The typical American household spent $709 more in July than they did two years ago to buy the same goods and services, according to Moody’s Analytics.
Most of that increase in spending is driven by housing costs, which have surged, Zandi told CNN in an email on Friday. He added that families are also spending more at the grocery store; on buying, maintaining and insuring vehicles and on recreational services like cable.
Of course, paychecks have also grown over the past two years — but not by as much as the cost of living.
Inflation-adjusted earnings are stuck in 2019
“Real earnings remain below what they would have been if not for the pandemic and the Russian war, which is weighing on the collective psyche,” Zandi told CNN in an email on Friday.
Looking at just the last year, Zandi calculates that the typical household spent $202 more this July than they did a year ago to buy the same goods and services.
“In sum, the report was encouraging,” Bank of America economists wrote in a note to clients on Thursday, adding they “wouldn’t be surprised to see another soft” inflation reading in August.
Although month-over-month inflation readings are “still likely to be bumpy,” Bank of America economists said they “believe that the current disinflation is not a ‘head fake.'”
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