Why Child-Care Prices Are Rising at Nearly Twice the Overall Inflation Rate

livemint.com:

While overall inflation has fallen significantly since last year, families with young children still face sharp increases in one of their biggest expenses—child care. The national average price of daycare and preschool services rose 6% in July from a year before, the Labor Department reported recently. That was nearly double the overall inflation rate of 3.2%, which was down from its recent peak of 9.1% in June last year.

Parents could see their child-care bills climb higher this fall as providers boost tuition to cover rising costs and federal pandemic aid ceases. “We don’t have many other options, so we just have to take the hit," Danielle Ganje, a mother of three living in Blaine, Minn., said of recent price hikes. Ganje, a communications director for a nonprofit organization, said she is paying about $2,500 a month for child care this summer.

That is at least 10% more than last summer and more than her monthly mortgage payment, the 36-year-old said. Her total child-care bill will decline in a few weeks when her 8-year-old and 6-year-old return to public school. But they will still require before- and after-school care, and those prices also are going up, she said.

Daycare and preschool services are among many basic household expenses still rising briskly this year, including food (up 4.9% in July from a year earlier), electricity (up 3.0%) and motor vehicle insurance (up 17.8%). Rising child-care tuition also shows how past inflation in many categories—such as wages, rent and utilities—ripples through the economy today as businesses reset their prices to catch up. Rising wages, other expenses drive up child-care tuition Many child-care providers closed permanently early in the pandemic, and child-care prices rose