Childcare costs continue to rise faster than overall prices

The price of childcare continues to rise faster than overall prices, even as inflation cools. The price index for preschool and kindergarten rose 5.1 percent in July compared to the same month a year earlier. Childcare costs also increased by 5.6% in 2023.

In contrast, the global consumer price index rose 2.9% in the 12 months to July and 4.1% overall in 2023.

The rising cost of childcare has been a growing source of financial stress for parents of young children, with the Labor Department describing the expense as “unaffordable for families”. In a November 2023 survey of parents by care platform Care.com, respondents said they spent an average of 24 percent of their income on childcare.

The average cost of caring for two children is now higher than the average rent in all 50 states and higher than the average mortgage payment in 45 states, according to a May report by the nonprofit Child Care Aware of America. The group recommends increasing government funding for the child care system so that states can provide more families with subsidies and increase labor income from child care.