As inflation rates skyrocket to levels not seen since the 1980s, the average American household is feeling the strain as the cost of goods and services continues to rise. From canceled vacations to reduced savings and a loss of purchasing power, the threat of inflation looms large, forcing families to adapt their lifestyles and brace for uncertain economic times ahead.
In these trying times, it is crucial that we allocate our attention to the threat that endangers our lifestyles. Inflation rates are currently at 8.26% and rising; the last time that America experienced such high inflation rates was in the 1980s. The economic crisis is starting to seep its effects into the average American household, as goods become more expensive and other everyday services grow in price. Consequently, many American families are starting to feel the sting of inflation as life, in general, grows more and more difficult to afford.
Middle-income families, making from $48,000-$89,999 annually, have seen an average increase of 63% in the costs of their products. Hardships for this demographic have increased by 17 points as compared to last year. The changes are still bearable, but the effects are certainly growing more apparent as everything on the shelves just seems to be more pricey. As inflation grows, the average American loses purchasing power over the lives they wish to conduct. These changes usually lead to fewer savings and a loss of services that were otherwise attainable before the effects of inflation take place. Higher-income Americans are experiencing the effects of inflation as well, up to 12 points up from last year.
Many of the causes of inflation stem from recent events like the pandemic and the Russian Invasion of Ukraine. Prices from housing, to food, to gasoline, have all increased as a result of these global problems. The ability to spend savings, long-withheld desires for goods, supply chain disruptions, and labor shortages have all contributed to the increase in inflation rates. The minimum expected wage for low-wage Americans has increased from the pandemic rate of $61,000 to $72,000 per year, but the accepted wages have still fallen from last year’s $73,000 per year.
Vacations are being canceled, essentials are becoming more difficult to buy, and spending has grown to learn a level of cautiousness. These effects are probing the savings of Americans yet again as inflation rates pose a similar effect to that of during the pandemic. However, only a few Americans are trying to solve this problem through an increase in work hours, working second jobs, accepting more generic goods, and some dangerously eating less.
The flow of the economy was as strong as a river until a dam, that is the pandemic, would prevent trickles of economic activity to go by for a few years. Now that the pandemic is nearing its end, the dam has been deteriorating and all the built-up pressure from an inactive economy has been funding the causes of inflation primarily. Economic sanctions on Russia have caused gas prices to increase severely as well, though some Americans say that gas prices are slowly returning to manageable rates.
In conclusion, the wrath of inflation rates has not yet reached its full ferocity, but it should not be ignored for the effects can easily grow worse than what they are now. A key player in returning inflation back to a more steady rate is the government, so it is important to research how the government will control and curb the economy. According to previous inflationary economies in the past, it is safe to say that the average American can expect increasing interest rates, cut costs on transportation services, and other changes to the economy by the government. With that being said, as consumers, we can organize our budgets more accordingly, earn money on our savings, and spend more cautiously on the goods we need than what we want.
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