Income is getting stretched thinner and thinner.
Despite what appears to be some progress on inflation, the Fed said in its recent policy statement that it “does not expect it will be appropriate to lower rates until it has gained greater confidence inflation is moving sustainably toward 2%.” The possibility of a rate cut is still on the table for September, however.
Prices on everything — from groceries to homes — continue to rise. Food prices were 2.2% higher in June year-over-year. In 2023, prices for fats and oils increased the fastest at 9%, followed by sugar and sweets at 8.7% and cereals and bakery products at 8.4%. Gas prices have climbed nearly 14% this year.
Meanwhile, electricity prices in the U.S. rose 3.6% over the last year, outstripping the overall inflation rate of 3.2%.
Inflation is still outpacing wage growth for many, leading to a dilemma reported on by the New York Post. With the relentless heat this summer, families are being forced to choose between keeping cool and putting food on the table. A choice no one should have to make. Here’s the start of the story:
Americans getting burned by their summer air conditioning bills are forced to cut costs elsewhere to afford it.
One in three US households trimmed grocery spending to afford their utility bills, according to new data from PowerSetter, a platform used to compare energy rates.
The company reported that 75% of the survey participants, of which there were 2,000, anticipated rising utility bills during the summer months that could “cause them financial strain.”
“Extreme heat is driving higher energy consumption. Households are more likely to turn up the AC amid the raging heat wave, which increases their energy consumption and associated expenses,” PowerSetter founder and CEO Mark Feygin told Fortune, citing inflation-induced price hikes as another cause of financial hardship.
“While many consumers are cutting back on electricity usage because they simply can’t afford the growing bills, they still might end up paying more than the year before.”