I stopped by the supermarket the other day for a handful of items. When I saw my total – something in the order of $ 23 – I was flabbergasted.
But really, I shouldn’t have been shocked. Inflation has been wreaking havoc on Americans’ wallets for several months, as the cost of common goods and services has only increased. And while the costs didn’t go up as much in June as they did in May, it’s still much more expensive to exist on this planet.
In June, the Producer Price Index (PPI), which measures the prices paid by businesses rather than consumers, rose 7.3% on an annual basis, up from an increase of 6 , 6% recorded in May. The 7.3% increase is the largest on record since the government began tracking annual data in 2010.
To put this 7.3% increase in context, in December the year-on-year change in the PPI was 0.8%. And although the PPI does not directly measure consumer prices, it affects them indirectly. This is because when businesses pay more for their supplies, they tend to pass these increased costs on to consumers at the retail level. This could explain why a carton of milk, a box of strawberries, and three boxes of cereal cost me $ 23 when I would normally spend less than $ 20.
One email a day could help you save thousands
Expert tips and tricks delivered straight to your inbox that could help save you thousands of dollars. Register now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to our sending you money advice as well as products and services which we believe may be of interest to you. You can unsubscribe anytime. Please read our privacy statement and terms and conditions.
What to do if life costs too much
Spending an extra $ 5 here at the grocery store and an extra $ 3 there at the gas station can easily add up, especially if you’re living paycheck to paycheck. Of course, you can’t avoid eating or refueling your car just because the prices are on the rise. But one thing you can do is have a tight budget. Go through your spending categories and if you’re worried that inflation is pushing you into debt, identify some areas to cut back.
It might also be beneficial to find yourself a side job to help keep your expenses down. Taking a few evening shifts at a local restaurant or driving a few nights a week for a rideshare service could put enough money in your pocket not only to cover your living expenses, but also to save you a bit of money. the money in a savings account so that you have a modest cushion.
How long will this surge in inflation last?
It’s hard to say when the cost of goods and services will start to drop, but one of the main reasons we are in this situation right now is that the US economy is finally starting to recover from the events of the last year and change. As such, the demand for certain commodities exceeds supply, and when this happens, prices are likely to rise.
Many supply chains were disrupted during the pandemic. But as they start to accelerate and catch up with demand, the overall cost of living should start to drop. But that may not happen for several months. So, for now, be prepared to pay extra for the various essentials that you need to function. This is not an ideal situation, but preparing for it will help you avoid a scenario where you are about to swear out loud in the middle of a crowded supermarket like I almost did the other day.