Inflation is costing US households an extra $ 175 per month, economist says
Over the past two months, Allison, wife and mother of a toddler and teenager in Chicago, said she was spending about $ 50 more each week on groceries to feed her family – and that. is in a discount supermarket chain, Aldi’s.
“I used to spend $ 70 a week, but all of a sudden this summer I noticed I couldn’t leave the store without spending at least $ 120,” said Allison, who works in the field. education.
Like millions of Americans whose incomes have not kept pace with inflation – up 5.3% in August from a year ago – Allison and her family are feeling the effects of the rising rate. cost of living and giving up some things just to make ends meet.
Her family is skimping now. “There is no more splurging like going to Home Depot to buy an extra plant or to eat out,” Allison said.
Spurred on by supply shortages and massive government spending, inflation has become an additional tax on middle-class Americans emerging from COVID lockdowns.
BACON BECOMES LAST VICTIM OF SUPPLY CHAIN DISTURBANCES, INFLATION
For households with a median annual income in the United States of around $ 70,000, the current rate of inflation has forced them to spend an additional $ 175 per month on food, fuel and shelter, according to Mark Zandi, Chief Economist at Moody’s Analytics.
“It’s the equivalent of a full grocery, electric or cell phone bill,” Zandi said.
Although government officials have called inflation “transient,” it is at its highest level in 30 years – and has been for months.
Unpredictable supply chain issues, including a record number of more than 70 freighters waiting to dock at the Port of Los Angeles, have made it difficult to predict when prices will stabilize.
To make matters worse, a shortage of truckers has exacerbated the situation and shows no signs of slowing down. Everything from wood to electronics is becoming increasingly scarce and more expensive.
Many consumer experts see no immediate relief in sight – some bracing for increased credit card debt. During the pandemic, many consumers had paid off their debts because they spent less while collecting larger unemployment checks.
But since April, credit card balances and default rates have increased after slowing down during most of the pandemic, according to Zandi. Defaults were 1.54% on September 21, compared to 1.30% on April 21.
“The price increases will continue until the middle of next year,” predicted Chuck Grom, analyst at Gordon Haskett, noting an announcement from PepsiCo this week that consumers can expect a further price increase in the market. early 2022 on company snacks and drinks.
Indeed, a 10-ounce bag of Lay’s potato chips – Frito-Lay is owned by PepsiCo – cost $ 3.75 in August, 50 cents more than a year earlier at Dollar General stores in the southwest, Grom said. .
Prices for other items also rose in the discount chain, including a dozen 12-ounce cans of Coca-Cola that cost $ 5.75 in August – 50 cents more than in 2020 – in its stores around the world. southwest, and a half-gallon of 2% store-brand milk that now costs $ 4.49, 74 cents more than a year earlier, according to Grom. At Family Dollar stores across the Northeast, the 12-pack of Coke was $ 6.90 in August, up from $ 1.50, and a can of Folger’s coffee costs 85 cents more, $ 8.80, a he discovered.
In the Big Apple, gristedes and D’Agostino’s grocery chains have increased prices by up to 15 percent on chicken wings and beef, 10 percent on milk and 5 percent on eggs, while non-food items increased by around 10 percent. , according to owner John Catsimatidis.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
In addition, some consumers report that it has become more difficult to cover their usual expenses.
The number of US households that say it is “very difficult” to pay their usual expenses has risen 8% since early August, to 26.5 million, according to the Census Bureau’s Household Pulse Survey on Oct. 6.
Allison recently reached out to a debt relief lawyer, Leslie Tayne, to help her consolidate and reduce her outstanding debt, which includes a hefty student loan.
“My business has exploded,” Tayne told the Post.