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Prices in the 21st Century

The chart below, inspired by the American Enterprise Institute’s “Chart of the Century,” displays changes in wages, inflation, and the prices of consumer goods and services in Oregon since the beginning of the 21st century.

Despite wages outpacing inflation, several of the largest areas of consumer spending including housing, rent, higher education tuition, and medical care have all grown at a faster rate, thereby crowding out more and more of every dollar of spending. Given the Bureau of Labor Statistics (BLS) discontinued an Oregon specific price index in 2017, the West Region was used for several price data series.

While this chart offers no explanation of the reasons behind the variations in price growth between items, we hope it serves as a common starting point and inspires discussion and more informed questions.

 

Key Insights

Trends Over Past 20 Year

With the price of gas spiking in 2020, it remains the most expensive item relative to two decades ago. (+208%)
Home ownership costs have increased by more than 2 times the rate of inflation and the average weekly wage. Since 2002 the price of housing has increased by 190% while inflation has increased by 64% and the average weekly wage has increased by 99%.
Apparel, recreation, household furnishing, and durables remain well below total inflation rates. Durables are goods generally purchased infrequently given they are expected to last such as vehicles, appliances, and consumer electronics.

Changes in the Last Year

In the last year four items: housing, gasoline, transportation, and durables, saw their price level decline, while the 10 other items increased.
Home values decreased 2% in 2023 after rapid increases of 17% in 2021 and12% 2022. This is the first decrease in housing prices since 2012. At the same time, rent increased 7% in 2023 following a 2% increase in 2021 and a 5% increase in 2022.
 
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