Consumers all around the United States are forced to save their dollars and count their pennies as high inflation is putting pressure on household budgets. U.S. inflation rose another 8.3% year-over-year in April, according to the Bureau of Labor Statistics.
Food and energy—the more volatile items in the Consumer Price Index—drove rising cost of living. Especially energy, in short supply following the Russian invasion of Ukraine and ensuing sanctions, was a major culprit. Costs rose by more than 30% since April 2021 independent of the base effect, as energy prices had already reached pre-pandemic levels one year ago. Food prices also took some significant steps up, as seen in the example of shopping for hamburger ingredients.
Meats showed some of the highest price increases among food items, with the cost of ground beef rising by almost 15% since April 2021 and bacon even becoming 17.7% more pricey over the same time period. As inflation started to soar in 2021—countries were easing Covid-19 lockdowns at the time and consumers were catching up on spending, all while global supply chains still suffered pandemic disruptions—meats had already been one of the products most affected by rising costs.
Since then, price pressures have become broader, taking a hold of more spending categories, including many other foods, alcoholic drinks and rent. While the price of used cars and trucks had already skyrocketed in 2021, new vehicles have now also become 13% more expensive than they had been a year ago.
The price of tomatoes, up just 0.4% over the course of one year, shows that there are still some items that have not experienced rampant inflation. At a 6.2% price increase, fresh vegetables as a whole have seen one of the lowest rates of inflation of any food category.
Considering the high price of gas and cars, inflation is encouraging another sustainable behavior—using public transportation. The category rose by 2.7% over the past year. This is more than before the pandemic, but price hikes had mostly paused during 2020 and into 2021.
An (almost) universal struggle
Meanwhile, other developed nations are also struggling with inflation. According to the OECD, German inflation for the month of April clocked in at 7.4%, while that of the U.K. stood at 6.2% in the latest available month, March. Japan is the exception to the rule as prices only rose by 1.2% in March. The country is very adverse to price increases – they regularly make the news in Japan – and companies have been trying to avoid them even at this time of global turmoil. According to reporting by the Wall Street Journal, stratified labor markets and businesses which are saving instead of investing have had Japanese economists tear their hair out before, but the low-growth approach has proven advantageous at least in the current situation. While Japan has not joined all Western sanctions against Russia, the effect of the war in Ukraine has nevertheless become visible in Japanese consumer prices.
Charted by Statista