Rising housing and health care costs push U.S. consumer inflation higher in December

 Rising housing and medical costs push U.S. consumer inflation higher in December

Washington DC. - The U.S. Consumer Price Index (CPI) rose 6.5% year-on-year in December as rising housing and medical costs continued to push up inflation. The increase was in line with expectations and marked the highest annual inflation rate since 1982.

Housing costs, which account for about one-third of CPI, continued to rise in December, reaching an annual increase of 4.8%, the highest since 1991. Rental costs increased by 5.1%, while owner-occupied rental costs increased by 4.4%.

Health care costs also continued to rise in December, with an annual growth rate of 6.2%, the largest increase since 2007. Prescription drug costs rose 9.2%, while hospital care costs rose 7.2%.

Excluding food and energy, which are volatile and can distort overall inflation, the consumer price index rose 6.2% in December, the strongest annual gain since 1982.

Keeping a close eye on inflation, the Federal Reserve has indicated its intention to increase interest rates as a means to temper it. Anticipated to take place in March, the Fed's upcoming meeting will likely result in a 0.25 percentage point hike in rates.

How will this impact the average consumer?

The increasing inflation is causing financial pressure on families. As the prices of goods and services continue to climb, consumers are finding it harder to stretch their paychecks.

Low- and middle-income households face a unique set of challenges, especially when it comes to allocating a larger portion of their income towards essential needs like housing and food.

Although the Federal Reserve's interest rate hikes are anticipated to mitigate inflation, the timeline for consumers to experience the impact remains uncertain.

In the face of increasing inflation, how can consumers effectively navigate and manage the impact on their finances?

Consumers have a few strategies at their disposal to manage the challenges posed by increasing inflation.

Creating a budget and adhering to it is essential for effectively monitoring your expenses and ensuring that you do not exceed your financial limits.

Explore opportunities to cut expenses by implementing various strategies. These may involve preparing meals in the comfort of your own kitchen on a more frequent basis, comparing prices to secure the most advantageous bargains, and taking advantage of coupons.

Take into consideration the possibility of augmenting your earnings. This may entail pursuing a part-time position, initiating a supplementary source of income, or advocating for a salary increase in your current employment.

While the Federal Reserve remains dedicated to controlling inflation, it is crucial for consumers to proactively safeguard their interests during this period.

For consumers grappling with the effects of increasing inflation, here are a few extra tips to consider.

Before making a purchase, it is crucial to compare prices, particularly when it comes to significant investments like appliances or furniture.

Take the time to explore different options and find the most favorable offers. Utilize online tools that allow you to compare prices or browse through local flyers and advertisements to discover the best deals.

Take into consideration the option of purchasing pre-owned goods. Frequently, used items can be acquired for a mere fraction of the price of brand new ones.

Acquire the skill of do-it-yourself (DIY). There exists a multitude of tasks that you have the

 capability to undertake independently, such as addressing minor repairs or preparing meals in the comfort of your own kitchen.

Consumers can effectively handle increasing inflation and maintain their budgets by implementing these helpful tips.