Families, businesses scramble to make ends meet amid surging U.S. inflation

Video: "Everyone's pinching a little bit here and there." -- U.S. inflation surged to the highest level in three decades as supply chain disruptions have persisted for months. Let's hear how it impacts people's lives. (Xinhua)

U.S. Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen have repeatedly argued that inflation is transitory, but former Treasury Secretary Larry Summers said in a recent interview with CNN that policymakers in Washington have almost every month been "behind the curve," and inflation doesn't look so transitory.

WASHINGTON, Nov. 14 (Xinhua) -- Software engineer Robert Moran, 37, has switched to Lactaid milk as it doesn't spoil as much, and is now buying cat food in bulk. These are some of the small changes in his spending habits that can help him save money.

"Everyone is budgeting, everyone's going for the bargains, for the coupons, there's like an app for everything. So you definitely notice that something's going on," Moran told Xinhua Thursday, after shopping at a Safeway store in Arlington, Virginia.

The "new normal" shopping behaviors of Moran and his friends' are a result of rising prices and reduced income amid the COVID-19 pandemic, which according to Moran, is "not a good combination."

According to data released by the Labor Department on Wednesday, U.S. inflation remained elevated in October as supply chain disruptions persisted, with the consumer price index (CPI) soaring 6.2 percent over the past 12 months, which marks the fastest pace in three decades in the country.

The CPI surged 0.9 percent in October month on month after rising 0.4 percent in September, with the energy index up 4.8 percent over the month and the food index up 0.9 percent, the report showed.

As food prices continue their steady climb, a private school staff member, who called himself Anthony and lives in Washington D.C., is feeling the pinch.

"There's definitely a noticeable increase in prices," he told Xinhua. "We eat less meat because of that. I shop for sales more."

Surging food prices have also dealt a heavy blow to the restaurant industry, which has been struggling to recover from the pandemic.

"A 40-percent price increase is considered a price increase with a conscience," Peter Chang, Chinese chef and restaurant owner, told Xinhua. "The price of some products have already doubled."

Chang said the price of beef tenderloin used to be 14-15 U.S. dollars per pound, and is now 26-27 dollars, while the price of garlic has surged from 60 dollars per case to over 120 dollars.

Chang, who owns several Chinese restaurants in the Washington, D.C. metro area and beyond, said that food costs used to account for 20 percent to 22 percent of total revenue, but that percentage has soared to 30 percent to 33 percent.

"With higher food prices, labor cost, and other operating cost, it's extremely hard for a restaurant to even make ends meet," Chang said, noting that many restaurants were already forced to close.

Rising food and gas prices seem to be getting the most attention, but prices of other products are also going up. Excluding food and energy components, the so-called core CPI rose 0.6 percent in October after increasing 0.2 percent in September. Over the past 12 months, the core CPI climbed 4.6 percent, a record high 12-month increase in 30 years.

People shop in a grocery store in Washington, D.C., the United States, on Nov. 10, 2021. (Photo by Ting Shen/Xinhua)

PRICE HIKES SPREAD

"The breadth of price hikes continues to widen well beyond the industries most affected by the pandemic," Sarah House and Michael Pugliese, economists at Wells Fargo Securities, wrote in an analysis.

New vehicle prices rose 1.4 percent in October, while used car and truck prices rose 2.5 percent, they noted, adding that household furnishings, medicinal drugs, sporting goods and tobacco and smoking products also saw "sizable" price increases last month.

"We are skeptical this scorching hot goods inflation will cool in the near term," said House and Pugliese, adding that with supply lines still knotted and strengthening services inflation, they expect CPI to run over 6 percent through the first quarter.

U.S. Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen have repeatedly argued that inflation is transitory, but former Treasury Secretary Larry Summers said in a recent interview with CNN that policymakers in Washington have almost every month been "behind the curve," and inflation doesn't look so transitory.

Amid continued supply chain bottlenecks and a labor shortage, many economists expect U.S. inflation to persist for a while, and then start to ease next year.

With prices still surging and the holiday season looming, everyday Americans will have to make some tough decisions.

"I think it's going to be a burden for myself and for a lot of families, especially as the holiday season approaches and people start buying Christmas and other holiday presents," Colette Bruder, who started her first job in the spring at a nonprofit organization.

"I have a big family, so I am expecting to buy presents and just trying to be proactive about purchasing them well in advance," said Bruder.

Moran and his fiancee "didn't go all out with decorations" during the last holiday season, and they are planning to cut holiday expenses this year as well.

"When you're making less money, you don't really throw a party every day," said Moran.

Moran's weekly work hours have been slashed from 40 hours to 32 hours, which means he now gets a weekday off "at the expense of income." He no longer enjoys full-time work benefits, such as healthcare.

"I think everyone's going to be spending a lot less this holiday season," said Moran. "This year has been very rough."