The prevailing inflationary conditions have induced considerable financial strain on many American households, compelling them to allocate increased funds towards essential expenditures such as food and rent. This economic burden is particularly pronounced among low-income individuals, as they’re already constrained income is significantly affected by the fluctuations in prices.
These insights, as reported by the Labor Department, emerge against a backdrop of escalating pessimism within U.S. households regarding their financial outlook under the current administration led by Biden. It has been reported that a growing number of Americans are even making emergency withdrawals from their 401K retirement plants to cover financial emergencies amid chronically high inflation.
Little Economic Growth
Federal Reserve Chair Jerome Powell reported that “Inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal of 2%.” Also, that consumer prices remain “too high” and a return to pre-pandemic levels may require slower economic growth.
A survey published by Bankrate last week shows that 50% of Americans say their financial situation has gotten worse since the 2020 presidential election. By comparison, just 21% think their financial situation has improved, while 26% believe it is unchanged.
“The plight of the economy over the next 12 months may help to dictate whether it was wise, or not, for President Biden to trumpet the branding of ‘Bidenomics’”, said Mark Hamrick, senior economic analyst at Bankrate.
Who’s to Blame?
Among those expressing a negative sentiment regarding their financial prospects, approximately 45% attributed their concerns to President Biden and his economic policies. Another 35% point to congress, while 27% identify the Federal Reserve as a contributing factor.
Despite the White House highlighting a consistent year long decline in inflation, most economists attribute this trend to the Federal Reserve’s assertive interest rate adjustments and the resolution of supply chain disruptions, rather than the direct impact of the president’s economic agenda.
While inflation has moderated from the peak levels observed in mid 2022, many households are yet to experience tangible relief. The consumer price index continues to exceed the typical pre-pandemic rate, and essential expenses such as food, gasoline, rent, and childcare remain notably higher compared to just one year ago. The enduring elevated prices are compelling Americans to allocate about $650 more per month than they did two years prior.
As they spend more and more on everyday goods, Americans are burning through their savings, and are increasingly turning to credit cards and 401k’s to cover those basic expenses. But Americans should look elsewhere and invest in precious metals to hedge against inflation and uncertainty.
When the stock market crashes, the value of precious metals typically increases. This makes them good insurance for your money in case of an economic downturn. Precious metals, such as Gold or Silver, are a long-term investment because they hold their value over time.
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