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6 in 10 Americans Are Stressed Over Inflation. Is It Getting Better?

A stressed person looking through papers and sitting in front of a laptop at a kitchen counter.

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Many Americans felt the brunt of inflation in 2022 when it peaked at over 9% at the midpoint of the year. Inflation has thankfully cooled nicely since that point. But in an August CNBC survey, 61% of respondents said that inflation was still contributing to their financial stress.

Is inflation actually getting better? And when will it go away?

Where inflation stands today

In November, inflation was measured at 3.1% as per the Consumer Price Index (CPI). That’s a far cry from where it stood in mid-2022. However, 2% inflation is far more ideal, and it’s the level the Federal Reserve likes to target for a healthy economy.

One thing you should know about inflation is that it’s a persistent part of the economy and never really goes away completely. There are sometimes individual years where deflation takes over, but for the most part, it’s natural for the cost of goods and services to rise modestly over time. But the hope is that in time, inflation as it currently stands will cool even more.

How to cope with lingering inflation

November’s CPI report is a clear indication that certain living costs are still higher than average. Last month, the cost of groceries was up 1.7%, while the cost of restaurant food was up 5.3%. Shelter costs were also up 6.5%.

All told, we may be stuck in this period of elevated (but not so drastic) inflation for a while. And so it may be best to accept that and find ways to cope.

One option is to reduce one of your larger expense categories. Maybe that’s transportation. If you can get by without a vehicle and take the bus instead, you’ll shed your auto loan and car insurance payments.

Or, maybe it’s possible to reduce your housing costs by getting a roommate, or by renting out a portion of your home, like a finished basement, and using your rental income to help pay the mortgage. There are different options you can consider, depending on your situation.

If it’s not possible to cut down on a large expense, look to the gig economy. If you’re able to work a second job, you can use the extra income you earn to make up for your higher costs. And if you earn enough, you might have enough left over to pad your savings account, giving yourself a cushion for those months when your bills are higher than usual.

Finally, don’t hesitate to fight for a raise at work, especially if your employer did not boost salaries this year as a cost-of-living adjustment. And you don’t have to go it alone. Rally your fellow employees and demand (respectfully) to be paid enough to keep up with rising expenses.

It’s not so surprising to learn that Americans remain stressed over inflation even though it’s cooled nicely since 2022. Unfortunately, though, living costs might remain higher than average for a while. Do your best to cut back where you can, advocate for a raise, and hustle at a second job if necessary so you can manage your personal finances and avoid costly debt.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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