Inflation hits home appliance industry, consumers pay up
Major appliance prices soar more than 12% in July compared to year before, Labor Department reports
FOX Business' Lydia Hu reports on increased prices for appliances following the release of Consumer Price Index data.
Consumers are being slapped with higher prices for home appliance as input costs soar and data released by the Labor Department on Wednesday revealed prices rose in July compared to the year before.
Prices of major appliances, including refrigerators, rose 12.3% in July compared to the year before, the Labor Department reported Wednesday, noting that its consumer price index (CPI) rose 5.4% year over year last month, matching the prior month's gain as the fastest since August 2008.
According to CPI data, the price for appliances overall rose 4.9% in July compared to 2020 and laundry equipment increased by 17.9%.
"This is the first year where we had such a big dramatic change," Metin Ozkuzey, the president of Designer Appliances, an appliance store in Montclair, N.J., told FOX Business’ Lydia Hu.
Ozkuzey noted that costs for things like raw materials have increased and that "production issues" have contributed to the rise as well.
He also pointed out that the distribution of appliances has created challenges as well and now "getting a product from point A to point B is dramatically more expensive."
Hu reported on "Varney & Co." on Wednesday that manufactures are setting prices and that sellers won’t be able to offer as many promotions and discounts as a result.
CONSUMER PRICES RISE 5.4% ANNUALLY IN JULY
She noted that a General Electric stove at Designer Appliances was priced at about $1,570 last year and currently the price is more than $2,400.
FOX Business' Lauren Simonetti reports on the latest consumer price index report.
Prices rose 0.5% in July, slowing from June’s 0.9% increase, the Labor Department reported. Analysts surveyed by Refinitiv were expecting a 0.5% gain.
Core prices, which exclude food and energy, rose 0.3% month over month and 4.3% annually. In June, core prices increased 0.9% and 4.5%, respectively.
Prices for shelter, food and energy all increased in July.
The price of other durable goods, including new and used cars, also rose last month with used car prices increasing 0.2%, far less than the 10.5% spike in June. In the last report, used car price gains accounted for more than one-third of the increase.
The Federal Reserve has insisted the recent price gains are "transitory" and that those increases will mitigate once production issues are resolved.
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Fed Chairman Jerome Powell has admitted that timing is uncertain.
Hu reported that industry experts she spoke with said inflated prices for appliances will stick around for the rest of 2021 and "for a good part" of next year as manufactures continue to absorb the increased shipping costs and the higher cost of raw materials.
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FOX Business’ Jonathan Garber and Charles Brady contributed to this report.