ST. PETERSBURG, Fla. (NewsNation) — Prices rose 3.4% year-over-year in April, according to the latest Consumer Price Index report. It’s slightly lower than March, but still above the 2% target.
Even though inflation has fallen since its peak of 9.1% in June of 2022, Americans are still grappling with everyday costs.
From the grocery store to the gas station, budgets are getting tighter across America as the inflation cooldown in 2023 appears to have stalled in 2024.
Grocery prices fell 0.2% from last month, providing some relief but still up 1.1% from 2023. Shelter, like rent, is up 5.5% year-over-year and car insurance rates are still rising but at a slower pace than last month.
Americans could potentially see the Federal Reserve delay some of those rate cuts people have been hoping for.
Trying to keep up with everyday costs
Americans have witnessed quite a spike in everyday costs from pre-pandemic levels. It now costs around $976 per month to feed a family of four, which is up 49% from pre-2020.
Apartment rental prices and the cost of buying a new car are both 25% higher than they were before COVID-19. But it’s at the grocery store where Americans say they’re feeling the most pressure.
“We’re just feeling the pinch because previously $100 used to get you a lot of groceries and now it doesn’t and your bags are less full than before,” one shopper told NewsNation.
Grocery costs outpace inflation
Some common grocery list mainstays have dropped in price over the last year. Eggs are down nearly 7%, seafood dropped 3% and the price of milk is slightly down from 2023.
Ground beef and lettuce are up, but the cost of a loaf of bread has stayed the same. Still, grocery prices jumped 25% over the past four years, outpacing inflation.
If it feels like your grocery bill has ballooned more so than anything else since the pandemic started, you’re not wrong. Aaron Cirksena, who studied economics at Maryland and founded MDRN Capital, told NewsNation that grocery prices have risen more than any other inflationary measure since 2021.
“It’s partly because of what goes into actually manufacturing the groceries and getting them to where you and I end up buying them in the store,” Cirksena said. “You need fertilizer to grow things, then you need gas to be able to transport things across the country in certain timeframes before they spoil. Then you have to get them into the actual facilities, the grocery stores where you and I buy them. So all those additional expenses add up at the end of the day.”
Cirksena said it could be another 12 to 24 months before Americans see inflation get closer to the Fed’s target of 2%. He also said we may not see pre-pandemic prices again.
“When prices rise on certain things like groceries and on gas and other things like that, even when inflation eventually decreases, a lot of times you don’t see those prices head back in the other direction,” he said.
Price gauging accusations
The increased cost has many Democrats calling on President Joe Biden to investigate grocery store chains for alleged price gauging, according to a letter obtained by TIME Magazine.
Sen. Elizabeth Warren authored the letter, which was co-signed by five other senators and 35 House Democrats, asking the president to use executive authority to look into these alleged price-fixing practices after a Federal Trade Commission (FTC) report found that major grocery chains gamed the system during the pandemic to hike prices and increase profits.
Fed chair Jerome Powell seemed to indicate there wouldn’t be another rate hike, even with less-than-ideal inflation reports, but others think a hot CPI report might force his hand.
Rebel Cole, a finance professor at Florida Atlantic University, spent a decade working as a financial economist in the Federal Reserve System. He said the Fed stopped raising rates way too soon. Cole said that, combined with our increasing deficit, is hindering any progress to tame inflation.
“You’ve got the Fed trying to fight the inflation that has been caused by this reckless fiscal policy — at the same time it’s kind of like getting in a race car, and putting your foot all the way to the pedal on the gasoline, and then pumping the brakes,” Cole said. “The Fed, they just can’t get it done.”
Cole said Americans are not seeing double-digit inflation from 2022, but prices are still increasing more than 3% a year — and wages aren’t keeping up. He explained that’s why it seems to be hitting Americans from every angle.
But it’s not all doom and gloom. Some areas are seeing price breaks, including domestic airfare, car rental prices and hotel room costs.
NewsNation’s Devan Markham contributed to this report.
