Inflation will cost U.S. households an extra $5,200 this year alone, according to a report.
Bloomberg reported the number comes out to $433 per month.
Bloomberg economists Andrew Husby and Anna Wong explained, “The excess savings built up over the pandemic, and increases in wages, will cushion those costs, and allow spending to expand at a decent pace this year.”
They added, “But accelerated depletion of savings will increase the urgency for those staying on the sidelines to join the labor force, and the resulting increase in labor supply will likely dampen wage growth.”
Inflation will mean the average U.S. household has to spend an extra $5,200 this year compared to last year for the same consumption basket, according estimates by Bloomberg Economics https://t.co/PP0yJ3i7Mx
— Bloomberg (@business) March 29, 2022
According to the researchers at the Federal Reserve Bank of San Francisco, massive government spending is to blame for the surge in inflation in the U.S., as Fox News reported.
Òscar Jordà, Celeste Liu, Fernanda Nechio and Fabián Rivera-Reyes wrote, “Fiscal support measures designed to counteract the severity of the pandemic’s economic effect may have contributed to this divergence by raising inflation about 3 percentage points by the end of 2021.”
Still, they argued, “Without these spending measures, the economy might have tipped into outright deflation and slower economic growth, the consequences of which would have been harder to manage.”
The New York Times reported Tuesday Americans are more concerned over inflation than at any moment since 1985, citing a Gallup poll.
Roughly 79% of Republicans said they were “seriously worried” about inflation while 35% of Democrats said the same.
“That reflects the ongoing phenomenon we’re seeing in polarization,” Lydia Saad, director of U.S. social research at Gallup, said.
She added, “Democrats are just going to downplay problems, just like Republicans did when Trump was in office.”
The Times noted the Biden administration expected that the spike in inflation would fade. The administration proceeded to argue “it is part of a global phenomenon and has been exacerbated by Russia’s invasion of Ukraine,” as the outlet explained.
