Your cost of living may be rising faster than the Consumer Price Index

Inflation as measured by the Consumer Price Index rose 4.1 percent from December 2006 through December 2007 (the latest figures available). But a closer look at the individual spending categories that comprise that headline-making index reveals that in some everyday spending categories, consumers definitely are being hit much harder than the overall rise in the CPI would suggest.

Not surprisingly, energy-related costs rose most steeply over the past year. Gasoline was up 29.6 percent; heating oil rose 28.3 percent; and the rate of increase for public transportation was 7.2 percent, or close to double the CPI rate.

And if it seems like you’re paying more and more for food, you’re right. Grocery prices are up 5.6 percent overall, led by 13.4 percent increase in dairy products, with the price per gallon for milk sometimes vying with the tab for a gallon of gas. Prices rose nearly 6 percent for fruits and vegetables, with increases in the range of 5 percent for cereal, meat, poultry, fish, and eggs. Both gasoline and groceries are the categories that are omitted from the “core inflation rate” that is often the focus of the Federal Reserve when it sets interest rate policy, even though they are a vital component of consumers' weekly budgets.

Drowning your sorrows about rising prices would have been a bargain by comparison—the 3.8 percent rise in alcohol prices actually was less than the total CPI increase. There were a few categories, such as apparel and furniture, for which prices dropped slightly, and there was also one product area that delivered tremendous bang for your buck: Personal computer prices actually declined by 13.2 percent over the past year.  —Andrea Rock

Comments

[michael r steinberg]

i always knew the govt figures were phony!

[David Kimble]

What I find ironic is the government figures for inflation are more laughable than fact.

[caryn verell]

i keep asking but not getting any answers - what happens when the cost of produce is so high that no one buys and the produce rots...? produce in the grocery stores is very expensive these days and it looks really bad...who wants to buy something when they have to throw half of it away?

[Kory]

John Williams puts out the recalculated figures which show current inflation around 12% and it will get up around 15% this year. We have not seen the beginning of this yet...