U.S. inflation is not 0%, but it is fairly near, up only 1.9% in January. A recovery of the sort America has gone through since the bottom of the Great Recession is supposed to cause inflation. It has not. The prices of a few things that most Americans use are actually down over the past year. These are led by the prices of eight commodities.
Most things Americans buy have prices based on a handful of commodities. This is true of the materials used to make houses, household appliances and cars. Food prices are almost exclusively driven by commodities prices. So is the price of the gas and oil most U.S. households use.
1. Energy prices are among the largest contributors to the lowest inflation rates experienced in decades. The prices of most crude oils fell about 15% last year. This included the two major measures of oil prices, Brent, which was down 14%, and West Texas Intermediate, which was down 19%. Oil and gas prices rely almost completely on these. This is why diesel was down 10% last year and gas by 25%. Oil prices also knocked down the price of home heating.
2. The Metals Price Index was down 14% last year. This includes the ore that goes into steel. Steel is a major component of the building of cars, homes and appliances. Aluminum prices were down 16%. Lead prices were down 22%. Copper was down 16%, and zinc prices were down 23%.
3. Coffee and tea prices dropped last year. Robusta coffee was down 12%. Tea was down 23%. The average coffee drinker in the United States drinks 3.2 cups a day.
4. The price of oranges dropped 15%. Orange juice is usually measured as the most popular morning drink after coffee and milk.
5. Coconut oil, used primarily in cooking, posted a drop of 45%. Palm kernel oil prices were down 40%. Soybean oil prices were down 14%.
6. The prices of many agricultural products measured by the Commodity Agricultural Raw Materials Index were down 4% last year.
7. Sugar prices were down 10%. Sugar is used for food as diverse as fast food and the most expensive chocolate.
8. Cotton prices were down 9%. Cotton is widely used in clothing and household goods.
What consumers pay for goods this year will be due to the prices of these same things. So far, most price changes have been muted. It could be another year without inflation.