So you’ve just filled up the 16-gal. fuel tank of your Toyota Camry. At $4.27 per gallon,1 that’ll be $68, please! Now you’re wondering: Is it finally time to pull those old red-and-white “Whip Inflation Now” buttons out of the junk drawer?
Wait! You don’t remember those corny “WIN” buttons from 1974? When inflation surged more than 13%? When the Ford administration solemnly declared inflation “Public Enemy Number One”?
Inflation, mercifully dormant for nearly four decades, roared back to life in the summer of 2021 and has only grown worse since—hitting an annual rate of 7.9% in February 2022. Of course, the shocking rise in gasoline prices in early 2022 stands out as the most visible sign of the times. But, long before the Russia-Ukraine war sent pump prices skyrocketing, a combination of soaring demand and crushing supply-chain bottlenecks was fueling a huge rise in the price of everything from groceries and rent payments to airline tickets, automobiles, and raw materials.
By early 2022, the rate of annual inflation had risen to levels not seen since 1982. As shown in FIGURE 1, prices for fuel oils, used vehicles, motor fuels, gasoline and energy commodities were leading the pack, closely followed by natural gas services, groceries, airline fares, and new cars.