OPINION: The things that we are still spending money on — food, rent, booze and video streaming — are going up in price. The things that we aren’t buying — gasoline, clothing, transportation and hotel rooms — are going down in price.
The things that we are still spending money on — food, rent, booze and video streaming — are going up in price as the coronavirus pandemic wears on. The things that we aren’t buying as much of — gasoline, clothing, transportation and hotel rooms — are going down in price.The Bureau of Labor Statistics reported Wednesday that the consumer price index fell 0.1% in May, driven by deep discounting on energy, car insurance, clothing and public-transportation prices.
Most households spend most of their income on necessities, such as food, shelter, transportation, health care and clothing. Low-income households typically spend 82% of their income on those five categories, while middle-class families spend 78% of theirs, according to researchers at the Brookings Institution. Even high-income families spend about two-thirds of their income on necessities.Most of us can put off buying clothes for a few months.
Shelter prices are not rising as fast as they were at the beginning of the year, but they are still increasing, up 2.6% in the past year compared with a 0.9% drop in the prices of everything else. But if you’re among the 52% of households that lost more than 25% of their income, you might be feeling the pinch, especially if you are surviving on that one-time $1,200 check or on the soon-to-expire $600 unemployment bonus. Especially if grocery prices keep going up 1% every month.
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