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Prices Are Skyrocketing, But Only For Things You Actually Need

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Chart: Prices Are Skyrocketing, But Only For Things You Actually Need

Prices Skyrocketing, But Only For Things You Actually Need

Everything else has fallen in price over the years

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

The way that economic data is presented, we often think of inflation as a singular number representing a general increase in prices.

For example, it might be reported that nominal GDP growth was 3%, and that inflation was 2%. Since the inflation represents a rise in price levels, we subtract it from the nominal rate to get a real GDP growth of 1%.

But in reality, price changes do not affect products and services in such a uniform and simple fashion. In the above example, all goods aren’t increasing in price at a 2% rate – that’s just an average. What really happens is that there is a full spectrum of price changes: some goods end up falling in price, while other goods get more expensive.

What’s Actually Getting More Expensive?

This week’s chart looks at the change in prices of consumer goods since 1996, using data provided by Mark J. Perry of AEI’s Carpe Diem blog.

Here’s his original chart, which is also very telling:

Price changes from 1996 to 2016

The average price increase, as shown by the CPI (Consumer Price Index), is 55% over the last 20 years. Meanwhile, the prices of individual sub-categories have a much wider variance.

The good news is that the price of technology is generally getting cheaper. Software, TVs, wireless, and new cars have all come down in price relative to the CPI. Clothing, toys, and furniture are also way more affordable than they were 20 years ago.

The bad news? Most of the above items are not the ones that really matter to most of us. The things we actually need to live healthy and fruitful lives – education, food, healthcare, childcare, and housing – are all skyrocketing in cost.

Tuition costs have soared 197%. Textbooks have more than tripled in price, going up 207% since 1996.

Taking care of our loved ones is more expensive. Healthcare and childcare costs have risen almost as much: 105% and 122% respectively.

Meanwhile, basic necessities such as shelter and food have increased at rates higher than the CPI as well. Housing costs are 61% higher and food is 64% more expensive.

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Markets

Will Tesla Lose Its Spot in the Magnificent Seven?

We visualize the recent performance of the Magnificent Seven stocks, uncovering a clear divergence between the group’s top and bottom names.

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Will Tesla Lose Its Spot in the Magnificent Seven?

This was originally posted on our Voronoi app. Download the app for free on iOS or Android and discover incredible data-driven charts from a variety of trusted sources.

In this graphic, we visualize the year-to-date (YTD) performance of the “Magnificent Seven”, a leading group of U.S. tech stocks that gained prominence in 2023 as the replacement of FAANG stocks.

All figures are as of March 12, 2024, and are listed in the table below.

RankCompanyYTD Change (%)
1Nvidia90.8
2Meta44.3
3Amazon16.9
4Microsoft12
5Google0.2
6Apple-6.7
7Tesla-28.5

From these numbers, we can see a clear divergence in performance across the group.

Nvidia and Meta Lead

Nvidia is the main hero of this show, setting new all-time highs seemingly every week. The chipmaker is currently the world’s third most valuable company, with a valuation of around $2.2 trillion. This puts it very close to Apple, which is currently valued at $2.7 trillion.

The second best performer of the Magnificent Seven has been Meta, which recently re-entered the trillion dollar club after falling out of favor in 2022. The company saw a massive one-day gain of $197 billion on Feb 2, 2024.

Apple and Tesla in the Red

Tesla has lost over a quarter of its value YTD as EV hype continues to fizzle out. Other pure play EV stocks like Rivian and Lucid are also down significantly in 2024.

Meanwhile, Apple shares have struggled due to weakening demand for its products in China, as well as the company’s lack of progress in the artificial intelligence (AI) space.

Investors may have also been disappointed to hear that Apple’s electric car project, which started a decade ago, has been scrapped.

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