Staying Fit
iStock / Getty Images
Inflation hit a 40-year high earlier this month, surging 7.5% year over year. Everything from movie tickets to housing is up more than economists had forecasted. But inflation is nothing new: Prices have been rising for the past decade. You think prices are high compared to a year ago? Check out how high they are compared to a decade ago.
AARP Membership— $12 for your first year when you sign up for Automatic Renewal
Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine.
In the decade leading up to the COVID-19 pandemic, inflation ran around 2% per year, says Claudia Sahm, director of Macroeconomic Research at the Jain Family Institute. That slow and steady rise in the price of goods and services was more palatable for consumers but worrisome for the Federal Reserve. Some economists argue that low inflation is a sign the economy isn’t dynamic or isn’t growing enough.
That’s clearly not the case today. Gross domestic product, a measure of the nation’s economic output, rose at a feverish 6.9 percent in the last three months of 2021, compared to the same period in 2020, and the unemployment rate sank to 4 percent in December 2021, down from 6.4 percent the previous year. The recent burst of inflation is grabbing headlines, but the effect of inflation is cumulative, and the increase in prices over the past decade is even more eye-opening. Back in 2012, older adults were paying a lot less for key goods and services.
Medical expenses
The cost of medical goods and services has risen rapidly over the past decade, with consumers paying more for doctor visits, hospital stays, surgeries and supplies. Medical care is an important component of the Consumer Price Index (CPI), an economic data point that measures the price of a basket of goods and services on a monthly and yearly basis. It includes the prices associated with doctor visits, hospital stays, medicine, equipment and insurance. Compared to 2012, medical costs are up nearly 27%, according to the Bureau of Labor Statistics.
To put that in perspective, here’s what some key health care services cost 10 years ago and today.
Gasoline at the pump
Anyone who has filled up their tank recently knows just how much gas has climbed over the past few months. The energy component of January’s CPI rose 27% year over year. Surprisingly, gasoline prices are about the same as they were a decade ago. Prices at the pump could rise as the Ukrainian crisis unfolds. Regardless, retail gasoline prices tend to increase during the spring and summer travel season as gas stations switch to the summer blend of gasoline, which tends to be pricier.
More on money