Even while President Biden and top White House officials declare that the country is “making progress” as inflation has reduced recently, a growing majority of Americans feel that inflation still puts a burden on their family budgets.
A Gallup study from April 2023, which was published this week, found that 61% of respondents agreed that “recent price increases” had led to “financial hardship” both for themselves and their families. From 56 percent in August 2022, 49 percent in January 2022, and 45 percent in November 2021, the percentage of respondents who responded in the positive increased with time.
About 15% of respondents in April 2023 also said that they had experienced “severe” difficulty due to high inflation, which has a negative impact on their capacity to maintain a constant level of life. According to Gallup, “lower-income Americans continue to experience more suffering from inflation than people with higher income levels.”
Another Gallup study revealed that the “high expenses related to living” is the “most significant financial issue” that the majority of American families are now dealing with. This is in contrast to 35% of respondents who mentioned inflation, 11% who mentioned house ownership or rental prices, 9% who mentioned excessive debt, and 7% who mentioned poor salaries.
The polls took place while headline inflation continued to decrease, dropping to around 5% last month from over 9% last summer. On the other hand, price rises for essential family expenses like food and housing are still much higher than the average 5% level.
The Federal Reserve hiked the goal of the government funding rate as a part of an attempt to slow down price increases. This policy regime raises the expense of borrowing money for businesses and consumers, which decreases inflation but slows down overall economic activity. The latest inflation data coincide with this policy regime. Early this month, regulators at the Federal Reserve raised interest rates by a quarter point, extending a slowdown from earlier increases and reflecting caution as the banking industry struggles to recover from the failure of three medium-sized banks.
President Biden has in the meanwhile come under fire for repeatedly claiming that his programs, like the Inflation Reduction Act along with the Bipartisan Infrastructure Bill, are to blame for the slightly less extreme headline inflation numbers. Rates are still between three to four times greater than they were in January 2021, when he took office and more than twice the 2% benchmark that the Federal Reserve has been maintaining for decades, according to charts from last month.
In a declaration made public last month, he said, “We are winning the battle against inflation. My administration works every day to give families additional breathing space as we continue the fight against inflation,”