Date: 2025-07-02 Page is: DBtxt003.php txt00026869
US INFLATION
A BUSINESS CHOICE
INC: Inflation Hits Parents Hardest, Fed Study Says
A BUSINESS CHOICE
INC: Inflation Hits Parents Hardest, Fed Study Says
Customers shop at a Target store on May 20, 2024 in Miami, Florida.
Target announced plans to cut prices on thousands of consumer basics
as inflation cuts into household budgets. Photo: Getty Images
Original article: https://www.inc.com/bruce-crumley/inflation-hits-parents-hardest-fed-study-says.html?
Peter Burgess COMMENTARY
I grew up in a generation that is very different from what might be considered nornal for today. I am not comfortable with the 'single use' economy that has become the norm in the USA and much of the modern world.
It seems that students of business have been taught a lot about how to maximise profit for investors, but relatively litt;e anout how to combine that with optimal impact for society and minimum damge to the environment.
In the USA, society does not seem to be 'happy' and the 'polling' is depressing ... but at the same time the US stockmarket, the New Yorl Stock Exchange is at record high levels. A week ago the Dow exceeded 40,000 for the first time, and the other major indeces also reaching record highs. If the stock market is at record jhigh levels ... why are people so depressed and unhappy?
My explanation for this is quite simple. There is massive misinformation that completely blankets everything, and a variety of bad actors that are doing all they can to manage the messaging. The link between factual reality and what people end up thinking\is almost non-existant and it is anyone's gueass what the outcomes are going to be. I am not optimistic ... and will do all I can that is lawful to work towards good outcomes because the alternative is much worse than most people can imaging.
The folloiwng article annoys me. It annoys me because the subject is so important, and the substance of the article so superficial. It is typical of almost all the writing on the subject, and it is no wonder that people and society as a whole have become so poorly informed.
Peter Burgess
Though rising prices top all respondents' worries, the annual household well-being survey shows parents feeling the worst off. One response to inflation? Target slashes prices on 1,500 items.
Written by BRUCE CRUMLEY @BRUCEC_INC
MAY 22, 2024
Inflation remains a leading concern among economists, consumers, and companies--many of which have suffered declining sales as rising prices led budget-minded shoppers to cut spending. New data from the Federal Reserve indicates that parents of children under the age of 18 are having a particularly hard time navigating the continuing inflationary period--a struggle that's prompting some businesses to ease family financial pains with price cuts.
The difficulty one-third of parent respondents said they've had balancing limited incomes with higher living costs is a notable finding in the Fed's annual study. While the recent version of that 'Economic Well-Being of U.S. Households' survey found the '72 percent of adults doing at least okay financially was similar to the 73 percent' in the previous poll, those 'living with their children under the age 18... doing at least okay financially fell 5 percentage points' to 64 percent.
That decrease in the number of parents feeling they're getting along fine is all the more significant when compared to the high mark of 75 percent of upbeat respondents just three years ago. Why the big drop since 2021? As the Wall Street Journal's report notes, that year coincided with both the tail end of pandemic economic stimulus payments, and a short-term child tax credit that expired at the start of 2022. But the main factor appears to have been higher inflation--driving costs up for everyone, but particularly people paying for the diverse needs of growing children.
One of the biggest financial drains for people with younger kids was childcare, which 40 percent of single parents and couples said they relied on. The median monthly cost for those services was $800, rising to $1,100 when they needed more than 20 hours each week. Those parents said they typically spent '50 to 70 percent as much per month on childcare costs as they did on their housing payment'--an outlay that must factor considerably into that cohort's higher rate of reported financial strain.
Those and myriad other costs to people raising children--aggravated by months of relatively strong inflation--are now leading some companies relying heavily on family spending to help lighten the load.
Fast-food chains are now introducing discounted menus to benefit people forced by inflation to reduce their spending. Earlier this month, meanwhile, Walmart launched its Bettergoods line of food items, most of which are priced under $5. And just this week, Target said it had cut prices on 1,500 'frequently shopped items,' including groceries. It plans to more than triple that number to 5,000 items in coming months, the company announced in an earnings call that reported disappointing sales, which sent the retailer's shares plunging 10 percent
Rick Gomez, the chain's executive vice president and chief food, essentials, and beauty officer said the discounts were a response to consumers 'feeling pressured to make the most of their budget.' He predicted the 'lower prices across thousands of items will add up to additional big savings for the millions of consumers that shop Target each week.'
Efforts to offer bargains to familiy shoppers squeezed by inflation may spread to other retailers if the Fed's study is any indication. The pinch of rising prices is causing pain everywhere, it found.
Inflation rates have considerably slowed since their peak of 9.1 percent in June 2022, with the Fed now slowly warming to potential interest rate cuts. Despite that calming, 35 percent of Fed survey respondents cited increasing prices as their main financial challenge, up 2 percent from the previous poll.
Those worries were also reflected in the University of Michigan's most recent monthly reading of consumer confidence, which dipped to its lowest level in six months.
For the time being, spending continues to increase, though its rate of growth has been slowing as households fret about enduring inflation and its economic impacts. To keep rates of consumption--a principal driver of the economy--going until the Fed's efforts to curb inflation reassure increasingly thrifty shoppers, more businesses may need to roll out additional discounts that serve as their own, in-house inflation-fighting remedies.
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