Cost of inflation to American household: extra $175 a month
Category: News & Politics
Via: john-russell • 3 years ago • 7 commentsBy: Lisa Fickenscher (New York Post)
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Back to Reading October 6, 202110:44pmUpdatedOctober 7, 20218:44am
Over the past couple of months, Allison, a wife and mother of a toddler and teenager in Chicago, says she's been spending about $50 more each week on groceries to feed her family — and that's at a discount supermarket chain, Aldi's.
"I used to spend $70 a week, but all of sudden this summer, I noticed that I couldn't leave the store without spending at least $120," said Allison, who works in education.
Like millions of Americans whose income has not kept pace with inflation — up 5.3 percent in August compared with a year ago — Allison and her family are feeling the pinch of the rising cost of living and giving up some things just to make ends meet.
Her family is scrimping now. "There are no more splurges like going to Home Depot to buy an extra plant or eating out," Allison said.
Inflation has spiked in the US.
Spurred by supply shortages and massive government spending, inflation has become an added tax on middle-class Americans coming out of the COVID lockdowns.
For households earning the US median annual income of about $70,000, the current inflation rate has forced them to spend another $175 a month on food, fuel and housing, according to Mark Zandi, chief economist at Moody's Analytics.
Nam Y. Huh/AP
"That's the equivalent of a full grocery, electric or cellphone bill," Zandi said.
Although government officials have called the inflation "transitory," it's running at a 30-year high, and has been for months.
Unpredictable supply-chain issues, including a record number of more than 70 cargo ships waiting to dock at the Port of Los Angeles, have made it difficult to predict when prices will stabilize.
To make matters worse, a trucker shortage has exacerbated the situation and shows no signs of abating. Everything from wood to electronics is becoming scarcer and more expensive.
Many consumer experts do not see any immediate relief in sight — with some bracing for a surge in credit card debt. During the pandemic, many consumers had paid down debt because they were spending less while collecting larger unemployment checks.
Eugene Garcia/AP
But since April, credit card balances and delinquency rates have been ticking up after decelerating for most of the pandemic, according to Zandi. Delinquencies are 1.54 percent as of Sept. 21, compared with 1.30 percent on April 21.
"Price increases will continue until the middle of next year," predicted Gordon Haskett analyst Chuck Grom, pointing to a PepsiCo announcement this week that consumers can expect another round of price hikes in early 2022 on the company's snacks and beverages.
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.
Mark Lennihan/AP
The prices of other items have also ratcheted up at the discount chain, including a dozen 12-ounce Coca-Cola cans that cost $5.75 in August — 50 cents more than in 2020 — at its Southwest stores, and a half a gallon of 2 percent store-brand milk that now costs $4.49, 74 cents more than a year earlier, according to Grom. At Family Dollar stores in the Northeast, the 12-pack of Coke cost $6.90 in August, up $1.50, and a can of Folger's coffee costs 85 cents more, $8.80, he found.
In the Big Apple, grocery chains Gristedes and D'Agostino's have increased prices by as much as 15 percent on chicken wings and beef, 10 percent on milk and 5 percent on eggs, while non-food-related items have gone up by about 10 percent, according to owner John Catsimatidis.
What's more, some consumers are reporting that it has become more difficult to cover their usual expenses.
Mark Lennihan/AP
The number of US households that report that it is "very difficult" to pay their usual expenses has increased by 8 percent since early August, to 26.5 million, according to the Oct. 6 Census Bureau's Household Pulse Survey.
Allison recently reached out to a debt-relief attorney, Leslie Tayne, to help her consolidate and lower her outstanding debt, which includes a hefty student loan.
"My business has exploded," Tayne told The Post.
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IF that is true, that would reflect inflation of about 70% , not 5%. Obviously something other than inflation caused her to spend 50 dollars more than usual at the grocery store.
thats not 5% inflation either. That is the store raising prices to reflect either their desire for more profit or Coca Colas desire for more profit.
Even worse.
To blame all these price increases on inflation is very disingenuous. Prices always creep up, even in times when there is no inflation. The current rise in gas prices is not coming mainly from inflation, nor is the rise in rents.
The premise of the seeded article, from the right wing NY Post is disingenuous.
C'mon John.
We haven't had a sustained period of inflation over 5% like this for nearly 40 years. And it's likely to continue well into 2022. It's not disingenuous at all to blame a lot of the increases on inflation. Causes of inflation can be debated but not that higher inflation increases the cost of consumer goods. That is just a fact.
Blaming this all on price gouging is the really disingenuous stance to take from what i can see.
I didnt blame it all on price gouging. But the fact is if there was no inflation at all prices of goods would still go up every year. And the price of renting an apartment or buying a car, or going to college. These increases are not solely pinned to inflation.
I'm not sure you understand Inflation John.
Inflation is calculated use the Consumer Price Index, CPI. The CPI is a measure of average cost increase of a grouping of individual consumer goods and services related to the economy. So Inflation is simply like an overall CPI. A measure of overall cost increase of all CPI measured goods and services in the economy. A kind of summary of all the items measured by the CPI if you will.
So higher Inflation rates do mean, by definition, higher costs over time as measured by the CPI.
Claiming that rising cost are not solely pinned on inflation makes no sense at all since inflation is, by definition, a measure of average cost increase.
Lets just say many price increases are above and beyond the inflation rate. Always have been.
Not really, inflation IS a measure of those price increases.
No matter what the cause.
Glad to know the left still hasn't faced the reality of the human fuck up machine they put into office.
I will trust Mark Zandi far more than your selective math.
The inflation isn't over either. The worst is yet to come. When the Democrats pass their porkulus reconciliation bill it will cause inflation to increase even more.