skip to Main Content

The Cost of Living in 2017

There may be some slivers of savings, but many costs are going up this year, from medical insurance to the price of a cup of coffee.

On top of this, while the economy has continued improving, wage increases have been relatively modest in the last few years, and are expected to remain so in 2017.

The typical raise for workers will be 3 percent, just slightly higher than 2016’s meager 2.8 percent raise, according to Aon Hewitt, a global human resources services company.



Premiums and deductibles for health insurance are going up once again, whether you receive it through your employer, or pay privately. Private insurance is seen rising an average of 25 percent and employer-provided insurance is going up between 10 percent and 24 percent, Aon Hewitt said.

Also, look for price increases in virtually all brand-name drugs, with hikes in specialty drugs driving the trend. They’re projected to increase 18.7 percent this year (after growing 18.9 percent in 2016), according to human resources firm Segal Consulting.

Still, while skyrocketing prices of specialty prescription drugs have received a lot of attention, the cost of generic drugs has quietly been falling. And some believe President-elect Donald Trump will lower the bar on generic drug approvals from the FDA, which could put more of these types of drugs on the market and further lower prices.


Expectations that the Federal Reserve will finally resume raising interest rates, combined with an economic plan from Trump that includes less regulation and lots of infrastructure spending, has economists at Deutsche Bank projecting interest rate increases.

Another bright spot could be federal taxes, with more dollars returned to wallets. The exact impact of Trump’s tax reforms is yet to be seen, but under his reported plan, almost all taxpayers will pay less this year, with the wealthiest Americans getting the biggest breaks. The top tax rate would fall from 39.6 percent to 33 percent, and the lowest tax rate would be 12 percent.


After a 6.3 percent increase over the past year, home prices are poised to go up another 5.2 percent through September 2017, according to financial analysts at CoreLogic.


Colder temperatures and higher fuel costs will raise the average homeowner’s heating bill this winter, although you’ll still be paying less than the historic norm. Analysts at the U.S. Energy Information Administration estimate the average household using heating oil will pay 38 percent more than last winter. Costs will go up 22 percent for natural gas and 5 percent for electricity, the agency projects.


It’s going to cost more to eat in and dine out in 2017, according to projections by the U.S. Department of Agriculture (USDA). The agency is expecting overall prices to go up 1.5 percent to 2.5 percent this year, led by increased costs at restaurants.

But don’t be afraid to ask where the beef is. After spiking in 2014, an increase in production has caused an oversupply of beef, putting pressure on wholesale prices, according to the USDA. Retail prices are currently down 1 percent year-over-year and are expected to fall further.

People across the globe keep guzzling more caffeine, and that demand is pushing coffee prices to all-time highs. Those prices are unlikely to fall soon, given that consumption has exceeded production for the past two years, USDA says.


And, of course, it’s going to cost more to have fun. Large parks, such as Walt Disney World and Universal Studios Hollywood, are moving toward “dynamic pricing,” which costs guests more during popular times. Recent hotel mergers also won’t be much of a friend to consumers. Prices for North American hotel rooms are projected to go up 4 percent in 2017, and the increase will be even larger on the West Coast, according to the Global Business Travel Association (GBTA).


As low gas prices and a strong economy have more people driving, the likelihood of getting into an accident has also risen, pushing up the cost of auto insurance last year by nearly 10 percent. Those factors aren’t likely to change this year, which means insurance costs should continue to rise, industry consultants say.

While low oil prices may continue to push fares down, airlines will continue to make up that revenue through increased fees, according to the GBTA. Prices for North American fares, in their entirety, are projected to rise 3.7 percent next year.

Prices for used cars in general have been going up, thanks to easy credit and the flood of relatively new cars coming on to the market as lease expirations. But there is a bright spot if your lifestyle allows it. Low gas prices have most buyers looking to purchase SUVs or larger vehicles, so small and sub-contact car prices have actually been falling. In the second quarter, used compact car prices were down 2 percent, according to Edmunds, while overall used car prices were up 2.7 percent.

Contact Us