of liquid detergent +36.1%. While your grocery list may vary some from this one, these are all basic items. No wonder your Benjamin isn’t going as far as it used to.

Cost of home ownership. According to the National Association of Realtors, home affordability is at its lowest since 1985. That is driven by two factors, the more than doubling of mortgage interest rates in the last two years and the price of housing which has been buoyed by low inventories. That is pretty common knowledge. However, there are the ongoing costs of home ownership, which include maintenance, insurance and property taxes. Maintenance has increased due to inflation and supply chain issues. According to Thumbtack, a home improvement tech company, it cost $6,663 in the fourth quarter of 2023 to maintain a home, up 8.3%. The index takes into account regular gutter cleaning and lawn care along with occasional expenses like roof repair or maintenance. Insurance has increased dramatically due to catastrophes like tornadoes, wildfires, earthquakes and hurricanes. In addition, inflation has affected the material costs to repair and replace damage. The average annual homeowner’s insurance cost rose about 20% between 2021 and 2023 to $2,377, according to insurance shopping site Insurify, which projects an additional increase in 2024 of 6%. Finally, property taxes are on the increase due to the impact of inflation on local governments and school systems. The average property tax for US single family homes was $4,062 in 2023, up 4.1% from 2022, according to real estate data firm Attom.

The foregoing are all basic costs for most of us. The cost of gasoline, food and housing have all experienced significant increases in costs due to inflation. What is at work here is the power of compounding interest rates. Just like compounding interest rates work for us on investments, they work against us in prices. Today’s lower inflation readings are on top of the larger ones in recent years. Inflation is an insidious phenomenon that has reduced the standard of living for most of us.

This article originally appeared on Springfield News-Leader: Quantifying gas, food and homeownership inflation since 2020