The consumer price index rose 8.5% in March, compared to the same month last year. It was the largest jump in nearly four decades. Almost every category of consumer spending was affected. This has caused widespread worry that the cost of living in America may move so high so fast that it will cause a recession as early as this year. Prices on a few goods and services, though, have actually fallen over the past year – and the category whose price has plunged the most is food at elementary and secondary schools.
The only major weapon the U.S. government has to head off rising prices soon is the Federal Reserve. It has already said it will raise interest rates four times this year. Each increase is expected to be a quarter of a point. Some of the members of the Fed say this will not be enough and that, to correct the inflationary environment, increases will need to be half a percent. This is quite a contrast to the past several years, when the Fed did not raise rates at all.
As much as half of the CPI jump in March was attributed to oil prices. They have surged largely due to export sanctions against Russia, one of the world’s largest oil exporters. Should that country’s invasion of Ukraine continue, the Russian oil situation will persist.
To determine the household items that are plunging in price, 24/7 Wall St. reviewed data on the consumer price index for all urban consumers from the Bureau of Labor Statistics. Expenditure categories were ranked based on the percentage change in CPI from March 2021 to March 2022. (Data used to calculate percentage change are not seasonally adjusted.)
Items in the CPI with falling prices are few and far between. Most can be attributed to specific causes. For example, the price of smartphones fell over 13% in March. Competition for customers among the three largest wireless companies (AT&T, Verizon, and T-Mobile) almost certainly has caused this.
The cost of food at employee sites and schools fell more than any other CPI component – 30.5% in the former case, an astonishing 43.5% in the latter. This may be a reflection of the fact that many schools and businesses have not fully reopened after being shuttered because of the COVID-19 pandemic.
Click here to see how the price of this household item is plunging
One thing is certain. The few items for which prices fell last month cannot come close to offsetting the price surge of dozens of other items that are parts of the CPI.
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