The average American is shelling out an extra $276 a month because of the highest inflation in four decades, according to a new Moody's Analytics analysis.
Consumers are wrestling with a once-in-a-generation stick shock as the cost of everything from cars, groceries, gasoline and furniture surges.
Sweet came up with that figure by comparing prices for goods and services when inflation hit 7.5% versus how much households would have paid for those same items when inflation was 2.1%, the average in 2018 and 2019.Price increases were widespread last month: Although energy prices rose just 0.9% in January from the previous month, they're still up 27% from last year. Gasoline, on average, costs 40% than it did last year.
A separate Wells Fargo analyst showed that lower-income Americans, particularly those who are renters, are probably experiencing much higher inflation than wealthier homeowners. Middle-income households were hit the hardest by the price increase, with costs up 6.7% in December – 0.5 percentage points higher than for the lowest and highest income brackets. That's in large part because of transportation costs – middle-class households tend to spend more on gasoline than other income groups. They are also more prone to buy used cars, whereas wealthier people are more likely to purchase a new car.
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