Soaring inflation has driven up American household spending, CNBC reported this week, citing a Moody’s analysis of October inflation data. According to the report, households are forced to pay $433 more per month for the same goods and services than they did last year.
US consumer prices rose by 7.7% year-on-year last month, which was lower than the June peak of 9.1%, but still near a 40-year high. Since October last year, the food that people buy at work and school has almost doubled in price. Products like eggs and butter rose by more than a third, while milk, bread, and poultry increased by 15%. Transportation costs grew by 28%, while gasoline prices increased 17.5%.
Moody’s notes that wages have failed to keep up with inflation, and workers are rapidly losing purchasing power. Hourly wages dropped by an average of 2.8%, the report states.
“Despite weaker-than-expected inflation in October, households are still feeling the squeeze from rising consumer prices,” Bernard Yaros, an economist at Moody’s, was cited as saying.
The impact of inflation varies from group to group, Yaros added, noting that “younger and rural Americans, as well as those without a bachelor’s degree,” have been hurt the most.
Some financial advisers suggest that changing spending habits may help households lower expenses – for example, traveling closer to home, getting a haircut less often, going shopping for groceries with a list and seeking out discounts, etc.
“There’s no one silver bullet… It’s all those little decisions that add up at the end of the month,” Joseph Bert, the CEO of Certified Financial Group, told CNBC.
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