Shelter and Clothing Get More Expensive With Inflation Stubbornly Entrenched 

woman working on household budget

We may have to wait a bit longer for rate cuts.

And for the U.S. consumer, inflation’s a stubborn fact of life — volatile, to be sure — and it seems like when one category of spending becomes more manageable, others become more expensive.

In the latest reading of the Consumer Price Index,, the Bureau of Labor Statistics noted on Tuesday (March 11) that prices, overall, were higher last month, as inflation stood at 3.2%, higher than the 3.1% rate seen in January.  On a monthly basis, prices were 0.4% higher in the month, a rate that was unchanged from January.

Food inflation moderated, which is welcome news for consumers, and particularly for consumers living paycheck to paycheck. Prices for food consumed at home — that is, groceries — were flat in the month, after the metric rose 0.4% in January. The cost of food consumed away from home, at restaurants and other establishments, was 0.1% higher in the month. Overall, through the past 12 months, food is 2.2% more expensive than last year. Food consumed when individuals and households dine out is 4.5% pricier than a year ago.

In a nod to how consumers are coping with the costs of getting food on the table, Karen Webster wrote in a recent column that nearly a third of grocery purchases are made with credit cards, and roughly 95% of consumers paid for their groceries using debit cards, cash or credit. The remainder opted to use buy now, pay later (BNPL).

High Cost of Housing

The shelter index increased 0.4% in February and was the largest factor in the monthly increase in the index for all items, excluding food and energy, the BLS reported. The index for rent rose 0.5% over the month, the data show. Housing costs are 5.7% more expensive than a year ago. Apparel was 0.6% more expensive in February, reversing several months of flat or declining prices.

The takeaways are these: Beyond the speculation — in evergreen fashion — surrounding rate cuts and when (or if) the Fed will make a move, life, overall, is more expensive for consumers. And as noted only yesterday, per separate data from the New York Fed, near-term inflation expectations have stood at 3%, while longer-term inflation expectations are moving higher. “Perceptions about households’ current financial situations deteriorated somewhat with fewer respondents reporting being better off than a year ago,” a statement accompanying the data noted. “Year-ahead expectations also deteriorated marginally with a smaller share of respondents expecting to be better off and a slightly larger share of respondents expecting to be worse off a year from now.”

The impact’s been widespread, as the latest PYMNTS Paycheck to Paycheck report detailed that even higher earners are feeling the pinch of inflation and of living month to month, as it were. Of those earning more than $100,000, 28% of high-income shoppers have purchased lower quality products due to price increases.