High inflation has been crushing consumer budgets for much of the year, but costs are finally cooling off this summer for a wide range of everyday expenses.
After a long period of rising prices for almost everything in the typical household budget, U.S. inflation basically fell to 0% from June to July, according to the consumer price index (CPI) from the Bureau of Labor Statistics (BLS). The most recent CPI, which measures price changes for a variety of consumer goods and services, was heavily influenced by a decrease in oil prices. The takeaway for shoppers has been that prices for gasoline, many groceries, electronics and other items are finally retreating.
Bear in mind that consumers’ shopping baskets still cost a lot more overall than they did a year ago, with inflation up 8.5% for the 12 months ending in July. Yet there is cause for optimism: The fact that costs are finally dropping for many necessities may be an indicator that inflation is past its peak.
Here's a list of seven common purchases that consumers are paying less for lately.
Rising energy costs have been one of the biggest financial burdens for consumers in 2022, particularly when it comes to gasoline. Gas prices rose at the fastest pace ever earlier this year, with the U.S. average hitting a record high of more than $5 in mid-June — nearly $1.50 more than it was at the same time 12 months prior. As the summer has continued, however, gas prices have plunged.
As of Friday, the national average has dropped to $3.87, according to the American Automobile Association (AAA), down from around $4.33 this time last month. Although that’s still higher than the average of around $3.15 in July of last year, AAA says the stable global oil prices and modest demand have brought prices down.
“Drivers are now benefiting from gas prices that are $1.11 less than their peak in mid-June,” AAA spokesperson Andrew Gross said in a statement earlier this week.
Rising grocery prices have been brutal in 2022. But there have been some notable price decreases recently in supermarket aisles, especially when it comes to chicken wings. According to a report released by the U.S. Department of Agriculture, prices for chicken wings reached a peak of $3.25 per pound in May 2021. Last month, everyone’s favorite half-time snack dropped down to $1.68 a pound.
What’s more, chicken breast prices fell from $3.52 per pound in May to an average of $2.82 per pound in July. That’s still about $1 above prices from the same time last year, but a 23.6% decrease from the recent high is significant.
Retail prices for used cars have been on the decline for a few months, with the average cost of a used vehicle dipping a slight .4% from June to July, per the CPI. The auto research firm Edmund's put the average used car price at below $29,300 last month. That's still 7.4 % higher than a year ago, but an improvement for buyers compared to an average used car price of just under $30,000 at the end of 2022.
And there may be better news (and numbers) on the horizon. Analysts at Cox Automotive said recently that "wholesale used-vehicle values should see declines in the second half of the month," according to Kelley Blue Book (KBB). When wholesale prices dip, those savings typically get passed on to the consumer down the line.
In a side note that's good news for travelers, the CPI showed car, truck and automobile rentals also fell 9.5% from June to July of this year.
Along with chicken, certain cuts of beef are finally getting cheaper after a year of consistent increases for meat prices. Data from the USDA shows that from June to July of this year, prices for raw steaks and beef roasts fell 1.5% and 1.3%, respectively.
In the final weeks of July, the cost of ribeye and beef loin also dropped a whopping 10%. The USDA attributed the cost decreases to a boost in production.
Air travel prices are falling after unusually high spring and summer prices spurred by high fuel costs, high demand and limited capacity, according to the travel app Hopper. Flight prices showed a 7.8% drop from June to July, and Hopper's forecast data predicts the cost of an average airline ticket within the U.S. will fall roughly 25% from $332 in July to $295 in August.
The decline is likely part of a normal pattern in ticket prices, which typically increase during vacation season and fall during slower travel periods. But the seasonal decline this year is sharper than usual.
“Flight prices drop seasonally in late August through mid-October, as demand tapers off following the peak vacation months in May, June and July,” the report says. “The drop this year is larger than usual as a result of the abnormally high summer prices and earlier peak in demand.”
Prices for many electronics, including smartphones, computers and video and audio equipment, went down from June to July. According to the CPI, computer prices dropped 3.5%, while smartphones saw a staggering 20% price decrease.
While prices for most goods rose with inflation over the past year, electronics actually fell 9.3% for online shoppers, according to Adobe’s August digital price index. The software giant said the cost reductions in electronics online are part of an overall decline in e-commerce, as consumers reduce their online spending.
“Wavering consumer confidence and a pullback in spending, coupled with oversupply for some retailers, is driving prices down in major online categories like electronics and apparel,” Patrick Brown, vice president of growth marketing and insights at Adobe, said in a statement. “It provides a bit of relief for consumers.”
Major appliances like refrigerators and washers and dryers have been either very expensive or very hard to find in stock for much of the pandemic. Freezers, for example, were sold out in many stores in 2020 as more homebound people stocked up on food. More recently, supply chain issues have caused delays or inventory problems for shoppers seeking washers and dryers and other appliances.
So it's good news that appliance prices dipped slightly in July, even though shoppers shouldn't expect major savings in this category just yet.
The CPI showed a 1.8% decrease in major appliance costs from June to July. Still, appliance prices are 12% higher than they were this time last year, according to the BLS.
For anyone in the market for new appliances, take note that prices may continue dropping due to decreased consumer demand. The Conference Board, a nonprofit research group, reported in July that purchasing intentions for multiple items, including major appliances, continued to drop in July. The newly passed Inflation Reduction Act is also giving consumers direct rebates for items like energy-efficient stoves and other home appliances.