That’s how much more the average household pays each month because today’s inflation rate is so abnormally high, according to a new analysis.
December’s 7% inflation rate is not only the highest the country has seen since 1982, but more than triple the 2% the Federal Reserve aims for long-term. The difference, according to Ryan Sweet, an economist at Moody’s Analytics, translates to $250 a month for the average household. Sweet studied data from the Bureau of Labor Statistics’ consumer expenditure surveys program, which provides data about spending, incomes, and demographic characteristics of U.S. consumers.
Among the major expenses that have risen in the year through December, according to the bureau’s monthly inflation report released Wednesday: gasoline (up 49.6%), groceries (up 6.5%), and car payments, with the price of used cars rising 37.3% and new cars increasing 11.8%. It all adds up quickly for the typical consumer.
“That’s an enormous amount,” Sweet said.
However, he added, it’s likely we’re currently experiencing the worst of inflation. As the year goes on and the wave of COVID-19 cases from the omicron variant presumably recedes, the supply chain snarls making it hard for businesses to meet demand from consumers will abate and give suppliers a chance to catch up, resulting in slower price increases, Sweet predicted.
“Things are probably the worst right now, but better times are ahead,” he said.
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