Americans are pinching pennies amid soaring inflation

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

-Xiong Maoling, Sun Ding

WASHINGTON, July 16 (Xinhua) — Cook more, eat out less, buy a cheaper brand of salad dressing, take shorter trips, and even crash at friends’ or family’s places … These are among the ways Americans try to cut expenses amid surging inflation.

At a U.S. discount retail store Dollar Tree in Northern Virginia, John, who only gave his first name, told Xinhua that with food prices spiking, he now cooks more at home, and avoids eating out at restaurants.

“So if I was to buy a bag of chicken, it might be like 25 dollars, but if I buy like 10 pieces of chicken wings at Wingstop, it costs basically the same price,” said John, who works for the government.

Many more Americans are trying various means of saving money as the country sees the highest inflation in decades. The U.S. consumer price index (CPI) in June surged 9.1 percent from a year ago, hitting a fresh four-decade high, the Bureau of Labor Statistics reported Wednesday.

The food index rose 1 percent in June and was up 10.4 percent on a 12-month basis, the report said.

The energy index rose 7.5 percent over the month and contributed nearly half of the CPI’s jump, with the gasoline index jumping a staggering 59.9 percent over the past year. Meanwhile, average U.S. gas prices exceeded 5 dollars a gallon in mid-June for the first time in history.

In a nation on wheels, elevated gas prices are causing financial pain at the pump for millions of Americans.

Gloria Brandman, a retired teacher from New York City, hasn’t traveled by plane for a long time due to the cost.

“We’re gonna travel in the car, and we might not go as far this year because of the gas prices,” Brandman told Xinhua at a recent rally in downtown Washington D.C.

“We have an old wrecky car. We paid to have it fixed rather than try to buy a new one,” she added.

For James, a resident in Northern Virginia, higher gas prices mean that he has to pay 30 dollars more each time he fills the tank.

“I use more public transportation. I use that more often now when I can,” he told Xinhua.

Americans are also grappling with rising rents. Rents for apartments in professionally managed properties were up 12 percent nationally in the first quarter from a year earlier, with increases in several metro areas exceeding 20 percent, according to a recent Harvard University report.

Aretha Fox-Jones, who lives in Kentucky, told Xinhua that her niece had to move in with her because she didn’t have a place to stay.

“She can’t afford to live out there by herself. She worked at a grocery store, but it’s still not enough to pay rent. She’s got a son,” Fox-Jones said.

But her niece is among the luckier ones. The National Alliance to End Homelessness noted that rising rents and persistent inflation increase the risk for people becoming homeless, especially for older adults.

Headline CPI has remained over 6 percent year-on-year since October last year, and the figure has been over 8 percent since March, a stark reminder that the Federal Reserve has a long way to go to bring elevated inflation under control.

“Yesterday’s report on the consumer price index for June was a major league disappointment,” Federal Reserve Governor Christopher Waller said Thursday at the Rocky Mountain Economic Summit in Victor, Idaho.

The Fed official said he expects to raise the benchmark interest rate by 75 basis points at the policy meeting later this month, while noting that he is open to a larger rate hike depending on incoming data.

With a more aggressive Fed to quell inflation, fears of an economic recession are growing. The International Monetary Fund (IMF) said earlier this week that avoiding a recession in the United States is “becoming increasingly challenging.”

The “shockingly high consumer price inflation number does not bode well for our country’s economic outlook,” Desmond Lachman, a senior fellow at the American Enterprise Institute and former IMF official, told Xinhua.

“My expectation is that we will have a meaningful recession by the end of this year or the beginning of next year,” Lachman said.

The specter of recession has begun to rattle average Americans. Some are working longer hours to earn more, while others are going out less in order to save money.

For Victor Velasquez, a structural engineer who is about to graduate, a looming recession could hurt the job market, and he is worried he won’t be able to find a job. “Only time will tell,” he told Xinhua.

The IMF recently projected that U.S. unemployment rate will exceed 5 percent in 2024 and 2025, up from the current 3.6 percent.

With persistent inflation and growing recession fears, Americans are unhappy about the economy.

Only 37 percent of Americans said they approve of how President Joe Biden is handling his job, the lowest point of his presidency, said a survey newly released by the Pew Research Center. A majority of Americans said Biden’s policies have made economic conditions worse.

“Everyone’s blaming each other … I don’t know who can blame. Congress, president, who?” said James, a resident in Northern Virginia. “Somebody should take responsibility. Right?”