The increase in expenses is mainly due to rising fuel prices.
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Moody's Analytics Chief Economist Mark Zandi points out greater financial burdens are the result of the increase in prices of gasoline, diesel oil and aviation fuel, which became more expensive after the outbreak of the conflict.
Inflation is accelerating, energy is becoming more expensive
The scale of the problem is confirmed by the latest inflation data in the United States. According to statistics published on Wednesday, consumer prices were 4.2 percent higher in May. higher than a year earlier.
Energy costs increased even more. Within twelve months, energy prices increased by 20 percent, while gasoline prices rose by as much as 40.5 percent. Fuel and transport expenses are currently one of the greatest burdens on household budgets.
Experts emphasize that the increase in energy prices affects not only drivers, but also the prices of many other goods and services whose production and transport depend on fuel costs.
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Tax breaks did not compensate for the increase in costs
Even before the war with Iran began, President Donald Trump pointed to lower fuel prices as one of the evidence of the improving condition of the economy. In his February State of the Union address, he also announced the introduction of tax breaks aimed at increasing Americans' incomes.
According to Marek Zandi, however, these actions turned out to be insufficient in view of subsequent price increases. As the economist noted, “they increased the average tax refund by just under $350,” while the additional war-related expenses were much higher.
As a result, many Americans today experience a real decline in purchasing power, despite previous tax benefits.
The less wealthy suffer the most
According to experts, the effects of price increases are not evenly distributed throughout society. The most vulnerable are low- and middle-income households, for which energy costs constitute a much larger share of their monthly budget than wealthier people.
Rising fuel, transport and energy bills limit the financial possibilities of many families, forcing them to give up some of their expenses or limit their savings.
As “Newsweek” notes, The consequence of this situation is not only greater pressure on household budgets, but also deepening economic inequalities. There is an increasingly clear division between those who are able to absorb the rising costs of living and those for whom further increases become a serious threat to financial stability.
