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Economist,Forecast,For,The,United,States.,Glowing,Green,Arrow,Going<\/p>\n Economist,Forecast,For,The,United,States.,Glowing,Green,Arrow,Going<\/p>\n
American households are facing growing financial strain as the cost of everyday essentials continues to climb, outpacing wage growth and eroding purchasing power.<\/p>\n
Affordability Crisis \u2018Getting Worse\u2019<\/p>\n
On Sunday, in a post on X, The Kobeissi Letter, said \u201cbasic necessities have never been more unaffordable,\u201d while noting the steep increases in core expenses since February 2020, with grocery prices up 29% to an all-time high and overall food prices rising 30%.<\/p>\n
Citing data from Arbor Data Science, the post notes that this rising cost burden extends beyond just the supermarket aisle, with the cost of food away from home surging 33% and transportation services up 36%, leaving families with little room in their budgets. <\/p>\n
See Also: Fed Chair\u2019s \u201cNo Risk-Free Path\u201d Warning Sparks Unusual Outcome, As Gold And Stocks Hit Records Simultaneously<\/a><\/strong><\/p>\n It also notes that at the same time, the U.S. Dollar\u2019s purchasing power has been dwindling rapidly, alongside a slowing labor market. \u201cThe US Dollar has lost nearly 25% of its purchasing power during this time and wage growth has substantially slowed.\u201d<\/p>\n The post concludes by saying that \u201cAffordability is still getting worse,\u201d with the Personal Consumption Expenditures<\/a> price index last week rising 2.7% year-over-year in August, significantly ahead of the Federal Reserve\u2019s 2% target. <\/p>\n Basic necessities have never been more unaffordable: <\/p>\n US grocery prices have surged +29% since February 2020 to an all-time high. <\/p>\n During the same period, overall food prices have risen +30%. <\/p>\n Furthermore, food away from home has surged +33%. <\/p>\n Transportation services have\u2026 pic.twitter.com\/7BgeIGdghF<\/a><\/p>\n \u2014 The Kobeissi Letter (@KobeissiLetter) September 27, 2025<\/a>\n<\/p><\/blockquote>\n Trump\u2019s Tariffs Are Fueling Inflation<\/p>\n Last week, economists warned that 72% of the Consumer Price Index components are surging<\/a> ahead of the Fed\u2019s 2% inflation target, driven primarily by President Donald Trump\u2019s<\/strong> trade and tariff policies.<\/p>\n This comes amid the Federal Reserve cutting interest rates by 25 basis points this month, with more cuts expected<\/a> in October and December, which could add to inflationary pressures.<\/p>\n Early this month, economist Peter Schiff<\/strong> had warned against<\/a> cutting interest rates in response to a weak jobs report, saying that \u201cRate cuts now will harm the labor market by weakening the dollar, driving up consumer prices, and pushing long-term interest rates higher.\u201d<\/p>\n Following another weak jobs report, Labor Sec. Chavez-DeRemer said, “Jerome Powell needs to do his job and cut those interest rates now.” But rate cuts now will harm the labor market by weakening the dollar, driving up consumer prices, and pushing long-term interest rates higher.<\/p>\n \u2014 Peter Schiff (@PeterSchiff) September 8, 2025<\/a>\n<\/p><\/blockquote>\n Photo Courtesy: Morrowind on Shutterstock.com<\/p>\n Read More: <\/strong><\/p>\n \n
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