Prices of goods in 2022: looking back at the result of inflation
Image source: CNN
Prices: Inflation in the United States last year was at its highest level in decades.
Since the beginning of 2022, the Federal Reserve has been fighting inflation with every tool, including raising interest rates.
The Bureau of Labor Statistics recently released data on inflation, which showed a drop in price increases to 7.1% for 2022 through November.
Between November 1 and December 24, retail prices rose 7.6% (inflation unadjusted), making it impossible for consumers to buy gifts without breaking the bank.
The Mastercard Spending Pulse gave the data, which examines retail purchases aside from auto sales.
Throughout 2022, the price of holiday meals soared while food costs rose faster than inflation.
While some products saw double-digit, phenomenal growth, others saw little change or even a decline.
Retailers became aware of a shift in consumer behavior as soon as the demand for pricey electronics declined.
Major electronics prices fell during the year ending in November.
- Smartphones plunged 23.4%
- TV prices dropped 17%
- Computers rolled back prices by 4.4%
- Major appliances fell by 1%
In anticipation of supply chain issues and projected increases in consumer demand, several retailers, including Best Buy and Walmart, stocked up at the start of 2022.
However, the rising costs and dwindling customer confidence scuttled their plans.
Additionally, early in the epidemic, when confined, consumers made sizable purchases or upgrades.
Read also: Minimum wage in US will increase this year
Apparel & toys
Although slowly, apparel prices rose last year.
- Clothing prices rose by 3.6%
- Footwear increased by 2.3%
- Sporting goods climbed 2.7%
- Toys had a meager 0.6% increase
Despite the modest price increase, the items were a bargain because inflation outpaced them.
Doug McMillon, the CEO of Walmart, said the following in December:
“In toys, sporting goods, categories like that, prices have come down more aggressively.”
“We’re still inflated, but we’re not inflated nearly as much as we are in the other categories.”
However, because retailers overestimated customer demand, there was a stockpile of additional goods.
Offers to shift inventory were made by stores, encouraging customers to make purchases.
As a result, retailers were able to regulate prices.
The pandemic caused demand for air travel to fall to an all-time low in 2020, but it rose again in 2022.
However, the price of flying rose by 36% annually.
In March, Delta’s president, Glen Hauenstein, referred to the rise as “unprecedented.”
“I have never seen… demand turn on so quickly as it has over Omicron,” said Hauenstein.
Due to high fares and crowded flights, airlines made a record amount of money in April, May, and June.
They made a full-force resurgence two years after the pandemic-induced lockdowns thanks to travelers.
Meanwhile, the price of land transportation rose.
Gasoline prices rose by 10.1% but have since dropped from their all-time highs.
The Russian invasion of Ukraine and geopolitical strategies that relied on the oil supply were to blame for the volatility in gas prices.
According to GasBuddy’s predictions, the national average’s likelihood of returning to the $4 per gallon price level could come as early as May.
GasBuddy, a mobile app that tracks fuel prices, does not forecast another year of severe volatility.
Read also: Tax Credit for Electronic Vehicles Usher in Confusion
In 2022, the cost of food rose by 10.6%, above general inflation.
Through November 2022, several factors contributed to price increases for specific grocery items.
Due to the catastrophic avian virus, a scarcity of supplies, and high demand, egg prices increased by 49.1%.
Price changes brought on by the Russian invasion of Ukraine resulted in a rise in margarine of 47.4%.
In addition, as the global milk supply decreased, butter prices rose by 27%.
Another victim of the crisis in Ukraine is flour.
The worldwide grain market disruption and high US transportation costs caused a 24.9% increase in flour prices.
Due to crop disease, lettuce prices increased by 19.8% in California.
During that period, there was a 12% increase in the price of food.
Starting in 2022, eating out became steadily more expensive; thus, many customers accepted higher prices as an alternative.
As restaurants boosted menu pricing to offset their increasing input costs, the cost of eating out jumped by 8.5% last year.