The Impact of Inflation on Household Finances

Inflation, largely influenced by the massive stimulus packages under the Biden administration, has led to a decrease in real household net worth. As inflation surged to 9 percent, wages failed to keep up, resulting in a decline in purchasing power for the average American. The cost of borrowing, encompassing mortgage rates, car payments, and credit card debt, has significantly burdened households, leading to a sense of feeling worse off despite nominal wage increases. This inflation-driven scenario has left the consumer and average household squeezed, even if job losses have not occurred yet.