April 26, 2022
Workers Stress about Inflation Spike
Regular working folks can always find something about their finances to be stressed about. But today’s stress is coming from a new place: a level of inflation this country hasn’t seen in four decades.
A large majority of workers – 76 percent – identified rising prices as having a negative impact on their finances. And among households earning under $55,000, 84 percent are feeling stretched, according to the financial services website Salaryfinance.com.
Nearly half of the 3,000 workers the firm surveyed in February specifically said that inflation is stressing them out, causing anxiety, depression, or both. They said the inflation makes it tough to afford basic necessities or save money.
The stress is understandable. The consumer price index has risen 8.5 percent over the past year, and the increase isn’t just at the grocery store or the gas pump. A narrower measure of inflation that excludes food and energy is also up sharply – 6.5 percent for the year. Housing, another necessity, is driving up living costs too.
Workers got some protection from price hikes in 2021, because their wages were outpacing prices, according to the Wharton School. But those gains could disappear this year if inflation continues to accelerate.
Consumers are getting some relief from falling gas prices, which have declined for the fourth straight week, according to Gas Buddy.
But the supply chain problems that drive inflation are growing. War rages between Russia and Ukraine, which together produce more than a fourth of the world’s wheat. And economists predict that China’s lockdown to stop the spread of COVID will put more pressure on prices.
The world is an unstable place, and consumers are paying.
Squared Away writer Kim Blanton invites you to follow us on Twitter @SquaredAwayBC. To stay current on our blog, please join our free email list. You’ll receive just one email each week – with links to the two new posts for that week – when you sign up here. This blog is supported by the Center for Retirement Research at Boston College.