In the wake of a 40-year inflation high, the average American family is now shelling out an extra $11,434 annually just to keep their heads above water. This figure, a stark reminder of the financial strain many continue to endure, comes despite a receding inflation rate and a seemingly robust economy.
The analysis, conducted by Republican members of the U.S. Senate Joint Economic Committee, paints a picture of a nation where the cost of living is outpacing income growth. The main culprits? Food, transportation, housing, and energy, which together account for almost 80 cents of every additional dollar spent.
Despite the economy’s bright spots, including stronger wage gains and a two-decade low jobless rate, many Americans are still feeling the pinch. A recent Bankrate survey found that 60% of working Americans believe their income has lagged behind inflation over the past year.
The pandemic has played a significant role in this inflation surge, with spending bills signed by both Presidents Donald Trump and Joe Biden pumping stimulus money into the economy. Add to that global supply-chain disruptions and labor shortages, and you’ve got a recipe for rising costs.
The state feeling the most heat? Colorado, where households must cough up an extra $15,000 per year to maintain their 2021 standard of living. On the other end of the spectrum, Arkansas residents need to spend the least, around $8,500 annually.
While inflation is cooling, with October’s prices rising 3.2% on an annual basis, consumers are still feeling the burn. Fast-food prices, for instance, have soared, with Big Macs now costing 10% more than in December 2020.
As we navigate these choppy economic waters, it’s clear that the cost of living is a growing concern for many Americans. As we look to the future, the question remains: how can we ensure that our incomes keep pace with the rising tide of inflation?
Read more at CBS News.