Inflation could cost the average American household an extra $11,500 this year

According to new estimates from NerdWallet, Americans are set to pay an additional $11,500 this year if they want to enjoy the same standard of living they created in 2020.

EstimatePublished in August, were based on inflation and annual Expense Data from the US Bureau of Labor Statistics (BLS). Analysts at the personal finance company look at how this year will compare to 2020, when the COVID-19 pandemic began.

Analysts said 2020 was “the last full year when inflation was relatively stable.” In that year, the US inflation rate was 1.23 percent,

BLS. As of August, inflation in the United States stands at 8.3 percent, according to information,

“In all 2020, American households spent an average of $61,300,” the analysts wrote. “This number includes everything we spend our money on housing, food, entertainment, clothing, transportation and everything else.

“In 2022, this stands to reach $72,900, a difference of more than $11,500 if consumers want to maintain the same standard of living.”

NerdWallet analysts said this is an average estimate, and therefore, it is “accurate to very few people”.

“Those who earn more (and therefore spend) will see more dramatic dollar increases. Those who earn less may see less dramatic dollar jumps, but more importantly felt the effects of these rising prices.” Can go,” he wrote.

According to analysts, total monthly household spending increased by $961 from 2020, while spending on groceries grew by $101. Shelter is up $120 and household utilities increased by $70 per household, while gasoline increased by $209.

Another Fed rate hike

NerdWallet noted that spending figures for 2020 were below normal, noting that the COVID-19 pandemic restrictions meant fewer people were traveling or paying for child care and entertainment, resulting in There was an overall decline in spending.

“It is a safe assumption that people will spend less in certain categories this year as well, if for no other reason than to avoid higher prices,” the analysts wrote. “This is primarily because we think spending in 2022 will be more similar to 2020 than in 2019, for example, another year for which such spending figures were available.”

A separate analysis by Republican members of the House Joint Economic Committee estimates that inflation is now costing American households extra. $717 Each month, though it’s even higher in the states of Colorado ($937), Utah ($910), and Arizona ($833).

On an annual basis, the committee estimates that families will have to pay an additional $8,607.

federal Reserve Another 75 basis points hike approved To a target range of 3 per cent to 3.25 per cent on September 21 further indicated that a larger increase was on the way in an effort to quell red-hot inflation.

“Recent indicators point to a marginal increase in expenditure and output. Job gains have strengthened in recent months, and the unemployment rate remains low. Inflation remains high, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices and broader price pressures,” the Fed said in a statement. Statement,

Fed officials also cited Russia’s war in Ukraine to put additional pressure on inflation and add weight to global economic activity.

US President Joe Biden earlier this week insisted Interview On CBS’s “60 Minutes” that inflation “has not risen” in recent months and remains “basically even.”

katabella roberts

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Katabella Roberts is a news writer for The Epoch Times, focusing primarily on United States, world and business news.

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