It’s not just food and fuel: Inflation is impacting the cost of almost everything

Minneapolis
CNN Business
 — 

Inflation has crept into practically every corner of Americans’ lives.

In Queens, New York, auto repair shop owner Audra Fordin says some customers have opted to save money by patching up a punctured tire only to be sideswiped by costlier repairs later.

In Mount Juliet, Tennessee, the operators of a nonprofit dog sanctuary have seen pet food and veterinary care costs soar while donations have faded.

In New Orleans, a fledgling art and cards business has had to play a guessing game with suppliers, rarely knowing when products might arrive, or how much they will cost due to fuel surcharges.

In St. Paul, Minnesota, the owners of a sporting goods store have been hearing from vendors about price increases that have yet to come down the pike.

From new tires to a dental visit or a new piece of sports gear, nearly every spending category tracked in the Consumer Price Index shows a price increase from not only last year but also from before the pandemic. The hikes, spurred in part by high crude oil prices, supply chain disruptions and global economic pressures, highlight just how pervasive inflation has become in America.

“Everything that is directly or indirectly touching or dependent upon those really hot categories – food and energy – is also seeing faster rises, but it really is a broad-based increase,” said Nikolai Roussanov, a finance professor at the Wharton School of the University of Pennsylvania.

In June, prices for major appliances were up nearly 24{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} since before the pandemic in June 2019, tires were up 20{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9}, veterinary services were up 17{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9}, sporting goods were up about 14{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9}, according to the CPI.

Although those increases may pale in comparison to gas and grocery costs that are significantly higher than what they were in 2019, a 20{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} hike on a one-time – and frequently urgent – expense can be a budget killer at a time when paychecks are spread thin.

“Low-income families are easily derailed by these unexpected expenses,” said Elizabeth Ananat, a Barnard College economics professor who studies topics such as inequality, poverty and the pandemic’s effects on lower-income mothers and families.

And while the pandemic-related stimulus efforts like expanded child tax credit payments temporarily alleviated some of these ongoing money concerns for families by helping them manage unexpected expenses and maintain employment, low-income families have exhausted that savings buffer, she said.

“When we look at bank balances for low-income families, that has gone back down to zero, on average,” she said. “When that happens, people don’t make ends meet … and it starts snowballing.”

Businesses are seeing firsthand just how the higher costs are rippling through every facet of life and the tough choices consumers are making as a result.

At Great Bear Auto Repair in New York City’s Queens borough, “everything is going up” in price, said Fordin, whose great-grandfather started the business in 1933.

“My motor oil is off the hook,” she said. “Every time they deliver, every week, my motor oil prices are going up, my auto parts prices are going up, my labor’s going up, my cost of living is going up.”

For the most part, Great Bear is having to eat a lot of the price increases – especially when it comes to services like oil changes, she said.

“We’re just doing it at cost so that we can still provide the service,” she said. “People don’t necessarily have the finances right now for even more of an increase.”

Broad-based inflation serves as a double whammy for the auto business, which has been in a state of flux due to high oil prices, shipping delays and computer chip shortages. Many customers are logging even more miles on their cars because they cannot afford a new or used one and have started to pull back on repairs – even the relatively small ones.

It’s a shift in consumer behavior and sentiment that Fordin last saw around 2008, when oil prices spiked, and the Great Recession was in full swing.

“It feels like hesitation; people are scared,” she said. “They’re uncomfortable with the money. You can’t afford to put gas in your car. You can’t afford to put oil in your car.”

At Old Friends Senior Dog Sanctuary in Tennessee, donations serve as a lifeline.

The 10-year-old nonprofit organization provides food and veterinary care to more than 500 older dogs – including 125 rescues and about 400 furry friends placed in “Forever Foster” homes. The operating costs run about $4 million a year, and the organization is 100{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} reliant upon donations.

Those donations have dropped off significantly since the end of last year, falling by 50{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9}, said Zina Goodin, the sanctuary’s executive director.

“Everybody’s being hit [by rising prices],” she said.

Old Friends has a financial buffer that’s filling in the gaps, but those operational costs have been on the rise, she said. The cost of food is about 25{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} more than it was last year, medication costs are climbing and labor costs are going up as the nonprofit tries to stay competitive for workers, she said.

“We’re OK right now, but as time goes on, that buffer will get eaten up,” she said, “and we’re concerned about what’s going to happen.”

Magazine Street in New Orleans is home to cafés, restaurants and boutiques, including The Collective Shop, an art print and stationery business launched in 2020 by Alysia Fields and Toni Point.

After successfully surviving the worst of the pandemic, the store and online retailer is now trying to navigate this period of high inflation, Fields said. Card stock and other paper goods have become more expensive, as well as harder to come by. Supply has been shoddy, leaving Fields and Point to guess inventory needs and buy more than they typically would.

“We have to play this fun game of overstocking in certain things, thinking that we’re going to need it later,” Fields said.

The cost increases have forced the young business to pause its free shipping online, since supply costs and shipping surcharges have become too unpredictable.

For the most part, The Collective Shop has tried not to hike the price of its cards and paper goods, instead letting the wall art serve as the moneymaker, she said.

But for a shop that’s part of a business district heavily reliant on passers-by and tourists, Fields has noticed that inflation seems to be taking a bite.

“We’re so used to crawling with travelers, and it just doesn’t feel the same,” she said. “You can tell that there’s still a lot of hesitation to travel and to purchase anything outside of food and liquor.”

Inflation levels are expected to moderate in the months to come, but consumers likely will feel the effects of high prices for many months ahead.

At Joe’s Sporting Goods in St. Paul, Minnesota, most of the outdoor gear on display – a colorful array of kayaks, tents, paddle boards and other products – was manufactured more than six months ago and at a time when the petroleum used to make those items was considerably cheaper, said Jim Rauscher, co-owner and president of the Twin Cities business. Russia’s invasion of Ukraine earlier this year helped send oil prices rocketing to record levels, affecting everything from prices at the pump to key materials based on petroleum – and Rauscher is bracing for price spikes.

The kayak that might retail for $850 now likely will run $1,000 or a little more next year, he said.

“You’re going to see the higher prices at least through the holidays and possibly through next spring,” he said.

While everyone along the supply chain is feeling the effects of higher prices, Rauscher tries to keep the situation in perspective. His family has run Joe’s for nine decades and has navigated plenty of choppy economic waters.

“Having been through it in the past and knowing that everything is kind of cyclical, you’ll get through it,” he said of his business.

As widespread inflation continues to put certain purchases out of reach, families are learning to adjust their budget – and their outlook.

When Amy Randall’s dishwasher broke down a couple of months ago, the substitute teacher watched video after video on YouTube to learn potential fixes, but none of them worked. She washes dishes by hand now.

When the cost of chuck roast hit $28, Randall’s family turned instead to their garden teeming with zucchini.

Her house in New York’s Catskills region could use a new coat of paint, but the prices quoted are now completely out of league for the 60-year-old single mother.

“I don’t care anymore that the paint is chipping on my house, I don’t have the money,” she said. “People have to make a living, and people are charging more for things. And so all of these things just have to get put aside.”

Randall said she has taken on a more mindful approach, being less impetuous and more resourceful, or simply “being OK with things not being OK,” she said.

“I don’t want my kids to see the sorrow and distress,” she said. “I want my kids to see that we’re flexible, and we have everything we need, but some things are just too expensive.”