The record high inflation in the United States is disproportionately hurting lower-income families, who spend about a third of their earnings on essentials like food and energy, according to a report.
Retailers are forecasting a record holiday spending season, but prices have risen at the fastest pace in 30 years, which will dampen the Christmas spirit for one in ten Americans, according to the recent report from Bloomberg Equality.
Inflation in the US reached a 30-year high in October, which is eating into recent wage increases. The worst thing is inflation came after federal pandemic relief expired for about 7.5 million Americans.
"Inflation is especially taking a toll on lower-income families, who spend roughly a third of their earnings on essentials like food and energy. It's eating into recent wage increases, and the timing couldn't be worse after federal pandemic relief expired for about 7.5 million people," said the report.
Citing a Deloitte LLP survey which showed that over 11 percent of Americans don't plan to spend at all during the holiday spending season, the report noted, "the greatest share in at least 10 years and more than double that in 2020."
At the same time, "a majority of Americans flush with over 2 trillion US dollars in excess savings accumulated during the pandemic are ready to splurge on gifts and holiday trips," it said.
Josh Bivens, director of research for the Economic Policy Institute, said, “Anything that in the very short run puts a lot of pressure on family budgets across the board will cause more stress and damage to low-income households because they just have less scope to absorb it.”
Almost 70 percent of Americans believe the US economy is in a bad shape, according to an opinion poll which was conducted by the Washington Post and American Broadcasting Company (ABC) from November 7 to 10.
The poll shows 70 percent of the people view the economy negatively, including 38 percent who say it is in “poor” condition.
About half of Americans blame President Joe Biden for increasing inflation, and more than 60 percent say he has not accomplished much after 10 months in office.
The average price of gas in California reached 4.682 US dollars per gallon on Monday, setting a new record for the most populous US state while making it the state with the highest average gas prices in the country, according to Reuters.