NEW YORK, Aug. 12 (Xinhua) -- U.S. inflation is slowing, but people actually don't feel that way, because prices for many of the things that are hard to do without are still posting eye-watering increases, reported The Wall Street Journal (WSJ) on Monday.
Rent and electricity bills are up 10 percent or more over the past two years, and car-insurance costs are up nearly 40 percent, according to the Labor Department's index. "Shoppers might be able to trade down from prime steak to cheaper cuts of meat at the supermarket, but they can't really do the same thing with the water bill," said the report.
"We're beginning to run out of rope in how much we can substitute out," said David Bieri, an economist and professor at Virginia Tech.
Rising prices have been front and center in the country over the past three years, affecting how Americans feel about the economy and how they are planning to vote. A softening jobs market will only amplify their concerns, noted WSJ.
Major companies say they are seeing consumers trim their spending on nonessential items. McDonald's executives, for example, said recently that they will emphasize a 5-U.S.-dollar meal bundle and other deals, noting that inflation-weary customers were buying fewer items per visit or eating at home.
Other types of spending are harder to avoid, and many of those items take up a large slice of households' budgets. Overall consumer prices have increased 6 percent since June 2022, when inflation hit its recent high, it said.
"Services -- which include such things as dental cleanings, haircuts and eldercare -- have risen nearly twice as fast. That is partly because dentists, salons and nursing homes have had to increase wages for their own workers, who are also dealing with rising prices," according to the report.
Housing is by far the biggest monthly expense for U.S. households. In the CPI, shelter costs -- a measure of rent and the equivalent cost to homeowners, as well as lodging away from home and household insurance -- have risen more than 13 percent in two years, it noted.
