One of the biggest financial stories of 2022 will be inflation
The annual inflation rate was 7.1% in November, according to the latest Consumer Price Index (CPI), which is the federal government’s inflation gauge. But inflation hit some items more than others—jumping up to 254% for certain purchases.
Let’s take a look at some of the wildest price hikes of 2022.
Amazon Prime’s annual membership fee increases from $119 to $139 in 2022, resulting in an increase of around 17%. Monthly membership increased from $12.99 to $14.99.
In its earnings report from the fourth quarter of 2021, Amazon said the increase in Prime prices was due to rising labor and transportation costs and the continued expansion of Prime benefits for members. For more information on the latter, see “Here Are the Top 8 Benefits of Amazon Prime.”
Motor oils, coolants and fluids
When you want to ensure your car keeps running at peak performance, you need to make sure it has the right fluids. Motor oil, coolant, and other fluids you put in your car have increased in price by 19.6% year-over-year, according to the November CPI report.
Various manufacturers of these fluids, especially motor oils, announced price hikes during 2022, according to market analyst JobbersWorld. Exxon Mobil Corp. specifically cited raw material, transportation, and manufacturing costs as the main drivers of the increase in its price.
CPI data shows airfare prices increased 36% year over year. Much of that increase is due to high demand thanks to heavy travel in the summer of 2022, reports CNBC.
Airline executives point 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 may not feel any relief in 2023.
IRS underpayment fines
The IRS charges you a penalty when you pay less than you owe in taxes for a year. That quarterly interest rate doubles from 3% to 6% from the fourth quarter of 2021 to the fourth quarter of 2022.
You won’t get much help next year either. The IRS already plans to increase its rate to 7% during the first quarter of 2023.
Many types of debt
If you’re carrying debt, you’re likely paying higher rates than you currently have. The Federal Reserve has raised its interest rates for banks this year, and that can directly or indirectly increase the amount of interest you pay, as we explained in “6 Things That Get Costly Amid Fed Rate Hikes.”
For example, the average rate for a 30-year fixed-rate mortgage was 6.31% as of December 15, 2022 — double the 3.12% average rate one year earlier.
Many staple foods recorded their biggest increase in 12 months in November 2022, according to CPI. They include:
- Egg: 49.1% — the biggest 12-month increase since February 1984
- Margarine: 47.4% — the biggest 12-month increase since January 1975
- Prepared flour and flour mixture: 24.9% — the biggest 12-month gain on record
- Canned fruit: 20.9% — the largest on record
- Salad dressing: 19.9% — the biggest record
- Frozen vegetables: 18.3% — the largest on record
- Ice cream and related products: 17.5% — the biggest record
In comparison, wholesale prices as a whole saw a 12% year-over-year increase.
Meals in K-12 schools
According to CPI data, the cost of school lunches increased by 254.1% year over year in November.
Partly because of rising food prices 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 the free lunch program ending, and food prices rising, families are having a hard time.