The average American family is spending $72 a month more on groceries due to inflation as experts predict a 2023 recession
- American families continue to struggle to meet the rising cost of living as household budgets continue to be plagued by inflation
- The latest CPI report showed that inflation has slowed significantly since the summer when the figure was 9.1 percent
- However, despite declining inflation, there is a more than 60 percent chance of a recession in 2023, according to a panel of experts surveyed by the WSJ
As inflation continues to squeeze American families’ budgets, Moody’s Analytics December report showed that families are spending an estimated $72 more a month on groceries than a year ago.
That figure comes from a report that said a typical US household is spending $371 more on goods and services than it was a year ago.
That number has come down since inflation peaked in June when families spent a whopping $502 more than a year earlier, but still hampers Americans’ ability to keep up with their bills.
According to the report, on average, Americans spend more than $82 more per month on housing and $72.01 more on groceries.
Inflation slowed to 6.5 percent in the last month of 2022 – the slowest growth since October 2021
American families pay more than $72 more in monthly grocery bills than they did a year ago
Last Thursday, the US Bureau of Labor Statistics said Americans are spending 11.8 percent more on groceries than a year ago.
Some household items, like eggs, have risen in price by as much as 60 percent in the last year. The startling surge in eggs is partly due to a supply shortage caused by an unexpectedly poor bird flu season.
Utilities are also up more than $47, as is entertainment, which is up $15.27.
A bright spot in the report was the price of gasoline, which has declined $1.55 a month since the start of the exorbitant spikes the Biden administration oversaw last winter into spring.
The report also shows that wages are now rising much faster compared to a few months ago. Inflation has also slowed.
While consumer prices rose 6.5 percent year-on-year in December, that figure is the lowest CPI reading since October 2021. It was 7.1 percent in November and peaked at 9.1 percent in the summer.
Matt Colyar, an economist at Moody’s, said in the report released Thursday, “Significant progress was made in the US economy’s fight against elevated inflation in the final months of the year.”
President Joe Biden spoke last Thursday about falling inflation rates.
In brief remarks he said: “Although inflation is high in the world’s major economies, it is falling month by month in America, giving families some breathing room.”
Despite the president’s sunny disposition on the economy. Experts continue to predict that the US economy will be hit by a full-blown recession in 2023.
Since last year, egg prices have risen by an average of 60 percent nationwide
Food prices continue to hit US households hard, even as wage growth begins to catch up with inflation, according to the latest BLS report
In a new report, economists and academic economists polled by the WSJ put the chance of a recession in 2023 at 61 percent. A small change from the 63 percent who said the same thing in October 2022.
Deutsche Bank economists Brett Ryan and Matthew Luzzetti said: “While recent inflation data show some progress, some stubborn categories such as core services are associated with the historically tight labor market, suggesting there is still a long way to go Fed.’
“The Fed would continue its tightening stance to restore the balance between the labor market and price stability, which we believe would lead to a sharp rise in unemployment and a recession,” they continued.
According to the survey, economists remain concerned about the Federal Reserve’s ongoing efforts to tame inflation as the biggest risk to the US economy in 2023.
A quarter of the 71 economists surveyed said the housing market was the hardest to cool, while 18 percent said inflation in the personal services camp was the hardest to curb.