Economics
U.S. Households Face $5,200 Inflation Tax This Year
This article is for subscribers only.
Inflation will mean the average U.S. household has to spend an extra $5,200 this year ($433 per month) compared to last year for the same consumption basket, according estimates by Bloomberg Economics. The excess savings built up over the pandemic, and increases in wages, will cushion those costs, and allow spending to expand at a decent pace this year. But accelerated depletion of savings will increase the urgency for those staying on the sidelines to join the labor force, and the resulting increase in labor supply will likely dampen wage growth.
Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.