MONEY & LIFE

Inflation Is Hitting These Americans the Hardest

By: Anneken Tappe · December 01, 2023 · Reading Time: 2 minutes

Uneven Playing Field

Americans of all demographic groups have noticed the higher prices on products and services over the past years as the pandemic-era inflation took its toll. But young and low-income Americans are disproportionately affected by higher inflation, according to a report from the Federal Reserve Bank of New York .

Forced to Rent

The housing market has posed a challenge for many Americans. Those wanting to buy face tight inventories, high interest rates, and in certain places steep competition. But it’s not much better if you rent, because rents have been going up, too.

Overall, housing costs have outpaced overall inflation this year. In October, these higher costs boosted inflation to 3.4% year-over-year for the lowest 40% of wage earners, compared with the overall consumer price inflation rate of 3.2%. For households whose breadwinners were less than 25 years of age, inflation was 0.35 percentage points higher than the overall number.

Disappearing Purchasing Power

These differences might seem small, but they compound year over year and erode the purchasing power of Americans who are already in trickier financial situations. And while inflation has greatly improved from the highs of last year, it’s still higher than what is deemed ideal by the Fed.

Low-income earners are in a particularly tough spot, with higher prices making it harder to save. Meanwhile, those on tighter budgets don’t always have the option to cut back by swapping out pricier products for cheaper ones, leaving them to feel the full force of the inflation we’re all witnessing.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out


Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS23120101

TLS 1.2 Encrypted
Equal Housing Lender