Inflation now causing financial pain for most Americans, survey shows
Americans responding to higher prices by pulling back on spending
Investors await key inflation data as Fed expected to raise rates again
Former president of the Kansas City Federal Reserve Thomas Hoenig joined 'Maria Bartiromo's Wall Street' to discuss whether or not the Federal Reserve will raise interest rates again to continue bringing down inflation.
The hottest inflation in four decades is inflicting financial pain on a majority of Americans as the cost of everyday necessities remains stubbornly high, according to a new survey published by Gallup.
About 56% of respondents said they are feeling the sting of price increases, up from 49% in January and 45% in November. The latest figure includes 12% of Americans who described the pain as "severe," and 44% who called it "moderate."
"With high inflation persisting for over a year, a majority of Americans now say they are experiencing financial hardship from higher prices," the survey said. "Lower-income Americans were mainly affected early on, but most middle-income Americans and a substantial minority of upper-income Americans are now feeling the strain of higher prices."
Lower-income Americans are still more likely to report severe hardship from rising prices, with 26% of those whose annual household income is less than $48,000 saying that steeper inflation is jeopardizing their standard of living. That compares with 12% of middle-income Americans and 4% of upper-income Americans.
FED RAISES INTEREST RATES BY 75 BASIS POINTS IN ANOTHER HISTORIC MOVE TO TACKLE INFLATION
A customer shops at a supermarket in Washington, D.C., the United States, on July 13, 2022. ((Photo by Ting Shen/Xinhua via Getty Images) / Getty Images)
Still, while those on the higher end of the income spectrum are less likely to say they are experiencing severe hardship from inflation, they have reported a higher degree of financial difficulty than they did one year ago. About 63% of middle-income Americans and 40% of upper-income Americans said that inflation is affecting their finances negatively – up a respective 17 and 12 percentage points from the fall.
As Americans confront sky-high prices, they are responding largely by pulling back on spending: About 24% of those experiencing hardship from inflation said they are buying less in general, or only buying essential items. Another 17% said they are traveling less or canceling vacations, and an equal amount said they are trying to cut back on driving time in order to spend less on gas.
Other common methods to cope with higher prices include: buying cheaper goods or generic brands of products (12%), eating out less (10%), buying fewer groceries or growing their own food (10%), staying home (8%) and cutting down on entertainment expenses (8%).
A man shops at a Safeway grocery store in Annapolis, Maryland, on May 16, 2022, as Americans brace for summer sticker shock as inflation continues to grow. ((Photo by Jim Watson/AFP via Getty Images) / Getty Images)
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The polls come just a few days before the release of new consumer price index data, which is expected to be another doozy: Economists surveyed by Refinitiv expect that inflation surged 8% in August on an annual basis; while that's down from June's record-high of 9.1% and July's reading of 8.5%, it remains well above pre-pandemic levels.