If you look at the published U.S. inflation rate for 2010 it is 1.5% and for 2011 it is about 3% so far. While I believe these numbers are accurate for what the inflation measures, I do not believe they represent the inflation rate that average families experience.
I was looking at our bank and credit card statements this month and saw that the majority of our spending has been on gas, food and clothing. Then I started thinking about the increases we’ve seen over the past year. Here are some of the price increases that I’m aware of:
- Gas – Up 33% from $2.68 per gallon one year ago to $3.58 today
- Meat – Up 18% (FAO index is 180 vs 152 a year ago)
- Dairy – Up 14% (FAO index 232 vs 203)
- Food Prices – Up 39% (FAO index 234 vs 168 a year ago, this is world index and is probably lower in US)
- Clothes – Up 10% (there is no source for this but I found this estimate in several places)
- Insurance – Our insurance increased about 10% last year, including auto and home
- Heating Gas – Although natural gas prices were only slightly higher, LP gas for our home rose 27% (from $1.65 to $2.10)
- Electricity – Up 2.3% (a regulated annual increase from our electric company)
- Health Care – Our premiums rose 40% so we switched to an HMO to negate, however, the average health insurance premiums, according to Milliman Medical Index, rose 7.3% for employers and 9.2% for employees.
Now, consider our other major expenses:
- Mortgage – same as last year, although our house is worth 20% less according to zillow
- Car Payment – same as last year
As you can clearly see from the figures above, our personal inflation rate is WAY HIGHER than 3% this year! We are feeling the pinch, but I really feel for senior citizens that are living on social security. Because of “low inflation”, they received no increase in benefits this year, yet most of their costs are food, gas and of course health care!