One of the biggest financial stories of 2022 was inflation
The annual inflation rate was 7.1% as of November, according to the latest Consumer Price Index (CPI), which is one of the federal government’s gauges of inflation. But inflation hit some items more than others — shooting as high as 254% for specific purchases.
Let’s take a look at some of the wildest price hikes of 2022.
Amazon Prime
The cost of an annual Amazon Prime membership went from $119 to $139 in 2022, resulting in an increase of about 17%. A monthly membership went from $12.99 to $14.99.
In its earnings report from the fourth quarter of 2021, Amazon said the Prime price increase was due to rising labor and transportation costs and the continued expansion of Prime benefits for members. For more on the latter, check out “These Are the 8 Best Benefits of Amazon Prime.”
Motor oil, coolant and fluids
When you want to ensure your car keeps operating at peak performance, you need to make sure it has the right fluids. The motor oil, coolant and other fluids you put in your car saw prices increase by 19.6% year over year, according to the November CPI report.
Various producers of such fluids, especially motor oil, announced price increases during 2022, according to market analyst JobbersWorld. Exxon Mobil Corp. specifically cited the cost of raw materials, transportation and manufacturing as the main drivers of its price increases.
Airfare
The CPI data shows airfare increasing 36% year over year. Most of that increase is due to high demand thanks to robust travel in the summer of 2022, reports CNBC.
Airline executives pointed out that demand is high right now, but labor shortages and limited schedules still mean fewer available seats. This combination is driving prices higher — and travelers might not see relief in 2023.
IRS underpayment penalties
The IRS charges you a penalty when you pay less than you owe in taxes over the year. That quarterly interest rate doubled from 3% to 6% from the fourth quarter of 2021 to the fourth quarter of 2022.
You won’t get much relief next year, either. The IRS is already planning to increase its rate to 7% during the first quarter of 2023.
Many types of debt
If you’re carrying debt, chances are you’re paying higher rates than you have in a while. The Federal Reserve has been hiking its rates for banks this year, and that can directly or indirectly increase how much interest you’re paying, as we detail in “6 Things That Are Getting More Expensive Amid Fed Rate Hikes.”
For example, the average rate on the 30-year fixed-rate mortgage was 6.31% as of Dec. 15, 2022 — double the average rate of 3.12% one year prior.
Groceries galore
Many grocery staples saw their largest 12-month increase on record in November 2022, according to the CPI. They include:
- Eggs: 49.1% — the largest 12-month increase since February 1984
- Margarine: 47.4% — the largest 12-month increase since January 1975
- Flour and prepared flour mixes: 24.9% — the largest 12-month increase on record
- Canned fruit: 20.9% — largest on record
- Salad dressing: 19.9% — largest on record
- Frozen vegetables: 18.3% — largest on record
- Ice cream and related products: 17.5% — largest on record
By comparison, grocery prices overall saw a 12% increase year over year.
Food at K-12 schools
According to CPI data, the cost of school lunches increased by a whopping 254.1% year over year in November.
Part of that is due to the rising cost of food across the country. However, as Bloomberg reports, the start of the 2022-2023 school year in September also coincided with the end of a pandemic-era program that provided free school meals to all public school students. With this free lunch program expiring, and food prices going up, families are feeling the pinch.