US consumers are continuing to pay a lot more for everything and there is no letup in sight.
Inflation remains at 40-year highs with today’s report showing an 8.6% increase over the last year.
Dan Varroney, Chief Executive Officer of Potomac Core Association Consulting and author of Reimagining Industry Growth , has provided his expert insights on the latest Consumer Price Index.
“Consumers heading out for summer vacation are going to be hit with higher prices at the pump (+48.7%), restaurants (+7.4%) and airfares (+18%).
The Consumer Price Index is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for physicians’ and dentists’ services, drugs, and the other goods and services that people buy for day-to-day living. Prices are collected in 87 urban areas across the country from about 6,000 housing units and approximately 24,000 retail establishments – department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments.
Varroney continued: “Food is going to cost even more (+10.1) and the cost of energy to cool homes who use electricity this summer season is going to be more expensive (+12%). In terms of food, meat, poultry, fish, and eggs are going to cost a lot more (+14.2%). Unfortunately, next week’s Producer Price numbers will foreshadow more increases in input costs that will lead to more inflation.
“Making matters worse, workers are not keeping pace with inflation. Average hourly earnings over the last 12 months increased just 5.2%, and with inflation at 8.6% workers will have an even more difficult time making ends meet.
“Talk of a recession in the U.S. Economy is real. With first quarter contraction, higher costs for consumers, and likelihood of more increases in discount rates by the Federal Reserve, a recession is increasingly likely later this year or early in 2023.
“Make no mistake about it a cruel summer awaits all consumers.”
