Rising gasoline prices hit the US hard

Inflation triggered

The surge in energy prices and record-high inflation have pushed up charges for food, rent, clothes and many other goods.

Soaring gasoline prices, in particular, are having a significant impact on household budgets.

According to an estimate by the Yardeni Research consultancy, a typical US family could incur additional costs of $2,000 a year due to higher gasoline prices. In addition to about $1,000 in extra costs at grocery stores due to inflation, a typical household will have $3,000 less this year to spend on other items.

As gasoline prices rise, consumer spending tends to fall. According to analysts at JPMorgan Chase, each 10 percent rise in gasoline and oil prices will require consumers to fork out an additional $23 billion a year to maintain their spending patterns.

Rising fuel prices have also accelerated falling real incomes, contributing to a decline in consumer confidence, according to a monthly survey of consumers by Michigan University. This month, the Michigan Consumer Sentiment Index fell to an 11-year low of 59.70.

Families budgeting for higher gasoline charges are reducing their spending in other areas. Some people are already driving less due to the higher prices. One in three adults said they cut their use of cars last month, with most blaming rising gasoline prices, according to global data intelligence company Morning Consult.

Joe Brusuelas, chief economist at Wall Street research company RSM, predicts that the US public will experience a once-in-a-lifetime "price-sticker shock" at the gasoline pumps for the remainder of this year.

He said this is because an oil shock coupled with broader inflation has not affected the US since the mid-1970s.