US economy expands while households grapple with soaring living costs

Since late 2019, US consumer prices have climbed dramatically, affecting essentials such as groceries, dining out, rent, electricity and car insurance, while overall inflation eased to 3.4% in August. Wage growth has risen roughly a third over the same period, but the surge in costs has largely offset those gains, squeezing lower-income households. Those who own property purchased before the recent spike in mortgage rates or who hold equity in the stock market have seen their net worth rise, whereas renters and would-be homebuyers face substantially higher monthly payments.

The job market shows an unemployment rate of 4.2% in September, indicating that firms are not laying off workers but are also adding fewer new hires, a trend that hurts job seekers, particularly recent graduates and the long-term unemployed. Concerns about artificial intelligence’s impact on employment are growing, adding another layer of uncertainty for workers.