Medical-Care Hikes Nudge Inflation Figure

Plan sponsors, who have been struggling to keep some control over healthcare costs, won’t be surprised to learn that since January 2002 medical care costs have risen at an annual rate of 5%, compared to overall consumer prices that have only risen 2.5% during that period.

The medical care index rose 0.7% in July to a level 4.9% above its level a year ago.  The index for medical care commodities–prescription drugs, nonprescription drugs, and medical supplies–increased 0.4%.

The index for medical care services rose 0.7% in July. Charges for professional services rose 0.8% and those for hospital and related services increased 0.4%.

Also helping bump up July’s inflation figure were rising gasoline costs, the DoL said. Moving to the downside during the month were clothes and airfares, which helped dampen the inflation a bit, the DoL said.
 
The latest inflation reading was better than the 0.2% rise many analysts were expecting and provided fresh evidence that inflation remains under control.

In a separate report, the DoL said US workers suffered the biggest decline in inflation-adjusted average weekly earnings in nearly 12 years. The earnings decline of 0.8% reflected a 0.9% drop in average weekly hours and a 0.2% increase in the CPI for urban wage earners and clerical workers. That was partly offset by a 0.3% increase in average hourly earnings.