There was a hope that the consumer price index for April might show inflation had peaked or moderated. But as the CPI rose 8.3% compared to the same month a year ago, those hopes disappeared. Now it seems inflation will almost certainly not slow until the middle of the year. And if supply chain issues worsen because of the COVID-19 outbreak in China’s two largest cities, and if the Russian invasion of Ukraine continues, the availability of key items will be further undermined, and inflation in America could actually get worse.
With the price of fuel oil, and gasoline, soaring. Americans have felt the weight of high inflation for months. Among the most widespread challenges for consumers is the price of gas, which recently hit an all time high of $4.40 per gallon, up from $2.99 per gallon a year ago. In some parts of the U.S., the price has jumped above $5.
The higher prices of meats, grains, and dairy products have raised the price of daily meals. Eating or driving, Americans are spending more to lead their everyday lives. (These are the cities with the most people on food stamps.)
The agency with the best chance to tame inflation is the Federal Reserve, but it has been pointed out time and again that it has a difficult “balancing act.” Raising rates may slow the economy. The Fed will probably raise its rate by half a percentage point four or five times this year. Higher interest rates, however, could choke the housing market and increase the rates on credit cards and auto loans. In turn, that could make the economy stall. The Fed has been widely criticized for waiting too long, but managing inflation is not an exact science.
Unemployment is low, and wages are rising. Each of those should signal a strong economy. However, inflation has outpaced wage increases for many people. This is reflected in the fact that consumer confidence is mediocre. The Consumer Conference Board’s most recent data shows that people are deeply troubled about the conflict in Ukraine … and by inflation.
To determine the household items that are soaring in price, 24/7 Wall St. reviewed data on the consumer price index for all urban consumers from the Bureau of Labor Statistics. The largest jump in items most Americans use regularly is in several types of fuel. The price of fuel oil, often used to heat houses, spiked 80% in April compared to the same months a year ago. Gas prices rose 44%. (In addition to inflation, gas taxes affect the price at the pump. These are the states with the highest gas taxes.)
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