SouthernWorldwide.com – A recent CBS News poll reveals that a significant majority of Americans, approximately three-quarters, feel their income is not keeping pace with the rising cost of living.
This sentiment is supported by recent economic indicators. In April, the annual inflation rate in the U.S. stood at 3.8%, while wages saw an increase of only 3.6%. This marks the first instance since 2023 where the cost of consumer goods has outstripped wage growth.
The feeling of economic decline, exacerbated by soaring gasoline prices, is intensifying the financial pressures on many households. The poll found that 76% of respondents expressed concern about their personal financial situations.
Furthermore, the survey, conducted between May 13th and 15th, indicated that 64% of those polled described the current state of the economy as either “very bad” or “fairly bad.”
“People are observing price increases across the board, and their money doesn’t stretch as far as it used to,” Angela Hanks, formerly with the Department of Labor and now chief of policy programs at The Century Foundation, a progressive think tank, commented to CBS News.
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Labor data released last week indicated that surging energy prices were responsible for 40% of the inflation increase observed in April. On a year-over-year basis, gasoline prices saw a jump of over 28% last month.
Economists also point to increased U.S. tariffs on imported goods as a contributing factor to the recent inflationary surge.
“In the short term, elevated energy prices will contribute to higher overall inflation,” stated former Federal Reserve Chair Jerome Powell during his final press conference as head of the central bank on April 29th. “Beyond that, the extent and duration of potential economic impacts remain uncertain, as does the future trajectory of the conflict itself.”
Hanks noted that higher fuel costs are beginning to affect the prices of certain consumer products.
“Individuals are spending more on gas for their commutes, and this is reflected in how companies are factoring their costs into consumer prices as well,” she explained. “All these elements collectively create greater obstacles, making it more challenging for businesses to hire and for the labor market to sustain its momentum.”
Consumers Bearing the Burden
Some economists find it difficult to forecast when inflation might subside due to the ongoing uncertainty surrounding the Iran war.
“There appears to be no discernible progress in resolving the conflict in the Middle East, tariffs continue to impose significant burdens on consumers and businesses, and reductions in [food stamps] and healthcare services are making life more difficult for the average household,” Gbenga Ajilore, chief economist at the Center on Budget and Policy Priorities, a nonpartisan think tank, stated in a release to CBS News.
While consumer spending, which constitutes approximately two-thirds of economic activity, has remained relatively robust this year, Ajilore expressed concern that this situation could change rapidly.
“Eventually, a significant portion of consumers, not solely those with lower incomes, will likely reduce their spending. This, in turn, will lead to a slowdown in economic growth,” he predicted.
Alain Sherter
