Americans Scramble to Survive Inflation, Gas Price Spike as Experts Predict Worse to Come
01:41 GMT 05.04.2022 (Updated: 14:20 GMT 15.11.2022)
© REUTERS / ANDREW KELLY
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WASHINGTON, April 5 (Sputnik) - Elaine Anderson lives in South Florida which under normal circumstances is expensive. But in the last few months she has grown increasingly alarmed by how precipitously the price of food and other items have risen.
"I went to Publix and picked up some orange juice. Usually I have difficulty holding the carton but this time, the carton fit comfortably in my hand," Anderson told Sputnik. "I realized that the prices are going up and size is going down. I feel like it’s criminal."
Anderson, a writer and mother of two who has been taking care for her elderly mother, said conditions have made her all the more aware of the downsides of inflation and rising prices.
"It’s a bit frightening because rent and house prices are going up exponentially. People may have to downsize but how do you downsize your food?" she asked. "It’s $4.80-something for gas down here now. You can’t spend $20 in the grocery store anymore. And I don’t eat meat."
Anderson said she has noticed that a number of mom and pop stores are or have gone out of business because of escalating costs, high rents, difficulty in getting goods and related issues.
"I think about food insecurity. There are hundreds of elderly all around who are food insecure. Now they’re hit with more expensive items, smaller sizes and unavailability," Anderson said.
Since the beginning of the year, inflation has hit record levels in the United States.
25 February 2022, 23:02 GMT
According to a recent Gallup poll, about one in five Americans regard the high cost of living/inflation or fuel prices as the most important problem facing America today. Together, these two challenges account for more than 50 of the economic issues 35 percent of Americans point to as the nation's top problem.
Alton Drew, an Atlanta-based consultant and attorney, said he is struggling with "sticker shock" while adapting and adjusting to the new and unsettling economic reality.
"Well, like anybody else, it’s tough. I work via project. If there’s nothing steady coming in, I can’t save. My financial cushion is reduced," he told Sputnik. "In my field of work, people in the industry are seeing wages not increasing."
Drew, a consultant focusing on the broadband and energy sectors, said he took an evening walk some days ago and stopped at a neighborhood store.
"I recall that a pound of beef wasn’t $8/pound. All the prices have gone up. Everything is climbing," he recalled. "In Atlanta it’s about $4.50/gallon. Luckily, I don’t drive but I have a friend who carefully picks places to get cheaper gas."
Higher Prices, Inflation Equals a Tight Crunch
Just in the past year, inflation has skyrocketed to a 40-year high of almost 8 percent. In 2021, inflation factored in at a manageable 2 percent. The US Department of Agriculture calls this 7.9 percent increase, "the largest 12-month advance since July 1981."
Beef, veal, poultry, fish and seafood, eggs, dairy, fresh fruits and vegetables, cereal and bakery products have all seen prices jumps ranging from 4.3 to 16 percent in recent months. Meanwhile, some areas of the economy have seen double-digit increases. Gasoline prices have soared from about $2.87 last year to as much as $4.84 and more in 2022. Meanwhile, housing costs have increased by almost five percent.
University of Missouri Economist Linwood Tauheed said the United States could end up with "the worse possible of all worlds" as the economy struggles to recover from a devastating global pandemic, supply chain problems and now, in the past six weeks, absorbing the effects of the Russia-Ukraine conflict and the widespread sanctions imposed against Russia for invading Ukraine.
"With the war in Ukraine and sanctions, stocks of gas, oil, fertilizer and other goods are decreasing. I don’t think inflation has happened yet," Tauheed told Sputnik. "We’re going to see increases. The impact from sanctions hasn’t really hit us yet. Prices of products are going up."
Tauheed, said the United States has been on an economic roller-coaster during and since the emergence of COVID-19, buffeted by the economic disruption and downturn that caused and the ripple effects that the country is still experiencing.
"We are in a period where we’re seeing inflation from an initial cause: recovery," he said.
The pandemic came on quickly and money was put into the economy but supplies did not keep up, Tauheed added.
"People who were home because of COVID-19 saved money," he explained. "There was a decrease in supplies while people had money to spend. That caused inflation to increase."
At the same time, Tauheed said, the economy recovered to some degree "but supplies were not where they needed to be."
"There’s inflation that you would expect from a quick recovery, but then you had the supply chain crisis," he said. "Countries, particularly China, were affected. Facilities were shut down. It doesn’t necessarily explain cargo ships at the docks, though. Independent truckers weren’t able to get business. Many went out of business, others retired. So there were not enough trucks. The problem at the docks will be with us for a while."
War, Inflation and COVID-19 Hangover
JPMorgan Chairman and CEO Jamie Dimon in a recent letter to stockholders said that he is deeply concerned about the formidable tremors triggered by the twin challenges of spiraling inflation and Russia-Ukraine conflict because they pose a significant threat to this country and the world’s economic recovery.
"We are facing challenges at every turn: a pandemic, unprecedented government actions, a strong recovery after a sharp and deep global recession, a highly polarized US election, mounting inflation, a war in Ukraine and dramatic economic sanctions against Russia," he said. "While all this turmoil has serious ramifications on our company, its effect on the world… is far more important."
And with the war in Europe upending, agricultural, energy and an assortment of commodity markets, it is very likely that additional sanctions could deepen the widening instability, he added.
"The confluence of these factors may be unprecedented," he concluded.
