Americans are making big changes to how they spend their money, like taking shorter trips and driving less. Here’s how five households are dealing with the highest inflation in decades.
Americans are shocked by how much things cost.
People are upset about the rising prices of groceries, gas, and everything else. Inflation is at 8.6%, which is the fastest rate it has been in 40 years.
In May 2021, a dozen large eggs cost an average of $1.60. After a year, it was $2.80, which is a 75 percent rise. The price per pound of ground beef is up by 13%. One-fifth more for a gallon of whole milk. The Bureau of Labor Statistics says that grocery prices were 12 percent higher last month than they were a year ago. That was the most growth from one year to the next since 1979.
At the same time, the average driver was paying almost $275 a month at the pump, which was up from $167 in June 2021, when a gallon of gas cost $3.07. Rents are also going up. Realtor.com says that the median monthly rent was almost $1,850 in May, which is up 26% from 2019, before the pandemic.
By raising interest rates, the Federal Reserve is trying to stop prices from going up too fast. But this is making people afraid: If the Fed does too much, high interest rates could reduce demand so much that the economy goes into a recession. Many people are getting ready for the worst.
People all over the country are changing the way they buy things to get by. Some people are making budgets and buying things at discount stores. Others are giving up red meat and fish, walking dogs for extra cash, canceling their subscriptions to meal kits, or, like Harold Topper of Stamford, Connecticut, using psychological tricks to ease the pain.
Mr. Topper now fills up his gas tank when it gets down to a quarter tank because it only costs $25 to do so. He thinks the price is better than when the tank is half full or worse.
“After all, isn’t what you see what you get?” Mr. Topper, 66, said.
In a recent poll by the American Psychological Association, more adults chose inflation as a top source of stress than any other issue asked about in the poll’s 15-year history. Vaile Wright, a psychologist and senior director at the association, said, “You can’t turn off the news about money because you have to buy food and gas.”
How inflation has changed their lives this month. Almost 450 people wrote back. Here’s a look at how five American families have been coping with everything.
Before price increases started to hurt their budget, Amber and Mike Dowdy didn’t think too much about how much they spent. The couple lived in Muskegon, Michigan, with their two children. They took one nice trip a year, like to Universal Studios in Florida, and ate at local restaurants several times a week. Their 13- and 7-year-old kids took part in any extracurricular activity that interested them.
That changed in March, when Ms. Dowdy, a history teacher who works online, started to wonder why her checking account was getting lower and lower even though she hadn’t changed how she spent her money.
“We’ve been living well for years,” said Ms. Dowdy, whose husband is a manager at a company that makes machine tools. “Now, though, we live from paycheck to paycheck.”
By the middle of April, the couple started to slow down. Like a lot of other households, food and gas prices were the main reasons. The price of a tank of gas has gone up from about $50 a year ago to $81 now. Their food bill has gone up by 20%.
The family had planned to drive their camper to the Grand Canyon on a two-week cross-country trip this summer. But since a gallon of gas now costs more than $5, the family has decided to camp closer to home instead.