The shrinking power of the U.S. Dollar at the supermarket

(WENY) -- Less than five years ago, the U.S. Dollar had more purchasing power compared to 2024. This is especially true at the grocery store. Over the past few years, the same amount of groceries that would've cost around $80 now costs $100 or more dollars. As Americans, we all know that our money does not go as far as it used to go -- but truly, how bad is it? 

"I've looked at the causes of inflation," says Brett Winnefeld, Senior Equity Analyst at John G Ulman and Associates. "COVID hit and everyone stayed at home and conserved their money. There was nothing we could spend money on. After inflation came out, you know, people who spent their money, inflation was in 2022, it was very high, it was over 9%."

Starting in 2020 and going into the COVID-19 pandemic, inflation hit new highs and went into overdrive. The Federal Reserve has been watching the rate of inflation and trying to tame it with interest rate hikes. But with every increase of rates, comes with the risk of sending the country into a recession if the rates go too high.

While the inflation war continues to be fought, consumers are seeing their grocery basket getting smaller, rent, electricity, and insurance climbing to new heights; and even the price at the pump booming and sending drivers away with nowhere near a full tank of gas. 

At the end of January 2024, the inflation rate hit 3.1 percent. The Feds hope to hit a rate of two percent, and it is unclear when, and how that will happen. Inflation hit supermarkets in the worst way, because some items saw price hikes that outpaced inflation. For example, egg prices skyrocketed roughly 400% between 2019 and 2022. Food Banks said the inflation crunch is taking a bite on the amount of food they can provide to families in need. 

"We are seeing people stretching that grocery budget," says Katie Rhodes, Development & Marketing Coordinator at Chemung and Schuyler counties Catholic Charities. 

Rhodes explained that shopping at the grocery store used to be an easy thing to do, and now more than double the number of clients need the support of organizations like Catholic Charities Samaritan Center. 

If a consumer bought $100 of groceries once a week for a year, on average they would've more than a thousand dollars in purchasing power since 2019. Another issue is shrinkflation, that's where prices remain the same but the item gets smaller or weighs less. 

Even with the uncertainty of tomorrow and how it could affect everyone's bottom line, there is a glimmer of hope for you and your wallet. 

"Inflation is on the decline and we shouldn't see those levels we saw, in 2022 where we had 9%. So it's coming down, but it may be stickier and may last longer than some people hope," shared Winnefeld. 

To follow along and watch any changes click here. Food assistance for people living in Chemung and Schuyler County at Catholic Charities can be found here.

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