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Originally Posted On: https://www.empower.com/the-currency/life/inflation-averages-news
Inflation and the law of averages
The inflation you read about is an average of thousands of price changes of goods and services across the country.1 But you don’t buy averages. You buy real things – bananas, gasoline, an internet connection. Some prices are rising faster than the average, some are rising slower – or even falling.2
Despite the pinch of inflation – the average was 3.0% as of June 20243 – the prices of many goods and services rose by less. The trick is to find them.
Some things are getting cheaper
There are some bargains out there. According to the Bureau of Labor statistics, as June 2024:
- Cars are getting cheaper, at least compared with the price a year ago (down 1.6%). But for a real bargain, shop used: down by over 10%. (Though you’ve probably already noticed the 20% jump in the price of auto insurance.)
- For temporary transportation, look to a rental: Prices of car and truck rentals dropped by over 6%.
- Internet service rose a bit faster than inflation (4.3%). But the hardware you use to access the internet – smartphones and computers – fell significantly (by 10% and 4%, respectively).
- Maybe it’s time for that smart TV – down 5.6%.
- Grocery prices to watch: Roast beef is on the rise (up 10%), while seafood (down 1%) and ham (down 43%) have gotten cheaper. Fresh and frozen vegetables have also decreased (down by 0.3% to 1.3%).
- It’s getting less expensive to fly. Airline fares were down by over 5% year-over-year in June. Add in a strong dollar,4 it’s no surprise that Americans are traveling abroad this summer.
Biggest 12-month price jumps and drops, June 2024
| Price Hikes | Price Drops | |||
| Frozen non-carbonated juices and drinks | 20.2% | Apples | -12.0% | |
| Motor vehicle insurance | 19.5% | Phone hardware, calculators, other consumer IT | -12.0% | |
| Video discs (DVDs) and other media | 18.3% | Other video equipment | -10.4% | |
| Admission to sporting events | 15.1% | Smartphones | -10.3% | |
| Home care for elderly | 11.4% | Dishes and flatware | -10.2% | |
| Uncooked other beef and veal | 10.5% | Used cars and trucks | -10.1% | |
| Eggs | 10.2% | Men’s suits, sport coats, and outerwear | -9.4% | |
| Photographic equipment and supplies | 10.1% | Other furniture | -8.8% | |
| Uncooked beef roasts | 10.0% | Information technology commodities | -8.5% | |
| Indoor plants and flowers | 9.4% | Nonelectric cookware and tableware | -8.4% |
*Source: Table 7. US Bureau of Labor Statistics Consumer Price Index for All Urban Consumers (CPI-U), June 2024
Cost of living factors in, too
The cost of living and day-to-day spending varies across regions:
- The Midwest has had lower inflation.5 Since housing composes over a third of the Consumer Price Index (the largest single component), a more affordable housing market weighs heavier against lowering prices.6 But in fact, they aren’t rising just as fast – according to the Bureau of Labor Statistics, the CPI for the Midwest has been consistently lower than the national average over the past year.7
- The South also often enjoys a lower cost of living, especially in terms of housing and utilities.8
- Housing costs contribute to higher prices in the Northeast9 and West,10 particularly in New York City, Boston and Los Angeles.
In terms of specific goods and services, where you live may affect some prices and not others. For instance, because of proximity to refineries, gasoline is just over $3 per gallon along the U.S. Gulf coast; in California, it’s closer to $5.11
For other goods and services, location may not be a factor. Online retailers may collect a different local sales tax, but in many instances the price you see in California is the same as the price in Alabama.12 Even in retail stores, prices of nationally branded products, prescription drugs and consumer electronics are within pennies of each other (and have been increasing at the same rate) everywhere.13
Pressure-testing prices
Economic data is one good way to keep a pulse on the pricing pressures of the day. Don’t discount your own eyes and ears: They are also good tools.
