Inflation took off last year and quickly became the biggest problem for the world’s economy — and households and businesses nationwide.
Inflation may finally be starting to cool as the Federal Reserve hoists interest rates, but lasting progress will depend on how broad swaths of the economy respond, and whether soaring costs can be controlled on everything from butter to books.
Here’s a look at 10 things that significantly rose or fell in price from November 2021 to November 2022 — and what they might tell us about what’s to come in 2023.
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WHAT WENT UP
The tremendous rise in consumer prices was driven by a host of persistent problems, from global supply chain snarls and consumer demand spikes to Russia’s invasion of Ukraine. Over the summer, consumer prices peaked at 9.1 percent compared with the year before, the highest level in 40 years.
School food: Up 254.1%
Elementary and secondary school cafeterias were hit from all sides in 2022 as they grappled with COVID outbreaks, supply chain issues and staffing shortages. But they were also squeezed by the end of pandemic-era federal aid that meant students could eat for free. That has sent the cost of school meals soaring.
Fuel oil: Up 65.7%
In addition to the human toll, Russia’s war in Ukraine has roiled global energy markets, sending fuel oil costs way up. The rising price of gasoline also strapped families and businesses and rippled through transportation and delivery costs for everyday goods.
Eggs: Up 49.1%
Grocery costs rose in general, due to supply chains and transportation issues. But eggs faced additional problems from a severe outbreak of bird flu in the United States, which killed many egg-laying hens. The disease is highly contagious, and farmers must generally kill their birds to limit additional spread. More than 57.8 million birds have been affected since January 2022.
Margarine: Up 47.4%
Margarine is typically a reliably cheap staple, but it too has been swept up in widespread inflation, in part because Russia’s invasion of Ukraine has driven up prices for vegetable oils used to make the butter substitute. The war in Ukraine, a top exporter of sunflower oil, has worsened supply chain backlogs.
Airline fares: Up 36%
Airlines didn’t only feel the consequences of the war and higher fuel costs – they were also up against booming consumer demand as people booked long-awaited vacations or resumed business travel. Many airlines struggled to keep workers, including pilots and flight attendants, after more-senior staff retired early or left their jobs during the pandemic.
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WHAT WENT DOWN
Even with inflation well above normal levels, there are signs of improvement, and in some cases, prices falling. A combination of cooling consumer demand and easing supply chains supply have helped prices turn around after they rose significantly in earlier stages of the pandemic. The hope is that this progress will become more widespread as supply and demand all over the economy come into better balance.
Women’s outerwear: Down 2%
Shopping habits, especially around clothes, changed significantly during the pandemic, as people stayed home or went to the office less often. A shift away from in-store shopping led to less foot traffic in retail stores. As a result, some brands discounted clothes to clear old inventory or lure people back in with fresh deals.
Used cars and trucks: Down 3.3%
Earlier in the pandemic, prices for used cars and trucks took off, making up a huge share of the inflation picture. It was a perfect storm as a global microchip shortage collided with steep demand for vehicles, especially when people weren’t flying as much. But more recently, factories have ramped up chip production, helping supply fall back in line with more tempered demand.
Beefsteaks: Down 7.4%
Prices for uncooked beef have come down, but might not stay that way. That’s because in 2022, a severe drought hit ranchers hard, causing many to sell some livestock early rather than struggle to keep cattle nourished all winter. That boosted supply and even caused a brief glut of beef at the grocery store, but 2023 may not look the same once the full toll of last year’s drought kicks in.
Televisions: Down 17%
As people stayed home and bought stuff, the country imported and manufactured lots of televisions to meet demand. But now those cravings for new TVs have cooled, and retailers are cutting prices to clear their shelves and get rid of excess inventory.
Smartphones: Down 23.4%
This may seem counterintuitive, since the cost of producing iPhones and other smartphones isn’t going down. But falling prices reflect an industry trend that predated the pandemic, in part because of promotions and quality adjustments as devices improve each year. That downward price pressure has persisted despite the global chip shortage.
Inflation looks like it’s improving, after a few consecutive months of declines. The Fed’s goals are that supply chains continue to ease, the labor market slows and consumer demand cools. But the past few years have given no guarantees, and new shocks could upend the economy in unexpected ways.