Child Care, Rent, Insurance: Where Inflation Hits Hardest Now

Big, fixed costs that are tough to avoid are crushing household budgets.

By Harriet Torry and Terell Wright of The WSJ. 

I have done several posts on how people have been dealing with the inflation of the last few years as well as how they have been affected. Those are listed after some excerpts from the article.

"Rent and electricity bills are up 10% or more over the past two years, and car-insurance costs are up nearly 40%"

"Housing is by far the biggest monthly expense for U.S. households. In the CPI, shelter costs—a measure of rent and the equivalent cost to homeowners, as well as lodging away from home and household insurance—have risen more than 13% in two years. 

When a family’s $3,000 rent or mortgage payment jumps 13%, that dings the bank account by about $400 a month.

Some prices are rising owing to factors other than traditional supply and demand. Home insurance costs for owners in some parts of the U.S. have ballooned partly because of storms and fires. Utility bills have climbed as companies try to shore up an aging power grid."

"Families with young children are also paying higher prices for child care. Costs have risen 6.4% over the past two years, in line with the overall CPI. Because daycare bills can be as big as the rent payment or the mortgage, even a relatively small increase can feel like a lot. 

The median price to put an infant in center-based care in 2022 was more than $1,400 a month in major metro areas, according to the Labor Department. A 6.4% increase puts that bill closer to $1,500."

"According to the Labor Department, essential services such as water, sewer and trash collection have jumped nearly 11% in price over the past two years, and electricity has climbed 10%.

The cost of transportation services, which includes vehicle insurance and repair, has jumped more than 18% in the past two years, according to the CPI. That would slap an extra $55 a month on a $300 budget. An increasing number of cash-strapped Americans are choosing to drive without car insurance."

Related posts:

Why do workers dislike inflation? (2024)

Inflation Usually Hits Harder for Poor Families. For a Couple of Years, It Didn’t. New research on how inflation varies between the poor, middle class and rich paints a different picture of poverty and inequality (2024)

The Haves and Have-Nots at the Center of America’s Inflation Fight: There’s a growing gap between Americans who are battered by high inflation and interest rates and those who are actually benefiting (2024)

An Increase in Uninsured Drivers Is Pushing Up Costs for Everyone Else (2024) 

Inflation has caused consumers to choose what they need to cut back on (insurance)

Costco and Sam’s Club Aisles Are Full of Gen Z Shoppers (2024)

Consumers are buying in bulk to save money by getting a lower per unit price

Inflation is mentally taxing (2024)

Inflation is mentally taxing. Dealing with a straitened budget exacts a psychological toll as well as a financial one

Store Brands Are Filling Up More of Your Shopping Cart (2024) 

People are on the look out for cheaper alternatives due to inflation

Consumers Fed Up With Food Costs Are Ditching Big Brands (2024) 

After years of price increases, food companies say more consumers pull back; fast-food chains and snack makers plan new deals and flavors

Are Americans Worrying Too Much About Inflation? Two opposing views (2024)

The Era of One-Stop Grocery Shopping Is Over (2024)

One thing that I always talked about with inflation was that one of its costs was all the things we had to do to avoid it. Consumers are making 8% more trips to different retailers as inflation continues to upend household budgets. They are going to more stores to find lower prices. But it costs time to do that and probably more money on gas.

When workers were paid twice a day and given half-hour shopping breaks (Germany, 1923) 

By mid-1923 workers were being paid as often as three times a day. Their wives would meet them, take the money and rush to the shops to exchange it for goods. However, by this time, more and more often, shops were empty. Storekeepers could not obtain goods or could not do business fast enough to protect their cash receipts. Farmers refused to bring produce into the city in return for worthless paper. The requirements to calculate and recalculate commercial transactions in the billions and trillions made it practically impossible to do business in paper Marks.