The Price of This Household Item Is Soaring – MSN Money

Special Report

The stock and bond markets have been roiled recently, and the public’s trust in the current administration’s handling of the economy was damaged by a remarkable surge in inflation. Prices of many household items are sharply increasing, and the price of fuel oil is soaring.

The rise in consumer prices has been particularly surprising because, for a decade, prices have risen by less than 2% in some years. The consumer price index rose by 7.5% in January, compared to the same month last year. That was the largest increase since February 1982.

The Federal Reserve has stated it will raise interest rates as many as four times this year in an attempt to bring down inflation. Many experts believe this will be too little too late. 

Harvard economist and former Treasury Secretary Larry Summers has been warning about the problem for months. He recently said, “It’s clear that inflation is the dominant economic problem as seen by the American people. It’s clear that inflation is significantly contributing to distrust in the institutions and to pessimism about the future.” The University of Michigan sentiment index dropped to a recent low in January. The primary worry among those polled was inflation.

As the year wears on, among the most substantial concerns is that consumers will pull in spending, which has been robust even during the COVID-19 pandemic. Price increases erode consumer spending, and this can sharply slow the economy. Consumer spending is about 70% of America’s gross domestic product.

The efforts of the Federal Reserve will result in higher interest rates across a number of areas, including mortgage rates. Historically low rates have helped drive the extraordinary rise in home prices. That, in turn, has increased home equity, which is a major part of the net worths of many people. (This is the city where people are making the most money selling homes.)

Unfortunately, there is a school of thought that high inflation may not end for months, and perhaps much longer.

24/7 Wall St. reviewed the recent Bureau of Labor Statistics consumer price index report to find the household items with the highest inflation in January. Prices of the items here increased by more than 10% last month compared to January 2021.

Among the shocking surge of prices in January were the cost of fuel and new and used cars, which rose as much as 40% and more. The prices of furniture and food also rose sharply. (With car prices increasing sharply, these are the fastest selling cars in America right now.)

Click here to see the price of this household item is soaring

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