“I worry about inflation every time I go to the grocery store,” Caroline Fitzsousa, bar manager in Baltimore, Maryland, told VOA. Rising prices for goods and alcohol have caused price increases, and people are frustrated that they have to pay more for the same items they order all the time.”
In 2022, global supply chain disruptions, Russian aggression in Ukraine, stimulating US fiscal policy, and other factors will push inflation to its highest level and push prices for many goods and services to their highest levels. So in 2022, that frustration was felt across the United States. in 40 years.
Inflation peaked in June, with the Consumer Price Index (a measure of the average change in the cost of goods and services compared to the previous year) rising 9.1%. The October index rose 7.7%, which economists saw as an improvement, but remained high.
The US Federal Reserve is targeting 2% annual inflation and has aggressively raised interest rates in hopes of keeping it in check.
The impact of higher prices and lower purchasing power is clear for both consumers and businesses.
“Some nights look just as lively as they did pre-pandemic,” Fitz Sousa commented on her bar’s ability to attract customers. and drink a lot. ”
She added: If we recover from pandemic losses and keep our doors open, this is what we have to charge. ”
year of worry
A November survey by US News & World Report and The Harris Poll found that 86% of US adults reported being very or somewhat concerned about the economy and inflation.
And 41% of American consumers plan to spend less this year than in 2021 as the holiday shopping season kicks off, according to CNBC’s National Economic Survey.
“In most current polls, Americans cite rising prices and the economy as the country’s biggest problems,” said Robert Collins, professor of urban studies and public policy at Dillard University in New Orleans, Louisiana. “It ranks above crime, border security, the environment, abortion, and everything else. The economy comes first.”
Despite being a priority, Collins said it’s not a quick fix. It will take time for inflation to settle, he warned, and easing will be slow and gradual.
But for many Americans, such as Steve Ryan, an investor and professional poker player from Las Vegas, Nevada, urgent relief is needed.
“Honestly, I’m worried if I can afford to live here,” he told VOA. “The stock market is stagnant and I don’t think it will recover any time soon, but I have to sell my stocks at rock bottom because I need to put money together just to pay my rent.”
And that rent, unfortunately, is rising. Ryan had to let go of the apartment he lived in for over ten years. This is because the price has almost doubled after the renovation.
“I found a new place,” he said. And I’m paying for it with less income than I used to. At some point I may just have to leave. ”
complex economy
“It’s important to remember that the economy is very complex and cyclical,” said Collins of Dillard University. low unemployment, which some people think is a good thing.”
In November, the economy added 263,000 jobs, keeping the national unemployment rate at 3.7%. This is nearly half a century low.
Robust job creation is usually associated with an expanding and vibrant economy. But finding workers to fill these jobs has been a challenge for many employers over the past two years.
Fitzsousa of Baltimore said: As a small business, our profit margins are very thin. It’s hard to keep up with the higher wages a corporate restaurant group can pay to hire employees.
When employers offer higher wages to attract workers, the increased labor costs are usually passed on to consumers in the form of higher prices.
“Unfortunately, the wage increases workers are receiving have not kept up with the inflation it is fueling,” explained Patrick Button, an associate professor of economics at Tulane University in New Orleans.
For Lisa Martin, a teacher in Cincinnati, Ohio, her dream of owning a home is on hold.
“I think buying a house is a smart choice because the rent is so high,” she told VOA. I hope the price will come down a bit.”
looking to the future
As the Federal Reserve continues to raise interest rates, the heads of some of the largest US banks have warned that a recession could be imminent in 2023.
“There is a good chance that this could derail the economy and cause the mild to severe recession that people fear,” Jamie Dimon, chief executive of JPMorgan Chase & Co., told CNBC earlier this week. Told.
It’s a concern for millions of people in this country, especially Americans nearing retirement.
Lisa Ash, 62, of Mandeville, Louisiana, told VOA: “Whether it’s the stock market or savings accounts, our lifelong savings have taken a huge hit, and I doubt that’s going to fix it in the next three years.”
She added: I am working. “
Despite all the gloom, some financial experts have a simple message.
“Throughout history, economies expand and economies contract. Business peaks and business troughs,” says Marinie Demauriac, a certified financial planner in New Orleans. “It’s called a cycle because it’s happened before and it’s going to happen again. In the case of a recession, there may be some pain next year, but the sooner the pain, the quicker the relief.” “
