This is the least pandemic-y summer in two years, but inflation is dragging down the celebration.
Why it matters: Most Americans are now getting their first taste of living in a high-inflation environment — and they don’t like it.
Prices are up nearly across the board for a lot of things we love to do in the summer, including:
Regular gas prices now average $5/gallon, per AAA — and well over that in some parts of the country. Even if your pay has kept up with inflation (and not everyone’s has), the sticker shock can be demoralizing.
“It just feels bad to spend $5 when you’re used to spending $3,” said Carola Conces Binder, an economics professor at Haverford College.
Dining out: For those who’ve taken a two-year break, there’s a bit of a Rip Van Winkle effect when it comes to eating at restaurants.
Menu prices are eye-popping, and there’s more sticker shock when the check arrives — restaurants are adding “service fees” and tacking on extra charges, The Wall Street Journal reported.
Driving the news: The government’s Consumer Price Index shows average prices rose 8.6% over the last year — a level last seen in the 1970s, an era known for such mood-dulling terms as stagflation and malaise.
“If you’re a millennial and all you’ve ever known was a 2% rate of inflation, this is really bad,” economist Richard Curtin told Axios earlier this year.From 1976 until just recently, Curtin ran the University of Michigan’s consumer sentiment survey — an influential indicator, which measures mood, that recently hit its lowest point since it started in 1952.
On the other hand: While rising prices are starting to pinch — and for some lower-income earners, the pain is a lot worse than that — there are reasons to be cheerful.
The unemployment rate is low and Americans are doing substantially better than folks in many corners of the world.
Plus: You could theoretically spend your summer sipping AriZona iced tea and eating Costco roast chicken while reading books — three products with stable prices.
And, people who are already frugal are certainly having their moment.
The bottom line: The American economy runs on people spending money — it’s 70% of economic activity, after all — and for most of us there’s nowhere to run from rising prices.