In February, consumer inflation rates surged by over 7.9% compared to a year ago, the most significant increase in 40 years since 1982. With the Federal Reserve expected to raise interest rates as soon as next Wednesday, economists warn that regular citizens are looking at tough times ahead.
What it means:
For the average American consumer, putting food on the table will get more challenging. It goes without saying that lower-income households stand to bear the brunt of the spike.
From airfares to fruits to vegetables and oil—even your coffee and milk for the same—will be more expensive, as already seen between January to February.
Fruit and vegetable prices are at their highest since 2021, while dairy and related product prices have not seen such price surges in over a decade.
The Russia-Ukraine conflict isn’t helping the situation either. Since the war, gasoline prices have sky-rocketed with the average price per gallon reaching $4.32 on Thursday.
How is the war related to my wallet?
The war in Ukraine has:
- Constrained its production capacity
- Has disrupted the supply chain
- Led to various sanctions on Russia, a step that has increased supply shortages
- Led to increase in commodity prices like wheat and nickel, which will pinch everyone’s pockets
While the US government is scrambling to make the best out of a bad situation, the Biden administration appears to be in a state of limbo blaming Putin’s actions against Ukraine as the root cause of rising inflation rates. A solution to the problem, however, remains elusive.
