Inflation will cost the average American household about $430 per month in lost purchasing power in 2022, according to estimates from Bloomberg Economics. That translates to $5,200 for the full year, though total losses will vary considerably at different income levels.
“The excess savings built up over the pandemic, and increases in wages, will cushion those costs, and allow spending to expand at a decent pace this year,” say Bloomberg’s Andrew Husby and Anna Wong. “But accelerated depletion of savings will increase the urgency for those staying on the sidelines to join the labor force, and the resulting increase in labor supply will likely dampen wage growth.”
Americans are certainly taking notice. A Gallup poll released Tuesday finds that inflation is seen as the most important economic problem facing the country. “Inflation began rising as a public concern last fall, after being a nonissue for Americans throughout 2020,” Gallup’s Lydia Saad writes. “It registered no more than 2% of mentions in 2021 until October, when 5% cited it. But the percentage has increased more in the past month -- seven percentage points to 17% -- than in any month since the upward trend began. This increase in concern comes as the U.S. inflation rate continues to climb, and is now at its highest point in 40 years.”
