Supply chain issues worsening, report says, pushing inflation higher: How your wallet could be impacted
As inflation continues to surge across the U.S., many consumers report that they’ve struggled over the past year with price increases as well as shortages in common goods, a new report from business intelligence company Morning Consult showed.
Inflation reached a new 40-year high in March for the fifth straight month, according to Bureau of Labor Statistics data, rising to 8.5% annually. Morning Consult’s report found that consumers are especially worried about rising energy and gas prices, as both continue to put upward pressure on the overall cost of living.
It added that consumers in March reported the highest level of supply chain disruptions since the company began tracking such information and that 41% of their prospective purchases were hindered by supply shortages within the month.
“While bottlenecks have loosened for a handful of product types due to fortified supply chains and cooling goods demand, consumers reported increasing difficulty obtaining products in categories such as grocery, housing-related items and vehicles,” the report stated. “These categories account for a relatively large share of spending, in turn playing a major role in driving up overall inflation. The impact of the most severely constrained categories overshadows any relief consumers may feel from abating shortages of other product types.”
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How American consumers have responded to mounting inflation
Morning Consult’s report found that consumers in America have adjusted their purchasing habits as inflation continues to rise. It said that when it came to considering major purchases like a car, house or furniture last month, the majority of people chose not to go through with them. For housing, 72% of consumers opted not to make a purchase, 59% for furniture and 71% for a new vehicle.
“Among U.S. adults who considered making various purchases in March, a majority opted not to buy large, expensive items like homes or new vehicles, whereas nearly everyone who sought to obtain gas, food or personal care products followed through with those purchases,” the report stated.
White House Press Secretary Jen Psaki said during an April 27 press briefing that President Biden has taken a number of steps to address the elevated costs, including extending the current student loan pause, which is set to expire on August 31. She said that Biden’s plan to address inflation “has many different components” and also includes proposals to lower child care, health care and prescription drug costs.
“While unavailability continues to hinder grocery purchases, U.S. adults who opted out of purchasing various items were most likely to cite high prices as the reason,” Morning Consult stated in its report. “Some necessities without natural substitutes – like gasoline – are purchased regardless of sticker shock. But while drivers have little choice but to accept the fuel price hikes, a growing share are curbing expenses by driving less.”