WASHINGTON — Apartment rents are up. So are prices for restaurant meals, haircuts, gym memberships and a cup of coffee.
For American consumers who have become used to flat or even falling prices for several years, an unfamiliar sight has emerged in many corners of the economy: Inflation is ticking up.
The price increases remain modest. And in many cases, they’re canceled out by price declines for other items that are keeping overall inflation historically low.
Yet the stepped-up price tags for a range of consumer items are the largest since the Great Recession ended six years ago. They actually reflect a healthier economy: Many businesses have finally grown confident enough to pass their own higher costs on to consumers without fear of losing customers. Employers have added nearly 5.6 million jobs the past two years.
Signs of emergent inflation are a key reason the Federal Reserve, which is meeting this week, will likely raise interest rates from record lows later this year. Inflation has long trailed the Fed’s 2 percent target rate but is on track to return to that level in coming months.
In June, the price of haircuts jumped 1.6 percent, the biggest monthly jump in the 62 years that the government has tracked the data. Over the past year, they’ve surged 2.8 percent, the largest year-over-year gain since 2008.
Coffee prices jumped 6.1 percent in January from 12 months earlier, the most in nearly three years. Starbucks has responded by raising the price of a cup of coffee by between 5 cents and 20 cents.
And beef prices have soared nearly 11 percent in the past year, which has led Chipotle to raise prices .by an average of about 30 cents per entree.
The biggest driver of inflation this year has been residential rents. They climbed 3.5 percent in June from a year earlier.
Economists expect the price increases to continue, in part because they’re occurring mostly in services, whose prices tend to be comparatively stable.
Economists call these “sticky” prices. They include rent, insurance, haircuts, restaurant meals and utility bills.
Send questions/comments to the editors.
Success. Please wait for the page to reload. If the page does not reload within 5 seconds, please refresh the page.
Enter your email and password to access comments.
Hi, to comment on stories you must . This profile is in addition to your subscription and website login.
Already have a commenting profile? .
Invalid username/password.
Please check your email to confirm and complete your registration.
Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.
Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.