Inflation and Transportation
Inflation is when prices rise and purchasing power gets weaker over time. Inflation is driven by a number of factors and which factors have the most impact can change from month to month. This page takes a look at how transportation costs can impact inflation from the perspective of the consumer, transportation providers, and non-transportation industries purchasing transportation services.
- In the first year of the pandemic (starting around March 2020), the CPI for transportation was lower than the same month of the previous year, showing that prices faced by consumers for transportation were falling. However, since February 2021, the transportation CPI has shown steady positive growth when compared to the same month in the previous year, indicating increased prices and therefore increasing inflation.
- Vehicle ownership: Before September 2020, the CPI for used cars and trucks was lower than for new vehicles. After March 2021, the CPI for used cars and trucks rose above the CPI for new vehicles. This can be attributed to supply chain issues which slowed the production of new cars and increased the demand for used vehicles. For more information on supply chain topics, visit the BTS Supply Chain Indicators page.
- Vehicle operation: The CPI for motor vehicle insurance fell in April 2020 when COVID-19 reduced travel and then gradually increased, rising above the March 2020 level in January 2022. The CPI for gasoline likewise fell significantly in April 2020 but had been declining since December 2020. The CPI for gasoline rose 82.9 percentage points from its May 2020 low to a peak in June 2022. For more information on fuel, visit the BTS Fuel Revenue, Tax, and Price page.
- Transportation's contribution reached a high of 59% in June 2021 due to high fuel prices. Since June 2021, the contribution of transportation to inflation has remained positive but slowly decreasing.
- Fuel prices, as measured by fuel PPI, dipped below January 2019 levels in March 2020 when COVID-19 first reduced travel, but gradually rose above by the end of 2020. The price of jet fuel peaked in May 2022 and diesel fuel and gasoline peaked in June 2022.
- Since January 2019, the price of transportation equipment, as measured by the PPI for transportation equipment, has increased. The price for truck trailers, truck and bus bodies, and boats increased the most with rapid increases starting in early 2021 and continuing through 2022.
- Since 2019, industries purchasing transportation services have faced increased transportation costs, as measure by the transportations services PPI, for all types of transportation, albeit not continuously. Airline passenger services declined in March 2020, due to COVID-19, but by March 2022 surpassed pre-pandemic levels and continued to increase through early 2022. The prices for many modes began to level off or decline after June 2022.
- Transportation and related services account for a small share of price changes faced by industries purchasing services.
CPI for Overall Transportation
Consumer Price Index
Vehicle Ownership and Operating Costs
Vehicle Ownership Costs
Vehicle Operating Costs
Vehicle operating costs are represented by motor vehicle insurance, parking fees and tolls, maintenance and repair, fees, parts and equipment, tires, and gasoline.