WASHINGTON, D.C. (NBC) – With soaring inflation driving up prices for lots of everyday items, many Americans are simply going without things they can no longer afford.
In order to keep inflation in check the Federal Reserve has already raised interest rates with another rate hike expected this week.
Monday morning, as the economy is shrinking, so too are people’s wallets, which are being drained by everything from soaring prices for staples like milk and eggs to fuel for your car.
It’s forcing parents like Yolanda Alexander to make difficult choices. The mother of two just had a new $200 rent hike kick in. She said, “I don’t fill my gas tank up as much or put enough in to get me to where I need to be and to get back home and I don’t make as many trips as I normally would. As far as groceries? No, I don’t buy the normal amount of groceries as I normally would.”
For others, the economic crunch has forced a change of address. Paige Stryker said student loans and food are a must. So she decided to give up her apartment, instead moving into a camper on her family’s property.
“I think the future for me is really just kind of hazy,” she said. “It kind of brings me back to how I was feeling in the early days of the pandemic where we kind of just didn’t know what was going to happen.”
Many Americans are cutting out extras. Amazon’s most recent quarterly sales reflected the company’s slowest growth since 2001. And Netflix lost subscribers for the first time in more than a decade.
Still, economists say overall consumer spending is still strong. Everything from flights and family trips, to fast food.
Economist Diane Swonk said, “Domestic spending, actually accelerated in the first quarter, absent the government. That kind of resilience and that acceleration is also what helped to fuel inflation to its highest level in four decades.”
It’s a turbo-charged inflationary rate that has the Fed prepared to raise interest rates by as much a half-point this week, double the normal quarter-point increase.
Consumer prices are so scorching hot, many of the 1.7 million jobs created in the first few months of the year are actually second or third jobs, as people try and keep up with their bills.