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Americans are making significant changes to their lifestyles, a new survey has found, as they struggle to keep their heads above water amid sharply rising living costs.
The Labor Department on June 10 said that the consumer-price index increased 8.6 percent in May from the same month a year ago – marking its fastest pace since December 1981.
The U.S. central bank this month raised its policy rate by three-quarters of a percentage point, its biggest hike since 1994. The Fed has increased its benchmark overnight interest rate by 150 basis points since March.
On Tuesday, a New Jersey-based financial institution, Provident Bank, published the results of a survey of 600 adults.
They found that more than 70 percent of respondents said they were changing their travel habits – a reflection of the 48.7 percent increase in the cost of gasoline, year on year, and a 37.8 percent rise in the price of air fares.
The bank said the decisions were being made due to ‘immense financial pressure’.
Passengers are seen on Wednesday at Atlanta’s airport. The cost of flights has increased almost 40 percent in a year
Motorists are facing misery at the pumps. A woman in Petaluma, California, is seen on May 17 filling up her car, at $6.29 a gallon
Almost a third of drivers – 32 percent – now spending an extra $101 – $250 per month on gasoline, with 13.5 percent reporting a monthly increase in fuel costs between $251 – $500.
Some said they were trading in their cars, switching from gas to electric vehicles. Others said they were cycling, rather than using their cars.
And others said they were postponing their vacations, and visiting family less often.
The report found that 10 percent of those surveyed said they had eliminated entirely non-essential purchases.
Americans said they were cutting back on trips to the salon, cigarettes and takeout coffee.
More than half of all those surveyed, or 53.33 percent, said they now spend between $101 and $500 more per month on groceries.
Provident Bank’s survey found that 53.33 percent said they now spend between $101 and $500 more per month on groceries
For the month of May, meat and poultry was up 14.2 percent year on year, and cereal 11.6 percent. The price of fruit and vegetables rose by 8.2 percent.
‘As bankers, it’s important that we uncover these financial pain points for consumers as it relates to inflation,’ said Anthony Labozzetta, president and CEO of Provident Bank.
‘Similar to the pandemic, it’s a time for financial institutions to step up and work with their customers on how best to help them navigate through these challenging times.’
Nearly half of the survey’s respondents – 46.33 percent – reported using credit cards slightly more or much more frequently on routine purchases, compared to last year, and 41.17 percent said they were contributing less to their savings.
Among those, 38.46 percent reported having less than $1,000 in a personal savings account.
Americans said they were using their car less, cutting down on trips to see family, and cycling more
Yet those surveyed were not wallowing in despair.
More than half – 57.83 percent – said they believe they will be better off this time next year.
U.S. Labor Department data on Thursday showed unemployment benefits rolls remained near their lowest in decades.
And a report from payroll provider UKG suggested the U.S. job market strengthened in the first half of this month – even as the Federal Reserve lifted interest rates and some economists began warning of a potential recession.
But other signs point toward softening, including high-profile layoff announcements in sectors like technology and housing.
This week, Tesla shed 200 employees working on its Autopilot driver-assistant system.
Earlier, CEO Elon Musk told managers the electric vehicle maker needed to cut staff by about 10 percent.
JPMorgan Chase started layoffs in its mortgage business.
Fed Chair Jerome Powell recently told lawmakers the current U.S. job market, with nearly two open jobs for every unemployed individual, was ‘sort of unsustainably hot.
Joe Biden has said that the inflation is temporary, caused in a large part by the pandemic and the war in Ukraine, and urged Americans not to panic.
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