The Price You Pay

The financial impact of the Iran war has followed a similar theme. The investor class hasn’t been much affected as the market continues to pile up gains. The Americans who were living on the edge are getting pushed over it. “Affordability has been a politically potent word, but an ill-defined measure of financial pain, often used as a reference to inflated prices. But new research from the Brookings Institution released Wednesday describes affordability by comparing the rising costs of essentials against family incomes. By that measure, the report found, in 2024, 45.5% of U.S. households did not earn enough to cover their necessities.” And that was before gas and other costs shot up. “The report concluded that a mere $1,000 hike in the annual cost of living would leave another 3 million households unable to make ends meet.” This is how close American households are to the financial edge.

+ “The New York Fed report is the latest set of findings from a series of releases detailing the so-called K-shaped ​economy, ​where the economic fates of the wealthy and those who are not ​have been diverging.” NY Fed finds ‘remarkable increase’ in food insecurity for many Americans.

+ “The U.S. economy has weathered a series of events that have raised prices, including the Covid-19 pandemic, Russia’s invasion of Ukraine and Mr. Trump’s global trade war.” And now a fighting war. NYT (Gift Article): Prices in the U.S. Are Rising at the Fastest Pace in Years.

+ “High gas prices, rising interest rates and stubborn inflation are keeping buyers at home and cars on the lots.” WSJ (Gift Article): One Million New-Car Buyers Are Gone and They’re Not Coming Back Soon.