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New Yorkers face soaring grocery and rent prices as inflation reaches new 40-year high

Many consumers continue to spend despite inflation
Many consumers continue to spend despite inflation 02:39

NEW YORK -- Inflation in the United States has reached a new 40-year high.

Data from the Labor Department shows consumer prices rose 9.1 percent from a year ago, the fastest pace since 1981.

One New York City supermarket chain tells CBS2 it just again raised the price of eggs because the margin loss became critical. The executive says rising gas prices and labor shortages have also increased the costs of basics such as chicken, milk and spices.

Compared to a year ago, prices at the grocery store saw the largest increase since 1979.

Shoppers told CBS2's Dick Brennan they're trying to cut every corner.

"You've got to save every little penny right now," West Side resident Kevin Salazar said.

Food prices were up 12.2 percent since last year.

"I try to buy a little bit at a time because I can't buy everything at the same time," West Side resident Anna Gonzalez said.

When it's not inflation, it's "shrink-flation." For example, some Life cereal boxes got taller but lost 2.5 ounces, and some Charmin toilet paper packages may look the same, but says they lost 30 sheets.

"They know consumers will notice a direct price increase, but they won't notice if the product gets a little bit smaller," said Edgar Dworsky, with

Watch Lisa Rozner's report

Inflation reaches new 40-year high 02:27

Record-high inflation is also exacerbating New York City's hunger crisis. City Harvest says there are 36 percent more food insecure residents than before the pandemic.

A recent study from UC San Diego found minority households are being hit especially hard because they spend a larger portion of their income on essentials like housing, electricity, transportation and food.

"These same communities are trying to balance the cost of rising food prices with the cost of rent and child care, transportation and medical expenses. So it's certainly something that we're paying close attention to," said Jerome Nathaniel, director of policy and government relations for City Harvest.

City Harvest says it recently surveyed clients of its community partners, and 9 out of 10 say they expect to rely on pantries more this year exclusively because of inflation. So far this year, the nonprofit has rescued tens of millions of pounds of meat and produce to serve nearly 400 pantries and soup kitchens across NYC.

RELATED STORY: Rising inflation doing a number on already-struggling Tri-State Area restaurants

A look inside the numbers shows the cost of rent rose at a rate not seen since 1991.

Bill Kowalczuk is a broker in New York City and expects people who stay in the area will move to a smaller space for the same amount of money.

"I've been seeing 20 and 30 percent rent increases. So if someone can no longer afford that rent, then they need to move," he told CBS2's Lisa Rozner.

Amanda Morrow is getting priced out of her two-bedroom Manhattan apartment.

"We received the letter, the dreaded letter, saying that our rent was going to be going up 52 percent," she said.

Gas soared 59.9 percent in June compared to 2021. The cost of gas is declining, however. AAA says prices are down almost 40 cents a gallon in the past month, slowly dropping 28 days in a row, the longest stretch since the pandemic hit.

According to AAA, the national average for a gallon of regular gas is at $4.63. It's $4.77 in New York, $4.68 in New Jersey and $4.60 in Connecticut.

Gas prices drop for 28 straight days 00:27

While it may be easier on drivers' wallets, experts say it could actually be a sign the U.S. is headed for a recession.

"That's another signal. Gas prices drop during a recession because demand drops during a recession. People are traveling less," financial policy expert Michelle Bond said.

"It really impacts lower household incomes much more dramatically than anyone else," said CBS News business analyst Jill Schlesinger.

But inflation has not stopped consumer spending.

"I'm seeing regardless of the price tag ... Recession-proof travel is here, and people are ready to go and ready to spend," travel agent Latasha Griffin said.

She calls 2022 the year of revenge travel.

"We have people that are ready to do their bucket-list trips, people that are ready to do all the milestone birthday trips," Griffin said. "The grandparents are ready to take the entire family out."

So what's next? Experts say this economy is unlike any we've seen before.

"People's discretionary income is increased during this period of time, which is unprecedented. You don't go into a recession along at the same time that you see people's wages rising or stay at a high rate," said David Lewis, with

The Federal Reserve Board meets July 26 and 27 and is expected to discuss interest rates at that time.

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