Falling gas prices aren't enough to help offset higher cost of housing, food, child care
American consumers are undeterred. Even with inflation rising last month to 8.3% they haven't cut back on spending.
In contrast, they spent 13% more in August compared with last year, according to a Bank of America Institute analysis using data from 67 million consumer and small business accounts. And they're finally starting to spend more on discretionary goods and services after months of pulling back.
This comes as average gas prices experienced a more than 10% decline last month, according to the August CPI report. At the pump, Americans paid around 20% less per gallon of regular gas compared to there cord high of $5.02 per regular gallon in June, according to AAA.
But whatever savings they got from falling gas prices are essentially erased by the rising cost of other necessities.
Housing costs, which includes what Americans pay in rent and to own a home, rose by 0.7% in August. Compared to last year, costs are up more than 6%.
Housing market cools:Is the US housing market in a recession or a correction?
Americans paid 0.7% more for groceries last month, and compared to last year they're paying 13.5% more.
The cost of medical care also increased by 0.7% last month. They're up 5.6% compare to last year.
The number of customers making child care payments is nearly at its pre-pandemic level.
The authors of the Bank of America analysis found that the rise in child care spending has a "very strong correlation" with the labor force participation rate for women ages 25 to 54 years old, which has also risen. The labor force participation rate captures the share of people either working or actively searching for jobs.Last month, it hit 77.2%, topping its pre-pandemic level.
COVID's wrath is receding:Women from 25 to 54 are returning to the job market
A new gender gap surfaces:Men recovered all jobs lost during the pandemic. Women have not.
For much of the pandemic, when day care and child care centers were forced to close, women disproportionately took on child care responsibilities instead of working full time. But with more child care centers now open and many schools back to in-person learning, more women are returning to work or applying for jobs.
But the increased demand for child care is coming with a heftier price tag – households are spending nearly 10% more for child care compared with last year, according to data from Bank of America.
The August CPI report revealed Americans are paying 3.7% more for day care and preschools compared to last year.
Cost of utilities
Bank of America customers paid 16% more on average for utilities last month compared with a year ago. CPI figures show Americans paid 1.5% more for utilities last month and 17.2% more compared to a year ago.
The cost of utilities, including electricity, came as much of the country experienced heat waves and/or higher-than-average temperatures this summer.
'Even more extreme':Blistering heat to roast California, other Western states this week
Best US states for electric vehicles?:You'll probably be shocked by the answer
Elisabeth Buchwald is a personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here