The “Morning with Maria” panel discusses the U.S. economy and markets after January’s CPI of 3.1% year-over-year.
Inflation may be slowing down, but the average American is still spending a lot of money on everyday necessities.
The typical American household had to pay $213 more per month in January to buy the same goods and services as they did a year ago. Inflation remains highaccording to new calculations from Moody’s Analytics Chief Economist Mark Zandi.
Americans are paying That’s an average increase of $605 per month compared to the same period two years ago, and $1,019 more than three years ago, before the inflation crisis began.
The analysis shows that while inflation has fallen from its peak in mid-2022, many households have yet to experience any real relief.
More Americans looking to re-enter the workforce to offset the blow of high inflation
“Inflation is generally moving in the right direction…but it’s important to remember that lower inflation doesn’t mean lower prices for most things,” said Lisa Sturtevant, chief economist at Bright MLS. It’s important.” “Rather, this simply means that prices are rising more slowly. Consumers are still feeling the pinch of rising prices for the things they buy most often.”
The Labor Department said Tuesday that the consumer price index, which measures the price of daily necessities including gasoline, food and rent, rose 0.3% in January from the previous month. Prices increased by 3.1% compared to the same period last year. Both figures beat the 0.2% month-on-month increase expected by Refinitiv economists and the composite estimate of 2.9% growth.
However, compared to the previous month, January 2021, the inflation crisis has begunthe price still continues to increase by a staggering 17.97%.
Inflation is putting severe economic pressure on most American households, forcing them to pay for everyday necessities like food and rent. That burden falls disproportionately on low-income Americans, whose paychecks are already tight and are highly exposed to price fluctuations.
People shop at a hardware store in Brooklyn, New York City, January 25, 2024. (Photo by Spencer Pratt/Getty Images/Getty Images)
of consumer price index remains far above typical pre-pandemic prices, and the cost of necessities such as food, gasoline, rent and child care remains much more expensive than just a year ago.
The biggest driver of inflation last month was housing costs. Rent increased by 0.6% in the same month, and by 6.1% compared to the same period last year. The reason why rent increases are a concern is that Rising housing costs It has the most direct and severe impact on household finances.
As high inflation weighs down Americans, 401(K) withdrawals from those in need surge.
Other price increases continued in January. grocery prices, a visceral reminder of inflation for many Americans, rose 0.4% for the month overall. Grocery costs also rose 0.4% last month, up 1.2% from the same period last year.
Health and auto insurance prices also soared in January, rising 1.4% for the month overall. Compared to a year ago, the price of car insurance has increased by 20.6%.
“Overall inflation continues to decline, but the decline in core inflation essentially stopped last month, primarily due to shelter prices,” said Robert Frick, business economist at Navy Federal Credit Union. “While other service costs remain strong, food price increases have been particularly painful. Breaking through the 3% level has proven harder than expected.”
A customer buys meat at a Safeway in San Rafael, California, on April 12, 2023. (Justin Sullivan/Getty Images)
As spending on everyday items increases, Americans are on fire More and more people are dipping into their savings and turning to credit cards to cover basic expenses.
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Credit card debt soared to an all-time high at the end of December, according to recent data from the New York Fed.
During the three months from October to December, Total credit card debt Revenue reached $1.13 trillion, an increase of $50 billion, or 4.6%, from the previous quarter, according to the report. This is the highest level on record in Fed data dating back to 2003, and the 10th consecutive year of increase.
