It’s been well-documented that Americans are paying more for food, gas, and other essentials this year as inflation has hit a 13-year high, but last month consumers saw price increases show up in some more unusual spots.
Namely, after months of used or new cars experiencing the highest montly price changes of any product, they were dethroned in August.
Cars were replaced by window coverings, which saw a 17.2% price increase last month compared to July — the top price increase last month, according to Tuesday’s Consumer Price Index report.
Trailing just behind window coverings were men’s coats, men’s shirts and sweaters and salad dressing, which saw the next highest price percentage increases of 7.9%, 4.3%, 4.0%, respectively.
Overall, U.S. consumers paid 0.3% more for goods and services last month compared to July. But compared to last year, consumers are paying 5.3% more, the latest Consumer Price Index report revealed.
Window coverings saw a 17.2% price increase last month compared to July — the top price increase last month.
Over the past few months, used car prices in particular have been in the spotlight after experiencing a 10% monthly price increase in April, a 7.3% increase in May and then a 10.5% increase in June.
The global microchip shortage, as well as increased demand for buying and renting cars during the summer travel season, helped boost prices. But last month used car prices fell by 1.5%, the first decline since February.
Supply chain issues with paper are affecting prices on a range of goods
As for what’s driving up the cost of window coverings, it’s likely related to the latest industry to experience a supply chain challenge: paper, said Alla Valente, a senior analyst at Forrester FORR, +2.14%.
“It’s having a tremendous cascading effect on products that use paper — books, stationery, packaging and even window coverings,” she told MarketWatch. “Paper supply chain issues stem from labor shortages due to the delta variant, droughts and extreme weather.”
(Home Depot HD, 0.47% and Lowe’s LOW, 1.05% didn’t immediately respond to requests for comment on whether the two home improvement chains have raised prices for window coverings.)
Wood pulp prices were up 50% in August compared to a year ago, leading to a price increase and shortage in paper products.
On top of that, wood pulp prices were up 50% in August compared to a year ago, according to the latest Producer Price Index data published by the Bureau of Labor Statistics.
“The confluence of all these factors and systemic risks is rearing its ugly head,” Valente said. “Unfortunately, this won’t be the last industry to feel the impact.”
The paper shortage is also causing delays in mailing wedding invitations and resulting in price increases for toilet paper, The New York Post reported.
Men are paying more for their clothes
Men’s apparel is becoming more expensive these days due to “meaningful pent-up demand in core categories, including social, wedding, and workwear, that retailers now don’t have to discount,” said Katie Thomas, who leads the Kearney Consumer Institute, an internal think-tank at management consulting firm Kearney.
Women’s apparel, on the other hand, “is a more crowded category and sees more frequent seasonal shifts in demand, driving more competitive pricing,” she added.
Supply chain bottlenecks occurring amid a rise in COVID-19 cases may also be fueling the higher prices consumers paid last month for men’s apparel and salad dressing. Analysts expect these supply chain issues to persist as the holiday shopping season approaches.