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What’s Cheaper and What Isn’t as Inflation Ebbs

TV prices are down, new car prices are up, and egg lovers still can’t catch a break

spinner image Man shopping in the reduced price section of a supermarket.
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The consumer price index (CPI), the government’s main gauge of inflation, rose 4.9 percent over the 12 months ended in April, according to the U.S. Bureau of Labor Statistics (BLS). It was the slowest annual rise in two years.

The year-over-year inflation rate has been falling since its near-term peak of 9.1 percent in June 2022, giving some economists hope that the trend will persuade the Federal Reserve to pause its campaign of raising interest rates to combat rising prices. The Fed has increased rates 10 times since March 2022, to a current range of 5 percent to 5.25 percent, in hopes of slowing the economy and inflation.

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“The below 5 percent headline CPI number is a sigh of relief to a market on edge,” says Alexandra Wilson-Elizondo, co-head of portfolio management for Multi-Asset Solutions at Goldman Sachs Asset Management. “The Fed has an excuse now not to hike.”

Nevertheless, inflation continues to stalk the economic landscape. The three broad categories that rose the most over the past 12 months were transportation services, electricity and food at home.

Transportation services were up 11 percent, thanks in part to a 20.2 percent jump in the cost of motor vehicle repair and a 15.5 percent increase in auto insurance premiums.

Electricity prices rose 8.4 percent. This should ease as the price of natural gas, used by many companies to generate electricity, falls further. Natural gas prices fell 4.9 percent the past 12 months.

Food-at-home costs rose 7.7 percent, driven mainly by steep increases in flour, up 17.8 percent, and eggs, up 21.4 percent. Meats, poultry and fish, however, rose a modest 2.8 percent, while the price of bacon fell 8.9 percent.

Some good news: Gasoline prices fell 12.2 percent the past 12 months. According to AAA, the average cost of a gallon of regular gas was $3.53, down from $4.37 a year earlier. In Mississippi, the price of gas fell below $3, to $2.99 a gallon. Hawaii has the most expensive gas, at $4.78 a gallon.

Other CPI highlights

  • Used car and truck prices fell 6.6 percent over the past 12 months; new car prices rose 5.3 percent.
  • Televisions cost 11.9 percent less than they did last year; computers cost 5.1 percent less.
  • Medical care rose a modest 0.4 percent from a year ago. The big exceptions: dental care, up 7.1 percent; and medical equipment and supplies, up 9.9 percent.

How the CPI is calculated

The CPI measures a market basket of consumer goods reflecting what an average consumer would purchase. BLS data collectors visit (in person or on the web) or call thousands of retail stores, service establishments, rental units and doctors’ offices all over the United States to obtain information on the prices of the thousands of items used to track and measure price changes in the CPI .

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Your personal rate of inflation will vary according to what you buy and where you live. Nevertheless, the CPI is an important measure that’s used in a variety of financial calculations, from the interest rate on inflation-adjusted I bonds to increases in pay for government contractors and workers.

Online prices fall

One heartening measure of inflation comes from the internet: Online prices overall fell 1.8 percent for the 12 months ended in April, the eighth consecutive year-over-year monthly decline, according to software giant Adobe. Prices fell in 11 of its 18 product categories. The biggest online price drops the over past 12 months:

  • Flowers and related gifts, down 27 percent
  • Computers, down 15.4 percent
  • Electronics, down 11.6 percent

The Adobe report wasn’t all sunshine and lollipops. Some online purchases remained stubbornly high. Groceries, for example, saw a 9.3 percent increase over the past 12 months, and pet products jumped 11.3 percent.

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