From putting dinner on the table, gas in the car and a roof over the family’s head, it’s getting more challenging to make ends meet.
The Consumer Price Index for May rose 8.6% over the year, higher than many economists expected. It’s also a number not seen since 1981.
The Consumer Price Index, or CPI, is the U.S. labor department’s measure of the average change in price of consumer goods over time.
Inflation is hitting home and it hurts
“This was $106, and look what I got,” said Denise Salinas as she loaded a few bags of groceries into her trunk.
Last week, she said she spent more than $300 on food, and that did not even include meat.
Grocery prices rose 11.9% over last year, according to the latest CPI. That includes meats, dairy, fruits and vegetables and even dog food.
“I can’t afford anything anymore,” said another shopper. He said what pains him the most is the price of gasoline.
Gasoline prices are up a staggering 48.7% over a year ago, the data shows.
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But it’s not just food and gasoline. Taking those out of the equation, the core price index is still up 6%.
Shelter, including rent, is up 5.5%.
Trying to buy a car? Prices of new cars are up 12.6%, while used cars are up 16.1%.
Clothing is up 5%, and medical care is up 4%.
Many wages are up, particularly in lower-paying sectors. But, for many people, wages are not keeping pace with ballooning inflation.
“I’m really hoping nobody is getting paid $7.25 in this day and age,” said Joshua Salinas, referring to the federal minimum wage.
What can consumers expect to happen next?
“I think the Federal Reserve is going to be hiking up interest rates faster and to a far greater degree than what was anticipated earlier,” said David Macpherson, Ph.D., an economics professor at Trinity University.
As the Fed tries to gradually reduce inflation, he says consumers may be in for a hard landing.
“I think the odds of avoiding recession have to be low,” he said.
On Friday, President Joe Biden pledged to keep fighting against inflation while touring the Port of Los Angeles, America’s busiest port and a place that the White House said last October would be key for reducing price pressures.
“My administration is going to continue to do everything we can to lower the prices for the American people,” the president said after a decidedly bleak new report on consumer prices.
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