Not just gasoline: The sneakier squeeze on family budgets

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Snapshot for September 10, 2008.

Not just gasoline: The sneakier squeeze on family budgets

by L. Josh Bivens

What part of the economy has seen rapid price increases and put a real squeeze on U.S. households and businesses?

Energy, you say? True. But health care is even worse.

enlarge imageHealth insurance costs squeeze more than energy costs: Expenditures on health insurance premiums and energy goods/services

Since 2000, spending on health insurance premiums actually grew faster than spending on energy; by the first half of 2008 American consumers were paying $370 billion more for insurance premiums than in 2000. Spending for energy is a relative laggard by comparison, increasing "only" $320 billion since 2000.

Rising energy prices constitute a real drain on family budgets. Rising prices for health care, however, are also eating away at other consumption possibilities, and we shouldn't lose sight of this just because we're not given weekly reminders when we pull up to the gas pump.