Inflation is costing Americans $445 more in spending each month

Unbridled inflation forced the average American household to pay a whopping $445 more in September for the same basket of goods and services than a year earlier, according to the latest calculations from Moody’s Analytics.

Ryan Sweet, senior economist at Moody’s Analytics, tallied the budget-wrecking sum after inflation hit 8.2% in the September CPI. While gas prices have fallen from recent highs, food and housing costs are still hovering near their highest levels in decades.

According to Jacob Channel, Senior Economic at LendingTree, in the current economic climate, many American consumers cannot afford the massive increase in the prices of everyday essentials.

“For many households, spending hundreds of extra dollars each month on the same basic necessities they’ve always bought may not be feasible, and as a result some — if they haven’t already done so — will likely have to resort to cutbacks and reducing their Living standards,” Channel told The Post.

household budgets
Americans are paying hundreds of dollars more for basic goods and services.
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“Unfortunately, in the present it is impossible for most to ignore the sting of inflation,” Channel added.

Moody’s calculated its estimate by comparing average US household spending in September to consumer spending in 2018 and 2019, when inflation was 2.1%. The Federal Reserve considers 2% inflation to be an acceptable benchmark for the economy.

The increased costs for households have even fallen slightly from their peak. As The Post reported, when inflation hit a recent high of 9.1% in June, Moody’s estimated consumers would pay an additional $493 a month for regular spending.

Sweet said September inflation “cemented” another sharp rate hike by the Fed when policymakers next meet on November 1.

“This will not go down well with the Fed, and September’s CPI is not good news for financial markets or the broader economy,” Sweet said in an Oct. 13 research note.

Rising prices have impacted all aspects of the US economy. Food prices rose 13% in September. Meanwhile, the housing index, which includes rent, rose 6.6% for the month.

According to a Morning Consult survey, grocery prices have risen so sharply that 24% of shoppers said they often bought fewer items than usual in September. Additionally, 72% of US adults said they are very concerned about food-related inflation.

To make matters worse, wage growth has consistently lagged behind inflation. Real wages, or inflation-adjusted earnings, fell 3% yoy in September.

A recent survey commissioned by Bankrate found that only a third of working Americans said their income is keeping pace with higher inflation-related spending.

“The impact of inflation on household budgets continues to intensify,” said Greg McBride, Bankrate’s chief financial analyst. “Your pay raise may have come in the early months of 2022, but your expenses have continued to increase month after month since.”

CNBC was the first to report Moody’s updated calculations.

https://nypost.com/2022/10/20/inflation-costing-americans-445-more-in-expenses-per-month/ Inflation is costing Americans $445 more in spending each month

JACLYN DIAZ

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