The Average American is Spending $253 A Month More on Groceries, Gas and Other Items Compared to Last Year
This week’s Consumer Price Index report from the U.S. Department of Labor showed a continued easing in the inflation rate, with overall inflation in March 2023 rising only 5% from the previous year. That’s the lowest increase in two years and represents a big drop from the peak inflation rate of 9% last summer.
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Even so, inflation is still well above the Federal Reserve’s target rate of 2%, and some monthly bills continue to rise at a much faster rate than overall inflation. These include food at home (up 8.4% year over year), energy services (up 9.2%) and car insurance (up 15.0%).
It’s not always easy to tell how those figures translate into real dollars for American households. To help give you a better idea of how much more you might be spending per month this year vs. last year, GOBankingRates analyzed 20 spending categories, ranging from housing and groceries to restaurants and personal care items.
First, we looked at average monthly expenditures per category in March 2022, based on data from Morning Consult. Next, we added how much more those expenditures would have been in March 2023, based on the Bureau of Labor Statistics’ latest CPI figures.
The analysis found that the average American spent $253 more a month in March 2023 than March 2022. If that doesn’t sound like much, consider this: It’s enough to pay the utility bill for the average American — with nearly $50 left over. Multiplied over a year, it comes to more than $3,000.
The following table includes information about all 20 spending categories, last year’s averages, and this year’s increase. Whenever possible, the inflation rates correspond to BLS index categories. For example, “Recreation & Entertainment” matches with the BLS’s “Recreation Services” index. Not every category is a perfect match. For example, “Grocery” is aligned with the BLS’s “Food at Home” index – even though groceries include more than just food. Similarly, the “Housing” category aligns with the BLS’s “Shelter” index, which mainly deals in monthly rents rather than mortgages.
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For categories that are not included among the BLS indexes — such as “Auto Leases & Loans” and “Telecom” — we went with the overall March 2023 inflation rate of 5.0%.
All amounts are rounded to the nearest dollar.
| Category | March 2022 Avg. Monthly Expenditure | March 2023 Inflation Rate | March 2023 YOY Spending Increase |
|---|---|---|---|
| Housing | $1,169 | 8.20% | $96 |
| Grocery | $443 | 8.40% | $37 |
| Utilities | $205 | 9.2% (Energy Services) | $19 |
| Auto Leases & Loans | $159 | 5.0% (Overall Inflation Rate) | $8 |
| Gasoline | $149 | 4.60% | $7 |
| Health Insurance | $149 | 5.0% (Overall Inflation Rate) | $7 |
| Telecom | $138 | 5.0% (Overall Inflation Rate) | $7 |
| Recreation & Entertainment | $137 | 5.90% | $8 |
| Car insurance | $125 | 15.00% | $19 |
| Restaurants | $102 | 8.80% | $9 |
| Apparel | $91 | 3.30% | $3 |
| Education | $91 | 3.3% (Education & Communication Services) | $3 |
| Healthcare | $78 | 1.0% (Medical Care Services) | $1 |
| Furniture | $76 | 2.10% | $2 |
| Hotels | $65 | 7.30% | $5 |
| Airfare | $55 | 17.70% | $10 |
| Public Transportation | $50 | 12.40% | $6 |
| Alcohol | $37 | 4.50% | $2 |
| Personal Care Products | $37 | 6.50% | $2 |
| Personal Care Services | $31 | 5.40% | $2 |
| Total change 2023 | $253 |
One thing to keep in mind is that the above figures are only averages, so they might be much higher or lower, depending on where you live.
You can also expect the monthly difference in expenditures to go down — if inflation continues to go down. Many experts expect it to keep easing, though there is hardly a consensus on where it will be at the end of 2023.
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In commentary shared with GOBankingRates, Blackrock’s Gargi Chaudhuri said he expects inflation to remain “stubbornly high” for the rest of 2023.
“[However], we expect it to moderate by the end of the year and still remain above the Fed’s 2% target,” added Chaudhuri, the company’s Head of iShares Investment Strategy, Americas. “We can safely say that we are past peak inflation, but it is too early to call victory against inflation. Investors should continue to think about hedging against inflation and consider how higher interest rates for longer could affect their portfolios.”
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