Americans are paying more to put food on the table, fill up their cars and heat their homes — a lot more. The surging cost of such necessities will cost the typical household an extra $5,200 this year, economists say in a stark illustration of the ongoing toll of inflation.
Inflationary pressures are not expected to abate this year, leaving the average family with an additional $433 in monthly costs for the same goods and services, Bloomberg economists Andrew Husby and Anna Wong estimate. Costlier food and energy, including gasoline and home heating, account for about $2,200 of that total, they said.
The findings come on the heels of an analysis earlier this month by Moody's Analytics that found inflation to be taking anfrom the typical household budget each month. Inflation around the U.S. reached a new 40-year high in February, with consumer prices jumping — the fastest annual rate since the Reagan administration.
Not surprisingly, the percentage of Americans who believe inflation is nation's No. 1 problem is also nearing a four-decade high, a Gallup poll this week found.
"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.
Russia'shas thrown another wrench into the mix, with the conflict boosting already elevated food and energy costs and further impeding global supply chains. The price of oil has declined in recent days, but there has not yet been a commensurate drop in prices at the pump, Jeff Stein, political reporter at the Washington Post, told CBS News.
Gas prices are also unlikely to fall sharply anytime soon, with Bloomberg economists estimating the oil could hit as much as $160 a barrel later this year. The nationwide average for gas was $4.24 as of Wednesday, down 10 cents from recent record highs but still about $1.35 more than a year ago, according to AAA.
In response, the Biden administration is, from suspending federal gas taxes to further tapping the U.S. Strategic Petroleum Reserve.
"This is sort of a five-alarm fire at the White House — they are extremely intensely concerned," Stein said.
Grocery prices have also spiraled higher, hitting Americans living on a budget hardest. Theare for meat, with pork and beef up 14% to 20%, respectively, compared with a year ago. That is forcing , as more fall short after paying fixed monthly costs like mortgages or rents.
Such ballooning costs are somewhat offset by increased wages and savings compiled during the pandemic, noted Husby and Wong. Still, rapidly diminishing savings will prompt more Americans to find work, which they believe will lead to curtail wage growth as the country's labor pool expands.
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