American consumers are already grappling with the highest inflation in four decades – a trend that has led to a decline in purchasing power and wages. But one analyst estimates that the recent rise in gas prices following the Russian invasion could lead to further economic hardship.The general household budget can add up to $ 2,000 to the annual expenditure.
The average price of a gallon of regular gasolineFor the first time since 2008. Many consumers have seen sharp rise in gas pump prices, with regular gas prices rising by 41 cents during the first full week of Russia’s war in Ukraine, according to the AAA.
According to Yardini Research in a research note on Monday, this would cost the average household an additional $ 2,000 a year in gasoline prices. Yardini said that the rise in inflation puts the grocery store at an additional cost of about $ 1,000, which means the average household will have $ 3,000 less to spend on other items this year.
Consumers are worried about the impact on their budgets – some are already planning a reduction in driving, and looking at their spending. This could jeopardize the economic recovery of epidemics, provided that personal consumption contributes about 70% to GDP. According to To the Federal Bank of St. Louis.
When local gas prices recently rose to about ً 4.25 a gallon, Vermont author Andrew Liptick said he emailed his boss if he could work from home because he had about to go to the office. The 34-mile hike – which covers mountainous terrain and thus consumes more gas – suddenly becomes more valuable.
“In the meantime, I can try not to drive too much,” said Liptik, 36. Liptak also plans to work together so that he can take a trip with his car instead of going around more than once.
But the thing that worries him the most is the cost of fuel for heating the house. “Last time it cost 500 for a full tank,” he noted. “I doubt it will be too much this time.”
On social media, users have expressed concern about the additional costs of their travel, with one commenter noting that they live from paychecks to paychecks and budgets “down”. “To be short this week, people like me are experiencing real-life consequences and no one talks about us,” he added.
Meanwhile, some taxi drivers are demanding fuel surcharges or other forms of relief as they compete for higher gas prices with the Canadian Taxi Drivers Association. Is asking Fuel surcharge for taxi travel, according to Vancouver Sun. In response to a request whether Uber could raise rates due to fuel prices, the company said Launched a service Last year it offered drivers discounts of up to 25 cents per gallon at some stations.
“[W]e will continue to monitor gas prices and listen to drivers in the coming weeks, “an Uber spokesman told CBS MoneyWatch in an email.
Inflation is causing financial distress for some consumers, according to a new survey by credit card company Capital One. It found that one in four Americans had failed to pay at least one bill in the past month, while 62 percent said they had cut spending in some way.
Overall, Americans’ sense of financial health is almost as low as it was at the onset of the epidemic, said Melissa Bearden, Capital One’s head of consumer intelligence. New research.
“Americans are feeling the effects of inflation on all income levels, and most people are already making adjustments – they’re spending more on staples,” Bairden said. “The thing that comes home to me is how much stress the American people are already facing, and how much they are preparing for the continuing stress.”
Nearly half of low- and middle-income earners – defined by Capital One as those earning less than $ 25,000 in household income and between $ 25,000 and $ 100,000, respectively – say they have recently started shopping, eating and drinking. Reduces discretionary spending on entertainment. , Research found.
David Kelly, chief global strategist at JPMorgan Funds, said pressure from the Russian invasion of Ukraine could push inflation up an inch, including gas prices and potentially higher food and fertilizer prices, which would boost food prices. Will increase prices. Monday’s research note.
“This could push CPI inflation to 8.0% year-on-year in March,” he noted.
In contrast, inflation was already high at 7.5% in January, according to the latest available data. The government will release its next inflation report on March 10, which will trace the rise in consumer prices in February.
Prices could rise beyond the domestic budget, Jordini Research predicts: “Rising commodity prices as a result of the war are likely to reduce consumer spending, which will now have to spend heavily on petrol and food.” “