Hotel rooms, hot dogs, and rental cars – among many other commodities – soared in early summer.
Now, the prices of many of those same items are coming back down to Earth, according to August Federal Consumer Price Index data.
Prices only rose 0.3% between July and August – the smallest price increases have been since January. This may be an early indicator that inflation is under control, some economists say.
“It’s encouraging to see that prices are starting to stabilize,” said Matthew Roling, assistant professor of finance at Wayne State University. “It’s a good sign.”
The federal government tracks monthly price changes for more than 300 consumer products ranging from gasoline and laundry equipment to cigarettes and concert tickets.
Here are the 17 items that were at least 2% cheaper between July and August.
- Food at employee sites and schools: -17.0%
- Air fares: -9.1%
- Car and truck rental: -8.5%
- Frankfurt: -8.3%
- Crockery and cutlery: -4.6%
- Other out-of-home accommodation including hotels and motels: -3.3%
- Women’s dresses: -3.1%
- Other pigs including roasts, steaks and ribs: -3.0%
- Peanut butter: -2.8%
- Auto insurance: -2.8%
- Flooring: -2.7%
- Boy’s clothing: -2.6%
- Laundry equipment: -2.6%
- Sewing machines, fabrics and supplies: -2.3%
- Long-life fish and seafood: -2.3%
- Prepared salads: -2.1%
- Fuel oil: -2.1%
Many of them saw their prices rise significantly earlier this spring and summer, which is why Roling says they don’t expect a continued downward trend in prices for many – they are just returning to normal prices.
Supply chain issues and a resurgence in demand led to price hikes for many products earlier in 2021.
Used cars and trucks are also down 1.5% in August after rising more than 10% in June. They are still up 31.9% compared to last August.
Many products are still increasingly expensive, including 26 items that jumped 2% or more in August and eight that rose 3% or more. Here are the eight items that are increasing in price the most.
- Window treatments: 17.2%
- Suits, sports jackets, outerwear for men: 7.9%
- Men’s shirts and sweaters: 4.3%
- Dressing: 4.0%
- Engine oil, coolant and fluids: 3.8%
- Living room, kitchen and dining room furniture: 3.8%
- Bacon and related products: 3.3%
- Other condiments: 3.0%
Regular unleaded gasoline also rose 2.8%, while all energy prices rose 2% in August. Food prices rose 0.4% and everything else rose 0.1% on average.
Compared with August 2020, regular unleaded gasoline is up 43.9%. Only car and truck rentals have increased more over the past 12 months (up 52.6%).
In the past 12 months, the prices of all items have increased 5.3%. But that doesn’t take into account the drop in prices caused by the pandemic in early 2020.
In a normal year, the federal government targets an annual inflation rate of 2%.
Inflation under control is good news for the economy, but experts are concerned about one of the potential causes – the increase in COVID-19 cases thanks to the delta variant.
“(Delta) has certainly calmed demand a bit,” Roling said.
This could explain why some hospitality prices are dropping, he said, if people feel less comfortable in public and when traveling. Ultimately, crushing COVID is the best way to get the economy back to normal, Roling said.
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