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We’ve all been impacted by rapid price increases that began in 2021, but Black and Hispanic households felt the pinch more.
That’s according to research by the New York Fed that published Wednesday. The report found that Black and Hispanic households experienced higher than average inflation during most of 2021 and 2022. However, inflation inequality has lessened as the price of gas and used cars has gone down in the past few months.
On average, different groups of people buy different amounts of different things, so price increases in different categories don’t affect everyone the same. For instance, Hispanic households spend 22% of their income on transportation, compared to 15% for Asian-American / Pacific Islander households. When prices began soaring, especially for used cars and gasoline, the two groups actually experienced different rates of inflation, as the chart below shows.
People with different levels of income also had different experiences during this stretch of inflation. Middle-income families were initially hit the hardest (again because of spending proportionally more on transportation), but in recent months the bottom 40% of households by income have been the hardest hit because inflation is now concentrated in housing and food, which take up more of the budget of lower-income households.
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