Medical costs are continuing to rise at a faster pace than virtually everything else, according to data from the Bureau of Labor Statistics released on Tuesday.
The consumer price index, a measure of average price changes and inflation, rose 0.3% month-on-month and 1.5% year-on-year, according to Bloomberg. Both figures were in line with expectations.
On a one-month time frame, the headline CPI was boosted the most by medical costs.
The index for medical care commodities – prescription drugs, over-the-counter pills, and such – rose 5.2%, the most among all categories. Medical care services increased by 4.8%.
Medical costs have jumped partly because of rising health-insurance premiums. Also, as more Americans use high-deductible health-insurance plans, their out-of-pocket medical expenses are increasing.
According to the Kaiser Family Foundation, 83% of workers have a deductible – an amount that they have to pay themselves for medical care before insurance covers it – with an average of $1,478. The average deductible for workers has gone up $486, or 49%, since 2011, the foundation said in an annual survey published in September.
- Societe Generale
The CPI report also showed that energy costs rose year-on-year as crude-oil prices rallied to $50 a barrel. The cost of rent inched up again, while medical care services inflation was flat compared with the same time a year ago.
The number that matters the most to many economists right now is year-on-year core CPI, which strips out volatile food and energy costs. It climbed 2.2%, while 2.3% was expected.
The Federal Reserve prefers to measure inflation through personal consumption expenditures, which is a more comprehensive gauge that covers a broader range of expenses including company spending on employees.
Year-on-year, core PCE is still below the Fed’s 2% target, while core CPI has surpassed it every month since November 2015. Headline CPI has so far been contained, however, by falling food costs.