If inflation is getting the best of your wallet, you’re not alone. Average households in the US are spending almost $300 extra every month. According to experts, household costs have gone up by an extra $296.45. In part, this is due to rising food and fuel costs. Prices are expected to get even higher due to the conflict between Russia and Ukraine.
Data from the Labor Department shows that consumer prices went up by 7.9% in February alone. To compare, prices only went up by 2.1% in 2018 and 2019.
At a Glance
- Inflation is at a record all-time high.
- Russia-Ukraine conflict and supply chain issues are the main culprits.
- The federal government has a plan to slow down rising prices.
- However, experts say that “things will get worse before they get better.”
Budgets Are Being Stretched Thin
Prices are up across the board, and it’s not pretty. Many of the things that are essential for day-to-day life are quickly becoming too expensive for many US households. And these rising prices push the Consumer Price Index (CPI) up even more.
We all know the big ones: gas and food are at painfully high levels right now. National gas prices are at record highs, with gas getting alarmingly close to $4.50 for many states. The food index has also jumped by 7.9% in February. Meal staples like beef and chicken are experiencing the sharpest price increases.
President Biden has imposed sanctions on Russia. Most recently, he’s also banned all oil and gas imports from the country, So, in some aspects at least, prices will continue to rise. Food prices are also expected to keep rising due to the Russia-Ukraine conflict.
Even then, there are other categories where Americans are suffering just as much. For example, energy prices in the US jumped a whopping 25% last month. That’s compared to the same time period in 2021.
As we mentioned earlier, overall costs are taking an additional $296 from American families. Just last month, those extra costs were only adding up to $276.
Inflation Has Broken Decades-Old Record
February’s price surge has officially been marked as the highest annual rate of increase in consumer prices since 1982.
As prices increase, so does the CPI. The CPI is a metric that closely tracks inflation, mainly for goods and services. From January 2022 to February 2022, the CPI rose 0.8%. If we take out unpredictable food and energy prices, the CPI actually jumped by 6.4%. Just like inflation, that’s a four-decade high.
All of this inflation data is expected to heavily influence the Federal Reserve’s decision-making process this month. The Fed will meet in March to decide if interest rates should go up. As of now, it’s expected that the Fed will decide to raise rates. According to the New York Post, Fed Chair Jerome Powell has said that he will propose a quarter-percentage-point hike.