The consumer price index, which measures the average change in prices for consumer goods and services, rose a higher-than-expected 8.3% in August, driven by increases in food, shelter and medical care costs.
Although real average hourly earnings also rose a seasonally adjusted 0.2% for the month, they remained down 2.8% from a year ago, which means those paychecks don’t stretch as far as they used to.
A separate report by Bank of America found that 71% of workers feel their pay isn’t keeping up with the cost of living, bringing the number of people who feel financially secure to a five-year low.
Those struggling to afford their day-to-day lifestyle tend to rely more on credit cards and carry a higher monthly balance, making them financially vulnerable, according to Nayar.
“It is no secret that prices have been increasing for everyday Americans — not only in the goods and services they purchase but also in the interest rates they’re paying to fund their lives,” he said. “This can have detrimental consequences for someone who pays the minimum amount on their credit cards every month.”
The central bank has indicated even more increases are coming until inflation shows clear signs of a pullback.