\u201cI feel anxious about inflation every time I go to the grocery store,\u201d Caroline Fitzsousa, a bar manager in Baltimore, Maryland, told VOA. \u201cAnd at work, my customers aren\u2019t happy either. The rising cost of food and liquor caused us to raise prices. People are frustrated having to pay more for the same items they\u2019ve always ordered.\u201d<\/p>\n
That frustration was felt across the United States in 2022, as global supply chain disruptions, Russia\u2019s invasion of Ukraine, stimulative U.S. fiscal policies and other factors contributed to the highest inflation levels \u2013 and the biggest price increases for many goods and services \u2013 America has seen in four decades.<\/p>\n
Inflation peaked in June when the consumer price index, a measure of the average change in the cost of goods and services compared to the year before, rose 9.1%. For October, the index was 7.7% higher, which economists saw as an improvement but still stubbornly high.<\/p>\n
The U.S. Federal Reserve aims for 2% annual inflation and has been aggressively raising interest rates in hopes of bringing it under control.<\/p>\n
For consumers and businesses alike, the impact of rising prices and falling purchasing power has been plain to see.<\/p>\n
\u201cThere are some nights that seem as busy as before the pandemic,\u201d Fitzsousa said, commenting on her bar\u2019s ability to attract customers, \u201cbut there are also plenty of patches of time when the bar is dead because people can\u2019t afford to eat and drink out as much.\u201d<\/p>\n
She added, \u201cYou hear people complaining about places being overpriced, but there\u2019s nothing we can do. If we\u2019re going to recover from the pandemic\u2019s losses and keep our doors open, this is what we have to charge. Things just cost more this year.\u201d<\/p>\n
Year of worry<\/p>\n
A November survey conducted by U.S. News &amp;amp;amp;amp;amp;amp;amp;amp; World Report and The Harris Poll reported that 86% of U.S. adults were either very or somewhat concerned about the economy and inflation.<\/p>\n
And, with the holiday shopping season under way, 41% of American consumers plan to spend less this year than they did in 2021, according to a CNBC All-America Economic Survey.<\/p>\n
\u201cIn most current polls, you\u2019ll see Americans rank higher prices and the economy as the country\u2019s biggest problem,\u201d said Robert Collins, professor of urban studies and public policy at Dillard University in New Orleans, Louisiana. \u201cIt ranks ahead of crime, border security, the environment, abortion, and everything else. The economy is top of mind.\u201d<\/p>\n
Despite it being a priority, Collins said this isn\u2019t a challenge that can be solved quickly. Inflation takes time to go down, he warns, and relief will be slow and incremental.<\/p>\n
For many Americans, such as Steve Ryan, an investor and professional poker player living in Las Vegas, Nevada, however, the need for relief is urgent.<\/p>\n
\u201cI\u2019m honestly worried about my ability to continue to afford living here,\u201d he told VOA. \u201cThe stock market stagnated and it doesn\u2019t seem like it\u2019s going to rebound any time soon, but I have to sell my shares at rock bottom prices because I need to cobble together money just to afford my rent.\u201d<\/p>\n
And that rent, unfortunately, is rising. Ryan had to leave his apartment of more than a decade because the price nearly doubled after renovations were made.<\/p>\n
\u201cI found a new place,\u201d he said, \u201cbut it definitely costs more. And I\u2019m paying for it while making less than I used to. At some point, I may just have to leave.\u201d<\/p>\n
Complicated economy<\/p>\n
\u201cIt\u2019s important to remember that the economy is very complex and very cyclical,\u201d said Collins of Dillard University. \u201cOne of the things that caused the inflation we\u2019re seeing now is the low unemployment rate most workers see as a good thing.\u201d<\/p>\n
In November, the economy added 263,000 jobs, keeping the national unemployment rate at 3.7%, which is near a half-century low.<\/p>\n
Robust job creation is usually associated with an expanding, vibrant economy. But finding workers to fill those jobs has been a challenge for many employers over the last two years.<\/p>\n
\u201cI love that workers are gaining more power,\u201d said Fitzsousa in Baltimore, \u201cbut we\u2019re having a tough time attracting the staff we need to run our business because there are less people to choose from and more jobs competing for them. As a small business our profit margins are so thin. It\u2019s hard to keep pace with the higher wages corporate restaurant groups can pay to bring in workers.\u201d<\/p>\n
As employers offer higher wages to attract workers, the increased labor costs usually are passed down to consumers in the form of higher prices.<\/p>\n
\u201cUnfortunately, the increased wages workers are receiving aren\u2019t keeping up with the inflation it’s helping to fuel,\u201d explained Patrick Button, associate professor of economics at Tulane University in New Orleans.<\/p>\n
That\u2019s been the case for Lisa Martin, a teacher in Cincinnati, Ohio, whose dream of home ownership has been put on hold.<\/p>\n
\u201cRent is so expensive and I know buying a house is a smart move,\u201d she told VOA. \u201cIt\u2019s a goal of mine, but my income isn\u2019t high enough to allow me to save for a mortgage. I\u2019m hopeful this year prices might come down a little.\u201d<\/p>\n
Looking ahead<\/p>\n
As the Federal Reserve keeps boosting interest rates, the heads of some large U.S. banks warn a recession could loom in 2023.<\/p>\n
\u201cThose things might very well derail the economy and cause this mild to hard recession that people are worried about,\u201d JPMorgan Chase &amp;amp;amp;amp;amp;amp;amp;amp; Co.\u2019s chief executive, Jamie Dimon, told CNBC earlier this week.<\/p>\n
It\u2019s a worry for millions in this country, especially Americans nearing retirement.<\/p>\n
\u201cI feel the economy has affected those of us preparing for retirement in a big way,\u201d 62-year-old Lisa Ash of Mandeville, Louisiana, told VOA. \u201cOur lifelong savings \u2013 whether in the stock market or in our savings accounts \u2013 have taken a big hit and I don\u2019t see that correcting itself in the next three years.\u201d<\/p>\n
She added, \u201cI\u2019m no longer thinking about buying another home or about traveling. I\u2019m working.\u201d<\/p>\n
For all the gloom, some financial experts have a simple message: hang in there.<\/p>\n
\u201cThroughout history the economy expands and the economy contracts; business peaks and business troughs,\u201d said Marigny deMauriac, a certified financial planner in New Orleans. \u201cIt\u2019s called a cycle because it\u2019s happened before and it will happen again. There might be some pain next year in the case of a recession, but the sooner there is pain, the sooner there will be relief.\u201d<\/p>\n<\/p>\n
Source: Voice of America<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"
\u201cI feel anxious about inflation every time I go to the grocery store,\u201d Caroline Fitzsousa, a bar manager in Baltimore, Maryland, told VOA. \u201cAnd at work, my customers aren\u2019t happy either. The rising cost of food and liquor caused us to raise prices. Peo…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"yoast_head":"\n