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Americans plagued by rising prices the past three years got another promising sign on Wednesday that inflation is sustainably easing.
The Consumer Price Index (CPI), a broad measure of the price of everyday goods, including groceries, gasoline, and rent, rose 0.2% in July over the previous month, in line with economists’ expectations. Prices rose 2.9% compared to a year ago — the lowest annual reading since spring 2021.
Here’s what the Bureau of Labor Statistics’ latest inflation numbers mean for your household:
Price increases slow on cell phones, TVs, used cars, and more
The sting of surging prices should feel like less of a bite on several common purchases. Of note:
The price of used cars, notoriously steep during the pandemic, slowed 2.3% in July, following a 1.5% decrease in June. The index for used cars is down nearly 11% year over year. Car and truck rentals were down more than 6% compared to 2023.
Cell phones were down more than 8% year over year. TVs: almost 6%. Smart home devices declined 2.4%, and the index for airfares fell 2.6% as summer travel wraps up.
Auto insurance keeps surging while gas prices ease up
Car insurance costs haven’t been this bad in 47 years.
The price of auto insurance was up 18.6% since last July, a pain felt nationwide. The monthly index ticked up 1.2%.
Three consecutive years of underwriting losses mean insurers have paid out more in claims and expenses than they took in through the premiums we pay — leading to the steep hikes felt today.
Owning a car has generally become pricier. Motor vehicle maintenance and repair costs increased 4.6% year over year. Meanwhile, parking fees and tolls were nearly 6% higher than in July 2023.
But there was modestly good news at the gas pump.
The gasoline index was flat in July on a monthly basis, and 2.2% lower than a year ago. As of Aug. 14, the national average for gasoline was $3.45 per gallon, lower by a dime than a month ago, according to AAA data.
Read more: Tips for getting cheap car insurance in 2024
Some prices cool at the grocery aisle
Grocery price increases — at least some of them — are easing up. The grocery index ticked up just 1.1% annually, and 0.1% from May.
Some foods posting the largest cooldowns were ham, potatoes, rice, and apples.
But a few foods remain stubbornly high. Frozen juices and drinks jumped more than 19% year over year, and beef products keep getting pricier. Ground beef rose 4.2% from a year ago, steaks were up 3%, and roasts surged 7.5%. According to data from the Federal Reserve Bank of St. Louis, that translated to an average of $7.63 per pound for uncooked beef roasts.
Eggs, another product that saw pandemic price surges, were up 5.1% compared to June and 19.1% from a year ago.
While grocery prices overall are experiencing less volatility, consumers still feel the burn of inflation eating out. Restaurant meals increased 0.2% from June and 4.1% from a year earlier.
Senior care, other health costs continue to rise
Though inflation is easing overall, costs borne largely by seniors have been slower to cool.
Home healthcare for elderly or disabled family members eased slightly month over month but was still more than 9% higher than a year ago, the BLS found.
Hospital and related services were 6.1% higher than a year ago. Inpatient hospital services were also up 6.1% year over year, and outpatient care was up 5.4%.
Meanwhile, prescription drug costs grew by 2.5%, but over-the-counter medications surged nearly 4% annually, though both indexes were relatively flat compared to June.
What’s next
The new reading is the first time in more than three years that headline inflation was under 3%. But while inflation has fallen substantially from its peak of 9.1% in June 2022, the measure remains above the Federal Reserve’s 2% target.
Investors are betting heavily on a quarter-point interest rate cut when the Fed meets in September — and some Fed watchers even think a half-point cut is possible.