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: The average household is spending an extra $250 a month, or $3,000 per year, due to high inflation — but middle-aged Americans are paying even more

Inflation is running hot, but not everyone is feeling the burn.

The latest edition of the consumer price index showed that inflation was running at a pace of 7.5% in January, representing a 40-year high. The cost of everything from rent to dairy to used cars rose in January, showing how inescapable the run-up in consumer prices has been.

So just how much has all this inflation cost Americans? Moody’s Analytics compared a 7% pace of inflation with the average rate of inflation in 2018 and 2019, which was around 2.1%. Based on that comparison, the average household is spending an additional $250 a month, or $3,000 per year, because of rising inflation.

The impact differs based on age, the Moody’s analysts noted in its recent report. People between the ages of 45 and 54 have borne the largest brunt of high inflation, seeing their expenses increase $305 on a monthly basis. Comparatively, Americans who are 65 years and older are only spending an additional $194 per month.

“As workers demand higher wages to account to the rising cost of living, business may pass those expenses onto customers in the form of higher prices — perpetuating the inflationary cycle.”

The silver lining for households is that the rate of consumer-price growth may soon start to slow a bit. Supply-chain challenges have remained a driver of high inflation throughout the pandemic, but those issues could start to abate soon.

As Moody’s senior director of economic research Ryan Sweet noted, “There have been some signs that stress in U.S. supply chains is easing, and if sustained, this will be a significant source of disinflation for core inflation this year.”

However, he cautioned that as workers demand higher wages to account to the rising cost of living, business will pass those expenses onto customers in the form of higher prices — perpetuating the inflationary cycle.

“This vicious cycle was behind the high inflation we suffered more than 30 years ago,” Sweet wrote. “The Fed views the risks of a regime of high inflation as greater than the downside risks of low inflation.”

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