Welcome to the fourth installment of our Fourth of July Index. The annual survey performed by our firm is intended to give a real-life example of the changes in prices of a variety of grocery items needed for a typical picnic in celebration of Independence Day. We include the cost of a tank of gas to account for a round-trip between home and the picnic destination.
As shown on the link to the right, compared to last year the overall cost of this year’s picnic increased $4.22, or 3.0%, to $146.75. Excluding gasoline, the cost of the picnic increased $2.87, or 3.1%, to $95.30. Of the 21 items presented, 9 increased in price, 5 were unchanged, and 7 decreased in price.
The three items with the largest percentage price increases were charcoal at +44%, watermelon at +33%, and store-baked pies at +25%. The three items with the largest percentage price decreases were American cheese slices at -47%, potato salad at -40%, and pickle chips at -33%.
In terms of absolute impact to the bank account, the combination of charcoal, hamburger, and gasoline added a total of $5.80 to the cost of the picnic. American cheese slices, potato salad, and pickle chips subtracted a total of $4.16 from the cost. The remaining $2.58 of the overall cost increase was attributed to $1.00 price increases on several items, offset by several price decreases of less than $1.00.
The Fourth of July Index increased noticeably this year after three years of relative price stability. From June 2013 through May 2014 (June numbers aren’t out yet) the national Consumer Price Index (CPI) has increased approximately 1.8%. The food category of the CPI, however, has increased approximately 2.2%. Although the food category has seen higher inflation over the past 11 months than the total index, its 2.2% inflation rate still compares favorably to our local Fourth of July Index inflation rate of 3.1% (excluding gasoline). It will be interesting to see whether the June CPI numbers bring the national food inflation rate in line with that of the Fourth of July Index, or whether our Fourth of July Index food prices have increased more than the more diverse, nationwide basket of CPI food items.