U.S. consumers are just starting to feel the impact of higher prices that are creeping into everyday life — touching on areas as diverse as apartment rents, meals and even coffee.
As reported by the Associated Press on Monday (Aug. 3), inflation is gaining traction after several years of flat, or even falling, prices — though the actual price hikes seen to date remain modest. As evidenced by the consumer price index, the rise has been a tepid one over the past 12 months. Core inflation, which ignores the gyrations of food and gas prices, has been up more than 2 percent in the past three months alone (measured annually).
But, noted AP, the pricing gains offer some insight into positive mindsets across businesses large and small, with confidence growing that higher costs can be passed along to “sticky” consumers.
The biggest contributor to inflation has been residential rents, where in each of the past several months rents have grown by more than 3 percent over the year-ago period. Apartment vacancies are at the lowest level in a quarter of a century.
AP reported that the price of restaurant meals has also been on a tear, up 3 percent in June year over year. That’s tied in part to higher food costs. Beef prices have grown by double digits in the past year, or roughly 11 percent. As a result, outlets including Chipotle have boosted entrée prices. Coffee prices, up 6 percent, have led Starbucks to charge anywhere from between a nickel to 20 cents more per cup of coffee.
And it’s even gotten more expensive to trim your locks, as haircut prices grew by 1.6 percent in June, the highest jump measured on a monthly basis in 62 years, since the government began tracking that data — leading to a 2.8 percent rise in the last year.
As AP reported, economists think the price increases will continue, due in part to the fact that they are tied to “sticky” services, with relatively stable profiles. The Federal Reserve Bank of Atlanta, which tracks an index of such “sticky prices,” has seen that index rise by 3 percent annually over the past three months, and that represents the biggest jump since the end of the recession.