Inflation Rises to 3.8% Making Life More Unaffordable for Families
Inflation skyrocketed in April to the highest rate in three years as the Iran war caused oil shortages and increased energy prices worldwide.
The cost of goods and services rose 3.8% in April, compared to a year earlier, the U.S. Bureau of Labor Statistics (BLS) reported on Tuesday. The cost of energy rose 3.8% in the month of April, following a 10.9% surge in March.
The nearly 15% rise in the cost of energy over the past two months accounts for over 40% of the total increase in inflation.
Americans currently pay around $4.50 for a gallon of regular gasoline, The Wall Street Journal reports, up over 50% since the beginning of the joint U.S.-Israeli operation against Iran in late February.
The BLS reported year-over-year increases in the following categories:
- Food rose 3.2%.
- Fruits and vegetables increased 6.1%.
- Energy rose 17.9%.
- Gasoline rose 28.4%.
- Electricity rose 6.1%.
- Shelter increased 3.3%.
- Airline fares shot up 20.7%.
CNBC reported other items have increased over the past year:
- Ground beef is up 14.5%.
- Tomatoes shot up 39.7%.
- Coffee prices rose 18.5%.
- Jewelry is up 16.1%.
- Delivery services are up 13.6%.
These increases add to the extraordinary level of inflation Americans saw in the wake of the coronavirus pandemic, when the annual inflation rate hit a four-decade high of 9.1%.
“The American economy has entered a new chapter where inflation appears to have stepped up,” Joseph Brusuelas, chief economist at RSM, told The Wall Street Journal, predicting even greater inflation later this year. “Median American families are going to find it very challenging to adjust going into the second half of the year.”
Given the increase in cost for many items families rely on, even after the extraordinary cost increases experienced in previous years, it’s no wonder so many Americans are sour on the state of the economy.
Higher gas prices and worries about affordability led consumer sentiment to reach a record low in May, with a record number of Americans expressing negative feelings about the economy.
Additionally, Gallup found the number of Americans who say their financial situation is getting worse is higher than at any point in the last 25 years – including the Great Recession of 2008. According to Gallup, 31% of Americans say the high cost of living is the most important financial problem facing their family today.
However, the economic news isn’t all bad. Unemployment remains low at 4.3%, the BLS reports, with the economy adding 115,000 jobs in April. And the stock market continues to reach all-time highs, with the Dow Jones Industrial Average just slightly below 50,000.
Nevertheless, many families today find themselves financially stretched and their budgets needing trimmed. According to a 2018 survey by Ramsey Solutions, money is the number one issue couples fight about. Money fights and money problems are the second leading cause of divorce, behind infidelity.
The survey also found:
- Nearly two-thirds of all marriages start off in debt.
- One-third of people who say they argued with their spouse about money also knowingly hid a purchase from their spouse.
- Ninety-four percent of people who say they have a “great” marriage discuss their money dreams with their spouse, compared to the 45% who say their marriage is “okay” or “in crisis.”
The Daily Citizen asked Geremy Keeton, Licensed Marriage and Family Therapist and Senior Director of Counseling at Focus on the Family, about how couples can be proactive when facing financial troubles.
“Financial coordination and problem-solving as a married couple never happen with passivity,” Keeton said. “There needs to be intentionality and planning; it’s a skill, and sometimes couples need to get creative about how to draw upon each of their unique strengths in navigating a joint and structured plan.”
“More importantly,” Keeton stressed, “it’s key to realize that finances are often a symptom [or outgrowth] of couple communication, power dynamics, emotional engagement and even spiritual commitments in the relationship.”
He added:
To speak with a family help specialist or request resources, please call us at 1-800-A-FAMILY (232-6459).
Related articles and resources:
Counseling Consultation & Referrals
Being Wise With Your Money During a Crisis
Healthy Budgeting Habits for Your Marriage
When Your Money and Marriage Clash
Getting on the Same Page Financially in Marriage
Getting a Reluctant Spouse Onboard with Budgeting
Money Talk: The ‘You’ in ‘Unity’ is Silent
The Total Money Makeover Updated and Expanded: A Proven Plan for Financial Peace
U.S. Economy Shrinks in First Quarter: Here’s How Families Should Respond
President Trump Imposes ‘Liberation Day’ Tariffs: How Families Should Respond
Photo from Getty Images.
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