Here's how much inflation is costing Americans each month
Spiraling inflation is costing the typical U.S. household an additional $296 per month — and shows little sign of slowing anytime soon, according to a new analysis by Moody's Analytics.
Supply-chain constraints and robust economic demand, combined with U.S. sanctions on Russian businesses, are driving broad increases in the price of food, energy and other items. The Consumer Price Index, a measure of changing prices over time of a basket of goods, rose 7.9% in February from a year ago — the fastest annual rate since the Reagan administration.
"It's going to get worse before it gets better," the economic research firm said in a report.
A key driver of inflation is soaring gasoline prices, which have steadily climbed during the economic recovery amid rising consumer demand and, more recently and steeply, Russia's attack on Ukraine.
Lingering bottlenecks in critical products, such as semiconductors and industrial metals, also continue to hinder supplies and raise costs.
"U.S. inflation is at its highest level in about four decades," Moody's said. "Much of the inflation has been caused by pandemic-generated supply constraints, although Russia's invasion of Ukraine is creating additional constraints that will push inflation higher and for longer than thought before the assault began."
Consumers are spending less on the goods and services seeing the sharpest price increases, according to the report. These include rent, food, vehicles, furniture and household equipment.
"The poster child for that are new and used cars," said Ryan Sweet, an author of the report. "Supply chain-related disruptions to chip manufacturing in Asia Pacific is limiting the amount of inventory for vehicles in the U.S. and driving prices through the roof."
Grocery prices have also risen dramatically, a particular blow to Americans living on a budget. The biggest food price hikes are for meat, with pork and beef up 14% to 20%, respectively, compared with a year ago.
"What's going on in Europe has put pressure on food prices at restaurants and grocery stores, and we're seeing consumers' inflation expectations increase. It's attributed to the prices we're seeing at grocery stores and at the gas station," Sweet said.
Data from Adobe shows that online prices are also elevated — an unprecedented shift as ecommerce has exploded over the last two decades and often driven down retail prices. The digital analytics company found that consumers have spent $32 billion more for the same amount of goods during the pandemic.
"We've never seen inflation online before. You would expect people to be getting more goods for money in any given year," Adobe analyst Taylor Schreiner told CBS MoneyWatch.
"The fact that people are spending more to get the same goods is a really big change driven by supply-chain issues and labor challenges," he added. "It's new for consumers."