Staff Writer: Julian Cassady
Imagine waking up in your dorm at midnight, stomach growling because you waited too long to get a meal before the dining hall closed. All you can think of is food, and you remember that there’s a vending machine in the common area with all of your favorite $2.00 candy bars. Stumbling out of bed, you absentmindedly grab two one-dollar bills and begin on your path to deliciousness. Upon sliding the crisp dollar bills into the machine and fumbling through the selections, you patiently await the Hershey’s bar to drop down… but nothing is happening.
Confused, you look more closely at the prices and notice that the price for your favorite snack rose to a whopping $2.50! Such a tragedy, and on your way back shamefully to your dorm room, you ask yourself, “Why did the prices go up?” That’s a question that the Consumer Price Index (CPI) Report can answer.
As defined by Investopedia.com, CPI “is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.” Each month the U.S. Bureau of Labor Statistics (BLS) releases an itemized report that shows the inflation rate of a given industry both individually and for the whole country. This report illustrates the increase/decrease of the average price of goods and services in a sector due to the change in raw materials and energy costs.
The month of March showed a staggering 1.2% increase in inflation, the largest month-to-month change since 2005. Cumulatively, inflation has risen 8.8% since March 2021. This is a big reason why your candy bar got a price hike, and that includes price increases in the ingredients for the candy bar as well as the paper and ink used for the packaging.
Surprisingly, the report’s release at 8:30 AM Monday morning had a neutral to positive effect on the stock market, with the S&P 500 ending up 1.12% at the conclusion of the trading day Wednesday, April 13th, 2022, at 5 PM. Many investors are saying that the broader market already “priced in” the dismal results of the CPI Report, causing stocks to react positively since the report wasn’t worse than expected.
What does this mean for the average consumer? Well, for one, it’s not just Hershey’s bars getting more expensive. All food has gone up in price as well as gas and healthcare. During times of high inflation, it’s good to be mindful of intelligent ways to save money and get good deals, as regularly priced items are now expensive enough to feel like breaking the bank. Most students are feeling the pain of inflation due to their minimum wage jobs choosing not to pay them adequately for basic necessities. Many are resorting to more affordable “fast food” options such as a cup of instant ramen noodles over an egregiously priced McDonald’s meal.