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Rising inflation: why it is hitting harder in American household

When calculating the inflation rate, economists often exclude food and energy costs. According to them, they are too volatile to be meaningful. However, for the average American coping with exploding prices, these items are virtually all they care about now. For the first time since 1981, the primary consumer costs of fuel, electricity, and food at the grocery store have all increased by double digits annually for two consecutive months. As a result, we anticipate a significant increase in expenditures in those areas that cannot be avoided. The low unemployment rate may be a point of emphasis for the Biden administration when touting the strength of the economic recovery. Still, the rising cost of living has become a topic of discussion in many households across the country. Omair Sharif, the founder of Inflation Insights LLC, says, “You normally wouldn’t see both of these things happening simultaneously.” This statement was about the rising cost of both energy and food. He said that in the past, a stretch of high inflation in a single category was likely to be an isolated event that would end in a few months. Everything is out of control right now. According to analysts, US inflation peaked in March as annual prices for consumer discretionary goods like furniture, apparel, and appliances had begun to cool down. On the other hand, with gas at around $5 per gallon and grocery prices rising at the fastest rate in over four decades, this is not the reality that most Americans live in daily. This week’s consumer price index expected an annual inflation rate of 8.2%, a slight slowdown from the previous month but more than four times the levels experienced before the pandemic. Core inflation, excluding energy and food, is expected to fall. On the other hand, food, energy, and fuel could all go the other way. If they do, it could make buying expensive things like homes and cars harder for people. It wouldn’t leave much room for households already starting to spend the money they saved during the pandemic. It’s no wonder that people in the United States have such a negative outlook on the state of the economy. “It’s quite rough,” said Anitrice Jackson, a health information specialist in Miami 59 years old and whose utility bill for May went up to $234 from $100 or less in a typical month. As a direct consequence of this, the mother of two children has decreased the amount of money she spends on seafood, and red meat, lowered the amount she pays for auto insurance and put off going to Disney World with her husband, which they had initially planned to do in August. Due to the unusually high cost of our bills, “a lot of the things we used to do, we can’t do anymore.” Despite rising natural gas prices and a limited fuel supply, residential electricity rates are expected to increase further this summer as people turn up their air conditioners. According to Barclays Plc, the average monthly electricity bill will rise by nearly half. The price of gasoline is also climbing rapidly, with pump prices in the United States reaching all-time highs almost every day. Food prices are being driven higher by various factors, including the high fertilizer cost and logistics difficulties. All of this is being exacerbated by the conflict in Ukraine. Consumers may not feel the full impact of commodity inflation until the fourth quarter or even next year, according to CTI Foods’ senior vice president of procurement and risk management, David Williams. “There will come a time when we start to see a pullback,” Williams said, “but that time is not now.” To control inflation significantly, the Federal Reserve is aggressively raising interest rates; however, this effort will not produce an immediate price reduction. As a result of the persistent increase in the cost of living, it is becoming increasingly difficult for many families to keep up with their previous level of living. A Census Bureau survey in late April and early May found that 31% of households had difficulty paying for everyday household expenses. This is up from 25% at the same time last year. The survey found that 9% of households had insufficient food regularly, up from 7% a year earlier. The difficulties are especially severe for low-income Americans in the United States because these individuals spend a more significant proportion of their income on essentials. According to the National Energy Assistance Directors, fuel and electricity costs now account for 34% of low-income households’ monthly budgets, up from 31% the year before. Mark Wolfe, executive director of NEADA, said, “The cost of energy is becoming unaffordable.” The amount consumers in the United States owe in unpaid utility bills is currently around $22 billion, almost double the $12 billion seen in a typical year. All of this occurs during a time when housing prices are also on the rise, having increased by the most significant amount since April 1991. Due to how the government tracks the data, the cost of shelter could rise even more in the second half, adding to household stress. Other CPI categories are ahead of shelter costs. This country could be in for a rough ride, Wolfe warned. “The budgets of families are being slashed. It’s almost as if they’re being taxed, but there doesn’t appear to be any way out of it.”
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Email: [email protected]
Phone: 3604642979

Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely withhelping them pursue the most comfortable financial life possible.Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.Aaron can help you and your family to create, preserve and protect your legacy.That’s making a difference.

Disclosure:
Disclosure:Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.Confidential Notice and Disclosure: Electronic mail sent over the internet is not secure and could be intercepted by a third party. For your protection, avoid sending confidential identifying information, such as account and social security numbers. Further, do not send time-sensitive, action-oriented messages, such as transaction orders, fund transfer instructions, or check stop payments, as it is our policy not to accept such items electronically. All e-mail sent to or from this address will be received or otherwise recorded by the sender’s corporate e-mail system and is subject to archival, monitoring or review by, and/or disclosure to, someone other than the recipient as permitted and required by the Securities and Exchange Commission. Please contact your advisor if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Additionally, if you change your address or fail to receive account statements from your account custodian, please contact our office at [email protected] or 800-779-4183.

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Aaron Steele

After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with helping them pursue the most comfortable financial life possible. Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career. Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community. Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School. Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age. With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion. Aaron can help you and your family to create, preserve and protect your legacy. That’s making a difference.

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