Dive Brief:
- Rising prices for groceries, gasoline and other consumer goods have caused “widespread economic strain” for U.S. consumers regardless of their place of residence, political party, age or gender, according to findings in a survey sponsored by The Kitchen Table Project.
- Groceries are by far the leading cause of financial pressure on households, with 67% of survey respondents singling out the cost of meat and poultry as especially unaffordable, the project said, citing a survey of 1,100 registered voters by Global Strategy Group. By nearly a 4-to-1 margin, respondents said rising prices rather than stagnant wages has triggered “the cost of living crisis.”
- “Regardless of the necessity (groceries, housing, energy, healthcare), respondents are much more likely to blame corporations for price gouging and wealthy interests shaping the economy as opposed to a lack of supply due to regulations,” The Kitchen Table Project said in a press release.
Dive Insight:
The findings echo those of other surveys in May as the Iran conflict halted oil shipments through the Strait of Hormuz, pushing up the price of gasoline and crimping supply chains.
Inflation sped up in May to the fastest pace in three years, with the personal consumption expenditures index rising 0.4% and 4.1% on an annual basis, according to data released Thursday by the Bureau of Economic Analysis.
The pace of price gains for fuel and other products more than doubled the 2% inflation rate targeted by the Federal Reserve.
“Those numbers are too high,” Richmond Fed President Tom Barkin said Sunday in an interview with Bloomberg.
“It’s hard to have confidence that you’re headed back to 2% without any more influence from the fed funds rate or the labor market or some other feature that creates disinflation the other way,” Barkin said.
Prices for fuel have eased since mid-June, when the U.S. and Iran agreed on a framework for negotiating an end to the war.
The average price for a gallon of regular gasoline has fallen during the past month to $3.86 from $4.39, a 14% decline, according to AAA.
In turn, consumer sentiment this month rose from a record low, according to an index released Friday by the University of Michigan.
The index increased 10% in June, with gains spanning income levels and political affiliation, the university said. Expectations for inflation in a year edged down to 4.6% from 4.8% in May but persisted well above the 3.4% level in February before the start of the Iran war.
The survey by The Kitchen Table Project — including a 100-interview “oversample” of independents from May 5 to May 7 — found that 49% of respondents with annual incomes above $100,000 said that rising living costs have put significant pressure on their households.
“Beyond groceries, housing, gas and utility costs stand out as significant financial burdens," according to the project, which is led by Lael Brainard, a former Fed Vice Chair and top economic adviser in the Biden administration.
Respondents cited tariffs, trade restrictions and decisions by large companies to raise prices and increase profits as the top causes for higher prices, the project said, noting bipartisan support for government intervention to increase affordability.
Indeed, 65% of respondents see a “need to lower costs now — families are struggling and they need relief they can feel right away,” the project said.
