Inflation has overwhelmed consumers. According to the most recent Bureau of Labor Statistics consumer price index (CPI), inflation rose 8.2% in September. That continues a series of months when it has been over 8%. Americans have turned to several ways to help them cope. They may need these for many months or even years.
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The CPI increase was unexpected last year. Inflation ran barely above 2%. Supply chain issues, government stimulus and a jobless rate well under 4% helped heat up prices. The Federal Reserve has raised rates aggressively as a way to bring down these prices. So far, despite the Fed’s best efforts, the rate increases have not worked.
Many economists believe the only way to snuff out inflation is for the jobless rate to rise to above 5%, which would mute consumer activity. Inflation itself may damage business margins so that it triggers layoffs. This already has begun at a number of large companies.
The recent Americans Expect Inflation Struggles to Get Worse in 2023 report from real estate service provider Clever shows that Americans do not expect inflation to slow next year. It also shows people have begun to struggle to afford even basic costs like energy.
Specifically, the data show that four out of five Americans expect that the high inflation rate “will become a crisis.” An additional two out of five believe the current rate of inflation will not go away. That means long-term adjustments are their only hope to pay for expenses that are part of daily life and abandon those that are not.
Americans believe that inflation will hit them from several sides. These include rent, “cost of everyday goods,” housing, fuel and health care.
There are some solutions Americans believe could mitigate the inflation problem. People think if they stop eating out it will save money. The same holds true for “decreasing non-essential spending,” which is ill-defined in the study. Others plan to decrease the amount of shopping they do. Some will spend less on entertainment. The purchase of products cheaper than the ones they buy today is another way to cut costs.
Inflation worries have started to turn into a panic, and many Americans see no way out.
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