The Price Deviations and Inflation Rates

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Table of Contents

Introduction
Discussion
Conclusion
Bibliography

Item	Description	Price Today	Price the Year You Were Born: <2000>	Calculated Inflation Rate
Bread (per lb.)	Daily food product	$1.81	$0.91 (U.S. Bureau, 2022a)	98.9%
Ground beef (per lb.)	Daily food product	$4.8	$1.48 (U.S. Bureau, 2022b)	224%
Chicken, whole (per lb.)	Daily food product	$1.86	$1.06 (U.S. Bureau, 2022c)	75%
Bananas (per lb.)	One of the fruits I eat regularly – Daily product	$0.63	$0.49 (U.S. Bureau, 2022d)	29%
Strawberries (per 12 oz.)	Food product I eat often but not regularly – price varies significantly depending on the season	$3.6 (November)/ $2.3 (June)	$1.6 (October) / $1.2 (June) (U.S. Bureau, 2022e)	~125%
Electricity per kWh	Daily necessity for heating and powering electronic devices	$0.167	$0.084 (U.S. Bureau, 2022f)	99%
Gasoline per gallon	Daily necessity for transport	$3.96 (Peaked during summer at $5.15)	$1.356 (U.S. Bureau, 2022g)	192%
TV	New models differ drastically from the old ones, so the inflation rate might not be accurate, but it is interesting to see the differences	$7,499 (new plasma tv model) (Retirepedia, 2021)	$2,000 (Smart TV/ high-end model)	275%
Vehicle	Price for a new average car	$48,000	$21,850 (Statista, n.d.).	120%
Sneakers	A casual clothing item	$110.15 (MacLoughlin, 2021)	$40.33 (Retirepedia, 2021)	173%

Introduction

As seen from the table, the price deviations and inflation rates vary significantly depending on the item, season, and any global events that affect the economy. The average cumulative price change since 2000 is 76%, while the annual average inflation rate is equal to 2.52% (U.S. Bureau, 2022h).

Discussion

The prices of many daily items on the list have increased by approximately the same value. It is particularly noticeable in food pricing, where the cumulative cost of chicken has increased by 75%. However, even within the same category, there are several outliers, such as ground beef (225%) and bananas (29%). Various factors affect the prices, and it is possible to explain each of the items. For instance, there is a large surplus of bananas globally, which are typically imported from Latin American countries (Freshdelmonte, 2022). As a result, the prices for bananas do not deviate as much as for the average goods.

The opposite is true for daily items that the country lacks. For instance, the Russian-Ukraine war has significantly affected energy supplies, including gas and oil. Moreover, it affected the global supply chains that connected Russia, Europe, and the United States. As a result, the cost of electricity and gasoline has increased significantly, even considering the average inflation rate. It is a global problem, and this situation is likely to persist until the conflict is resolved or oil companies choose alternative policies. Additionally, the government can intervene in the market and implement new regulations and policies to make these daily necessities more accessible to people with average incomes.

Conclusion

Lastly, the inflation rate for electronics is not entirely accurate because the level of technological development is drastically different. It is particularly noticeable over the period of twenty-two years, and most people in 2000 could not imagine how much the technologies would develop. As a result, even though an average plasma tv cost approximately $7,500 in 2000, this price was due to limitations in manufacturing and overall knowledge of electronics. In summary, while the items on the list represent the inflation rate to an extent, it is critical to analyze each product separately to understand the causes of the price change.

Bibliography

Freshdelmonte. (2022). Why bananas have avoided inflation – So far. Web.

MacLoughlin, D. (2021). The average price of sneakers. Run Repeat. Web.

Retirepedia. (2021). Cost of living in 2020. Web.

Statista. (n.d.). Average price of new and used passenger cars sold and leased in the United States from 1990 to 2010. Web.

U.S. Bureau of Labor Statistics. (2022a). CPI average price data, U.S. city average (AP). Item: Bread, white, pan, per lb. (453.6 gm). Web.

U.S. Bureau of Labor Statistics. (2022b). CPI average price data, U.S. city average (AP). Item: Ground beef, 100% beef, per lb. (453.6 gm). Web.

U.S. Bureau of Labor Statistics. (2022c). CPI average price data, U.S. city average (AP). Item: Chicken, fresh, whole, per lb. (453.6 gm). Web.

U.S. Bureau of Labor Statistics. (2022d). CPI average price data, U.S. city average (AP). Item: Bananas, per lb. (453.6 gm). Web.

U.S. Bureau of Labor Statistics. (2022e). CPI average price data, U.S. city average (AP). Item: Strawberries, dry pint, per 12 oz. (340.2 gm). Web.

U.S. Bureau of Labor Statistics. (2022f). CPI average price data, U.S. city average (AP). Item: Electricity per KWH. Web.

U.S. Bureau of Labor Statistics. (2022g). CPI average price data, U.S. city average (AP). Item: Gasoline, all types, per gallon/3.785 liters. Web.

U.S. Bureau of Labor Statistics. (2022h). CPI inflation calculator. Web.

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The Price Deviations and Inflation Rates

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