Inflation's Impact on U.S. Consumers Leveling Off

WASHINGTON, D.C. -- A majority of Americans, 55%, say rising prices have caused financial hardship for their household. This percentage is essentially unchanged from August after increasing in two prior measurements. A steady 13% of Americans say higher prices are causing a severe hardship for their family.

Gallup first asked about the effects of higher prices a year ago, at which time 45% said they were experiencing hardship. Two months later, the percentage increased modestly to 49%, before a larger jump of seven percentage points in August.

Although the 13% experiencing severe hardship is technically the highest Gallup has measured to date, the percentage has been fairly stable at around 10% over the past year.

The Nov. 9-27 survey was conducted as gas prices have continued to decline from their June peak and inflation is accelerating at a slower rate than occurred for much of the prior 12 months.

These results are based on a nationally representative web survey of more than 1,800 U.S. adults who are members of Gallup’s probability-based panel.

Previously, Gallup found that Americans are cutting back their spending in general, traveling less, and driving less, to deal with the effects of inflation.

Vast Majority of Lower-Income Americans Experiencing Hardship

As would be expected, inflation has taken a greater toll on lower-income Americans -- more than three-quarters of whom say they have experienced hardship because of rising prices. No less than 66% of lower-income Americans have reported financial strain from inflation over the past year, with the current reading the highest measured to date.

Less than half of middle-income Americans said they were experiencing hardship a year ago, but by January, the percentage jumped 10 points to 56% and has been 60% or higher in the past two measurements.

Upper-income Americans are the least likely to have been affected adversely by high prices, but the percentage in this group who have been has also increased over time, from 28% a year ago to 42% today.

Slightly more than one-quarter of lower-income Americans, 28%, say they have experienced “severe” financial hardship from higher prices, roughly similar to the percentages from the prior polls. Meanwhile, 13% of middle-income Americans and 6% of upper-income Americans have been severely harmed by higher prices.

Bottom Line

There are signs that inflation is easing, even though prices remain higher now than they were a year ago. The fact that Americans’ self-reports of financial hardship are leveling off rather than declining is likely a reflection of just how much prices have risen over the past year, and how much further inflation needs to subside before most Americans no longer feel burdened by it.

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