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Inflation is down, but high prices on certain items are still hurting American wallets.One problem is day-to-day items are more likely to still have higher inflation.Things like used cars and airline tickets are cheaper, but aren’t purchased as often.
After the Federal Reserve announced on December 12 that inflation had cooled to 3.1% in November, President Joe Biden didn’t celebrate. Instead, he noted that “many Americans still find too many things unaffordable.”
While inflation is within shouting distance of the Fed’s 2% goal and consumer confidence rebounded in the last two months, some areas are doing better than others.
The problem is that some sectors that have improved the most may not be as apparent to most Americans.
Some things are cheaper, including durable goods. These items, including cars and appliances, are not regular purchases. On the other hand, categories still struggling against high prices include things people need more often. These include healthcare, groceries, and even $16 McDonald’s burger meals, which are still chipping away at people’s bank accounts.
Using data from the US Department of Labor’s Consumer Price Index, here is a look at the categories still suffering from the highest inflation rates this year. These sectors have prices ranging from 5.0% to over 10% higher in November than a year prior.
Medical care commodities, including medicinal drugs, equipment, and supplies, are doing worse now at 5.0% than at the beginning of the year when its inflation was 3.4%.
Meanwhile, prices for transportation services, including car rentals, repairs, state fees, and parking, have come down this year but are still over 10%, with a jump of 2% in the second half of the year.
Food away from home, which includes restaurants, is another item that consumers purchase regularly, though they can be pretty shocking. Prices are still up 5.4% compared to a year ago.
On the other hand, some things are cheaper than a year ago. Here is a look at five of the categories with the best deflation levels.
The one that will be most obvious to consumers is the price of fuel, which is down 19.3% in twelve months.
On the other hand, inflation for other categories like used cars and trucks, which is down 3.8% this year, and airline tickets, which has declined 12.1%, are less likely to be on the day-to-day radar of most Americans.
While the Fed hiked interest rates to bring inflation back down, some prices are out of its control.
For example, the US cattle supply is at its lowest level in a decade, pushing beef prices higher and contributing to the sticky inflation of restaurant prices.
And it is those food prices that are dragging consumer sentiment down.
In a Morning Consult poll of over 2,200 US adults conducted in November, 90% percent of respondents said they were very or somewhat concerned about grocery and food prices. That was the highest for all factors analyzed.
Despite a strong job market that has kept Americans spending money and reduced inflation that has some experts predicting the country will avoid a recession, many Americans still feel dismal about the economy. In fact, that sentiment has been dubbed a “vibecession.”
With prices on some everyday products still rising, that pain point is likely not going away anytime soon.