Average Cost of Inflation to American Households This Year? $5,200
Prices on everything from rent and food to gasoline and used cars have risen significantly in the last year.
High inflation is affecting most American families.
The surging costs of everything from food and rent to gas and used cars have a tangible price tag attached to them. According to Bloomberg economists Andrew Husby and Anna Wong, they estimate that such necessities will cost the typical American household an extra $5,200 this year. That comes out to an eye-opening $433 in extra monthly costs.
“Accelerated depletion of savings will increase the urgency for those staying on the sidelines to join the labor force, and the resulting increase in labor supply will likely dampen wage growth,” the economists said.
‘Going to Get Worse’
Bloomberg’s analysis supports the findings of Moody's Analytics earlier this month. It noted that spiraling inflation—at nearly 8 percent year-over-year—is costing the typical U.S. household an additional $296 per month. Even more concerning is the fact that the research firm stated in the report that “it’s going to get worse before it gets better.”
“U.S. inflation is at its highest level in about four decades,” Moody’s researchers wrote. “Much of the inflation has been caused by pandemic-generated supply constraints, although Russia's invasion of Ukraine is creating additional constraints that will push inflation higher and for longer than thought before the assault began.”
Focus on Energy, Food
In recent weeks, much of the inflation talk has centered around fast-rising energy and food prices.
“The prices that people notice the most are often energy and food. You fill up every week, and you go to the grocery store every week and there are inflationary pressures there still,” Paul Ashworth, chief North America economist at Capital Economics, told CBS News.
In the aftermath of Russia’s invasion—which pushed the Biden administration and the United Kingdom to ban Russia’s oil exports—average gas prices have soared to over $4 per gallon, with some California counties even seeing $6 per gallon. According to AAA, gas prices were about 60 cents cheaper compared to just a month ago.
As for surging food prices, Americans received more bad news this week when the U.S. Department of Agriculture released an update to its Food Price Outlook for 2022, which showed that “all food prices are now predicted to increase between 4.5 and 5.5 percent.”
Food prices had already climbed 7.9 percent over the past year—“the largest 12-month advance since July 1981,” according to the department’s report. Restaurant menu items, which have already risen nearly 7 percent year-over-year, are now expected to increase between 5.5 and 6.5 percent.
Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.
Image: Reuters.