Inflation has been worse for lower-income families, Fed analysis shows

MINNEAPOLIS (FOX 9) - An analysis by the Minneapolis Federal Reserve shows inflation has been higher for lower-income individuals.

Background

Starting in early 2021, inflation rose to levels not seen since the late 1970s. The inflation was felt worldwide, with experts blaming lingering pandemic effects, like labor shortages, supply chain issues, and government spending during the pandemic that sent inflation spiraling.

Deep dive

In its analysis, the Minneapolis Fed found, when broken down by income, lower-income households saw prices rise 2 percent more than wealthier households. Over a longer term, since 2005, the Fed says the consumer price index for lower-income households has risen ten percent faster than wealthier homes.

As the Fed points out, higher inflation is more difficult for lower-income households to navigate.

Context

The Fed warns that the data is being pulled from newer datasets, some of which include "experimental, ongoing data releases from the federal government, New York Fed, and private researchers."

At the same time, experts point out that inflation is complex and there can be a wide range of impact within any income group.

The analysis includes a remark from former Federal Reserve Vice Chair Lael Brainard from 2022 that reads: "We are only beginning to understand the ways in which inflation experiences vary from household to household, how this variation correlates with income and demographic information, and how these divergent inflation experiences change over time."