Inflation has cooled for some items like gasoline and plane tickets, but costs of essentials like rent, electricity, car insurance and child care continue to rise significantly—making it harder for average American families to save.
Overall inflation is down to 3% from its peak of 9.1% according to recent Labor Department readings.
However, housing costs, which include rent, mortgage and electricity have gone up by over 10% in the past two years, adding about $400 more to a typical monthly payment. Car insurance has increased by nearly 40%.
In response to the rising cost of living and daycare expenses, several families have postponed plans to buy a bigger house.
Some families have moved to smaller houses but still face high electricity bills, leading them to cut costs on their children’s sports programs and home insurance.
Although there has been some relief in gas prices, Americans haven’t seen enough improvement to feel financially secure and are cutting back on spending in other areas.