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EAGAN, Minn. — The food shelves at Open Door Pantry in suburban Twin Cities are usually crowded during the winter holidays.
It was the Monday before Christmas and we were fully booked for meals that day. Nearly 100 volunteers quickly and methodically sifted through thousands of pounds of donated fresh food.
Daily reservations are booked solid through the end of January, and demand for The Open Door’s other community-based food distribution events is overwhelming.
While 2023 was a year of meaningful progress in curbing painfully high inflation, 33 months of soaring prices have hit many Americans, especially low-income Americans, hard. .
For that matter, this year has also been a record year for visits to food pantries in Minnesota and beyond, often located a mile away.
“Years of inflation have piled up,” said Jason Viana, executive director of Open Door. “We were seeing the impact (of wage increases), but inflation wiped it all out.”
When you turn the corner?
In 2022, inflation in the United States soared to levels not seen in 40 years, and the Federal Reserve was engaged in a historic interest rate hike campaign to quell inflation.
At the beginning of this year, inflation had slowed to some extent, with the consumer price index falling from a peak of 9.1% in June 2022 to 6.5% in January 2023. However, the U.S. economic outlook was clouded by continued concerns that the Fed’s aggressive policy actions would influence future policy. This will lead to an economic downturn.
Those dire predictions did not come true.
The labor market remains strong, which stimulates consumer spending and helps keep the broader economic engine running. The home refinance boom and stock market resurgence of recent years have made many, but not all, households wealthier.
Gus Faucher, Senior Vice President and Chief Economist, said: “After a difficult few years, household budgets are expected to recover in 2023 as inflation slows and wage growth continues to outpace pre-pandemic trends. I think the situation is improving.” of PNC Financial Services Group.
Rising fuel and food prices
Although the speed of price rise has improved, the situation is by no means a happy one.
“Consumers remember years ago when they could buy things at a much lower price,” said Kayla Brune, senior economist at market research and analysis firm Morning Consult. She said: “Grocery prices are something that is very visible, something that we buy very often, and there is a lot of awareness about what those prices are, probably second only to gas prices. ”
More than 90% of items tracked by the Consumer Price Index are more expensive than they were in February 2020, with most price increases exceeding 20% and some (fuel and margarine) approaching 55%. As shown by data from the Bureau of Labor Statistics.
Food prices have increased by nearly 25%.
“Even though inflation is slowing, prices are still well above pre-pandemic levels,” said Wells Fargo economist Shannon Seeley. “Households are still grappling with that problem. A slower price growth environment is clearly advantageous, but with the price growth rates of the past few years, it becomes more complicated.”
Melissa Piazza, senior policy analyst at the Cleveland Fed, said decades of high interest rates and the expiration of pandemic emergency measures are exacerbating the layered effects of inflation, further straining household budgets and forcing many to turn to food donations. He wrote that he had no choice but to rely on In a November blog post.
“Low-income households are particularly vulnerable to these increases because they spend a higher percentage of their income on food,” she wrote.
“Absolute hope” for salvation
“I have lived on the edge for the past three years since COVID-19,” said DiNoto, 50, a disabled veteran. on a fixed income. “Prices for everything, including food, went up, and by the end of the month I had no money left.”
DiNoto said he accumulated credit card debt to cover unexpected expenses.
“I haven’t been able to pay any bills this month,” she said. “My debt and bills have increased, my payments have been delayed, my credit card fees have increased, and my minimum payment has increased, which is very painful.”
Inflation is expected to slow further through 2024, which could be the year we see some easing in interest rates.
Open Door’s Viana said he hopes the combination will be enough to give Americans more breathing room and hopefully pull those who are suffering the most back from the brink.
“There is absolute hope that if inflation can be contained and wages can continue to grow, families will get back on their feet and need less support,” he said.