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How Inflation Is Altering People’s Behavior

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Americans are suffering from sticker shock.With inflation running at 8.6 percent, its fastest pace in 40 years, people are balking at the rising cost of everything from groceries to gas.In May 2021, the average price of a dozen large eggs was $1.60. A year later, it was $2.80 — an increase of 75 percent. Ground beef is up 13 percent per pound. A gallon of whole milk costs one-fifth more. Overall, grocery prices were 12 percent higher last month than they were a year earlier, according to the Bureau of Labor Statistics. That was the largest year-over-year increase since 1979.At the same time, the average driver was paying nearly $275 a month at the pump, up from $167 in June 2021, when a gallon of gas was $3.07, according to Kelley Blue Book’s calculations. Rents, too, are escalating. The median monthly rent was nearly $1,850 in May, according to Realtor.com, up 26 percent from 2019, before the pandemic.The Federal Reserve is trying to combat runaway price increases by raising interest rates. But that is stoking new fears: If the Fed overdoes it, high rates could cool demand so much that the economy tips into a recession. Many consumers are bracing for the worst.To cope, people around the country are changing their consumption habits. Some are starting budgets and shopping at discount stores. Others are skipping red meat and fish, walking dogs for extra cash, canceling subscription meal kits or, like Harold Topper of Stamford, Conn., resorting to psychological tricks to blunt the pain.These days, Mr. Topper fills up his gas tank when it dips by a quarter, because it costs just $25 to refill. In his mind, the price is more palatable than at the half-tank mark or worse.“After all, isn’t perception reality?” Mr. Topper, 66, said.In a recent poll conducted by the American Psychological Association, more adults ranked inflation …

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