"Official" Inflation vs. Personal Inflation

The “official” inflation rate is currently around 4% (The highest level since 1991), but your personal inflation rate could be much higher. Personal inflation is the inflation we feel in our daily lives.

If you want to find additional information about inflation visit InflationData.com.

Here are some examples of just how much more we paying in 2007 and 2008. I tried to get 2008 numbers when I could.

2007 Energy costs rose 17.4%
2007 Food costs rose 4.9%
2007 Gasoline prices were up 29.6%

Oil

Today 04-24-08 the price of a barrel opened at the near record high of 117.93. The price you pay at the pump isn’t only affected by the strong demand. Additionally oil has risen because, “Twenty-five percent of the increase in oil prices is strictly due to the fact that the dollar has gone down by 25 percent, because oil all over the world is priced in dollars (http://voanews.com/english/2008-04-23-voa55.cfm).”

Health Care Costs

Data released 04-28-08 shows health insurance premiums are up 30% from 2001 - 2005. In 2007 health insurance rose 6.9%! "According to an analysis of government statistics being released Tuesday by the Robert Wood Johnson Foundation (RWJF), the average dollar amount employees must pay per year for family health coverage went up by 30% from 2001 to 2005 (http://health.usnews.com)."

Food

According to a Fool.com article demand for crops is up 40% in 2007 (http://www.fool.com/personal-finance/general/2007/10/26/foods-getting-pricier-than-fuel.aspx?terms=food+prices&vstest=search_042607_linkdefault).

2007 Soybeans are up 75%
2007 Wheat rose 75%
2007 Chicken is up 15%
2007 Milk is up 26%

Rice

According to the Seattle Times U.S. rice futures hit a record high on 04-23-08. Consumers are paying 60-70% more for rice in April 2008 than they did at the beginning of the year. A 20 pound bag that sold for $9 just two months ago, now sells for $16. Warehouse stores Costco and Sam's Club are restricting on how much rice customers can buy at once.

Wages

With all these price increases you would think wages would inflate as well. “Workers’ wages failed to keep up with the higher inflation. Average weekly earnings, after adjusting for inflation, dropped by 0.9 percent in 2007, the biggest setback since a 1.5 percent fall in 2005 (http://www.msnbc.msn.com/id/22681319/).”

When I look at these numbers I start to distrust the 4% inflation rate we all hear about. When the things I use daily are up double digits, the inflation rate I feel in my wallet is much greater than 4%. If wages are not raising this exacerbates the issue even further.