Nearly half of U.S. adults are feeling the pain of inflation, poll says
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Nearly half of U.S. adults are feeling the pain of inflation, poll says
Almost half of Americans say rising prices have caused hardship for their families, with lower-income Americans “suffering the most,” a new Gallup survey has found.
Inflation has climbed 7% year over year, a rate that’s being felt most acutely by Americans with lower incomes.
Two-thirds of lower-income adults — those who make less than $40,000 a year — told Gallup they have experienced moderate or severe hardship due to rising prices.
Meanwhile, 56% of middle-income Americans (those making $40,000 to $99,000 a year) and 32% of upper-income Americans ($100,000 and above) said they are experiencing at least moderate hardship.
Gallup also found that about 8 in 10 Americans expect inflation to rise, a higher expectation than usual. (Between 2007 and 2020, Gallup found that 6 in 10 Americans expected inflation to increase.)
The results echo analyses from initiatives like the Penn Wharton Budget Model, which recently released a report on the impact of inflation by household income. It estimated that lower-income households spent roughly 7% more on goods and services in 2021 compared to 2019 and 2020, while higher-income households spent about 6% more.
In response to rising inflation, the Federal Reserve indicated Wednesday that it could hike interest rates in March; it would be the first time rates have risen in three years.
Lower-income groups disproportionately bear the brunt of inflation in several ways. Their wages, on average, tend to grow more slowly than people higher on the income distribution, explained James Ziliak, director of the Center for Poverty Research at the University of Kentucky.
He noted that once you adjust their wages for inflation, you see “real declines in their earning power.”
Ziliak also said that low-income families also tend to lack sufficient savings to help them during financial hardships.
“They don’t really have the cushion to buffer against kind of unexpected shocks compared to higher-income households,” Ziliak said.
While Ziliak said that early signs indicated inflation would be “relatively transitory,” the expectation is that it won’t subside this year to pre-pandemic levels.
Chrys Bowen, 56, in Helena, Montana, calculates her household’s personal inflation rate. She said their food prices have gone up between 10% and 20%, while gas prices have gone up about 35%.
She said she and her husband, Keith, 65, pull in about $25,000 a year through Social Security and various odd jobs — she writes and fills out online surveys, while her husband makes educational videos on micro-scale, hard-rock mining, among other work.
While she said the two already live a minimalist lifestyle, she may consider trying to pick up more work this year that could provide her with a passive income, like recipe writing.
“What I worry more about for us is building more in the way of savings — a slightly larger nest egg for those rainy days or if the car needs a $2,000 repair,” Bowen said.
Overall, Gallup said Americans view the economy more negatively than positively, with 67% saying it’s getting worse compared to 29% who say it’s getting better.
Jeff Jones, senior editor at Gallup, said this is despite positive economic news, like the steady decline of unemployment. The December jobs report showed that the unemployment rate hit 3.9%, which is a pandemic low and near pre-pandemic levels.
“That one thing, [inflation], is, I think, weighing a lot more in people’s minds in terms of how they evaluate the economy,” Jones said. “Inflation, obviously, is more direct.”
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