US consumer prices are rising at the slowest pace since 2008, but the cost of everyday items like hot dogs, shoes, and prescription drugs are reaching decades-long highs.
The consumer price index, which measures how much people are paying for everything from gas to whiskey, rose 0.8% in 2014, slower than the 1.5% pace in 2013, according to the Labor Department. Aside from the 0.1% increase in a recession-scarred December 2008, this marks the smallest December-to-December increase in 50 years.
Slowing inflation could have huge implications for what actions the Federal Reserve might take to increase interest rates and withdraw some of its support for the US economy. But the headline number, which is greatly impacted by a 21% drop in gas prices, belies the big price jumps American families are experiencing at places like the grocery store.
The price of household food staples like ground beef (up 19.2%), eggs (up 10.7%), butter (22.5%), and tomatoes (up 16.5%) are rapidly increasing, with the Labor Department’s index of meat, poultry, fish, and eggs notching its biggest increase since 2003. (The price of frankfurters rose 12.1% in 2014.)
High prices also are popping up in pockets like housing, where prices are higher than they’ve been since 2007, and prescription drugs, which (adjusted for inflation) recorded the highest prices since 1992.
If there’s a consolation for American consumers, it’s that they have more dollars in their pockets right now to pay for the increases, thanks to the 40% drop in gas prices since June.