Cost of Household Essentials

Tuition, gasoline, health care, and rent costs have all grown at a compounded rate of at least 3% per year since 2005.

Average 12-month change in cost of household essentials and nonessentials

2005-2020

Source: Bureau of Labor Statistics (BLS). Notes: Based on Consumer Price Index for all urban consumers (CPI-U). Categories marked with asterisks were classified as a “household essential” by the BLS.

Despite strong job growth, Americans remain pessimistic about the economy.¹ Many observers point to recent spikes in groceries and gasoline prices as the source of this pessimism.² But tuition, health care, and rent costs have also risen steeply since 2005, and Millennials (those born between 1981 and 1996) have faced difficult financial challenges from the moment they reached adulthood.³

Nearly a decade ago, the issue of student debt was measurably impeding the ability of young Americans to save money for future needs — with a record share of households carrying student debt (Student loan debt relief).⁴ New parents have also had to grapple with childcare costs that today are 3 times higher than in 1990.⁵ Additionally, the cost of health insurance coverage for families has quadrupled since 2000.⁶

Meanwhile, rising housing costs have prevented many Millennials from buying homes. Only 50% of those born in the 1980s achieved homeownership by the time they reached 35 years old, compared to 60% of Americans born in the 1960s.⁷ And rents have been increasing such that 1 in 4 renters nationwide has to spend the majority of their pre-tax household income on housing, limiting their ability to consider starting a family (Housing cost burden). Recent polls find that increasing numbers of Americans are simply planning not to have children or, if they are already parents, not to have any more children.⁸

1. “Inflation-weary Americans are increasingly pessimistic about the economy”. McKinsey & Company. December, 2022. https://www.mckinsey.com/featured-insights/inflation/inflation-weary-americans-are-increasingly-pessimistic-about-the-economy

2. “Economic Pessimism Persists, With Inflation Still Key Concern”. Saad. Gallup. March, 2023. https://news.gallup.com/poll/473132/economic-pessimism-persists-inflation-key-concern.aspx

3. “Information on the Economic Status of Millennial Households Compared to Previous Generations”. U.S. Government Accountability Office. December, 2019. https://www.gao.gov/products/gao-20-194

4. “Young Adults, Student Debt and Economic Well-Being”. Fry. Pew Research Center. May, 2014. https://www.pewresearch.org/social-trends/2014/05/14/young-adults-student-debt-and-economic-well-being/ 

5. “Sky-High Child Care Prices Aren’t New. But They’re Getting Worse”. Fillion. First Five Years Fund. June, 2022. https://www.ffyf.org/sky-high-child-care-prices-arent-new-but-theyre-getting-worse/

6. “2021 Employer Health Benefits Survey”. KFF. November, 2021. https://www.kff.org/report-section/ehbs-2021-section-1-cost-of-health-insurance/

7. “This is why owning a home is more difficult than ever for young people”. Paz-Pardo. World Economic Forum. January, 2022. https://www.weforum.org/agenda/2022/01/younger-generations-homeownership-housing-market-wealth-inequality/

8. “Growing share of childless adults in U.S. don’t expect to ever have children”. Brown. Pew Research Center. November, 2021. https://www.pewresearch.org/fact-tank/2021/11/19/growing-share-of-childless-adults-in-u-s-dont-expect-to-ever-have-children/