A new analysis from an economist at Moody’s Analytics has found that the average American household is spending an extra $296.45 per month on their normal expenses due to inflation.
Consumer prices have increased 7.9% in 2022 — the fastest rate of inflation the nation has seen in 40 years.
Inflation is impacting nearly every type of goods and service, from gas to food and rent.
Ryan Sweet, a senior economist at Moody’s Analytics, took the average spending of U.S. households in February and compared them to the amounts from 2018 and 2019 — when inflation was just about 2.1%.
“The CPI over just the past six months rose 2.5% — a staggering level of growth, with an increase of .8 in February alone before Russia invaded Ukraine. Energy rose by 3.5% in February following a 0.9% gain in each of the two prior months,” Fox Business reports.
Gas prices jumped 25 percent in February compared to the same month in 2021.
“Unfortunately, things will get worse before they get better. Higher energy prices in March are going to boost the [Consumer Price Index],” Sweet told The New York Post.
Sweet has been recognized by MarketWatch and Bloomberg LP as “among the most accurate high-frequency forecasters of U.S. economy,” according to his biography on the Moody’s Analytics website.
As Timcast previously reported, “the most volatile inflation rate in most Americans’ lifetimes is also trouble for the Federal Reserve as it seeks to achieve price stability. The nation’s central bank has signaled it will increase interest rates by a quarter percentage point this month to slow down the economic surge.”
“There is no doubt that the Federal Reserve will increase the target range for the fed funds rate later this month as higher energy prices are making the central bank’s problems even worse,” Sweet wrote in his analysis. “The Fed will respond.”