Since 2000, we have seen some major shifts in what the costs of certain items are. As a headline number, price levels have increased by 82.4% since 2000. While that is true in the aggregate, depending on what items you are purchasing, the costs have significantly changed in the 21st century.
The widely reported Consumer Price Index (CPI) is a key indicator for tracking inflation in the overall US economy. However, delving deeper into the data reveals stark variations in price increases across different categories.
While the prices of items like TVs and toys have experienced significant declines, essential categories such as healthcare and education have witnessed substantial surges. Notably, consumer goods that are easily outsourced have seen considerable decreases, contrasting with categories that are less easily outsourced, which have experienced higher increases.
The surge in medical costs carries significant consequences for the US population, with Forbes highlighting that 50% of Americans now carry medical debt. The discourse on medical inflation is prevalent, fueled by rising labor costs, an aging population, and the escalating expenses of pharmaceutical products, contributing to an exponential increase in this number.
In summary, the impact of inflation varies for individuals based on their life stage and evolving needs. As a nation driven by consumerism, the US faces challenges when inflation hits critical areas. Planning for these costs becomes paramount to ensure financial goals are met.
Presented by the Financial Planning Committee of Lake Street, an SEC Registered Investment Adviser
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