Everything just feels more expensive these days, from groceries to gas tank. Prices are actually high enough that they have been creeping out, and it’s not just in your head. Houses across North America, specifically in the United States and Canada, are feeling the pressure of global inflation.
Just alone in US, Inflation makes life worse for 65% of households in terms of financial issues.
But why is this happening? What is going on? Why is everything expensive, and how is it affecting everyday life?
What Is Inflation, And Why Should We Care?
In essence, inflation is the gradual increase in prices relative to the average cost of goods and services. A small amount of inflation is acceptable and even beneficial. But when prices cross the normal wages, that’s when the problem arises.
Currently, we are facing the type of inflation where we have to double-check before buying anything, even after that, the receipt looks as if you have bought organic gold instead of fruits.
Let’s dig into it:
- Inflation and the USA
Toys, auto parts, and large appliances all saw price increases in the US in the last few month, but the overall effect of Donald Trump’s new tariffs on consumers was comparatively mild.
According to the most recent official inflation data, prices increased 2.4% in May compared to a year earlier, up from 2.3% in April.
Price increases for housing and groceries persisted, but they were counterbalanced by decreases in other sectors like clothing, gasoline, and airfare.
People are keeping a close eye on the Labor Department’s monthly report to see how Trump’s decision to increase import taxes affects the largest economy in the world.
- Global impact of Inflation
This isn’t only related to U.S. inflation; it is a global problem. Countries similar to the UK are experiencing the same spikes. The world economy is more united than ever, and when supply chains tangle or energy prices go up, then it causes a great impact on a global level, including right into your wallet.
If we go back in time, Governments around the world pumped trillions into the economy to keep things afloat in the early pandemic years. If we combine it with the supply chain issues, shortage of labour, and rising demand after things reopened, then we can get to know why prices started to rise.
The last three years have seen a wild ride in global inflation. Early in the pandemic, demand and oil prices collapsed, causing a sharp drop in global inflation.
However, as demand recovered, supply disruptions intensified, and oil prices increased, it began to pick up steam in the middle of 2020. Global inflation reached its highest point since the mid-1990s in July 2022.
After that, it started to decline, but it is still much higher than the pre-pandemic average. The causes of changes in global inflation have become a focal point of policy discussions as a result of these developments.
- Inflation rate in the United States
The annual inflation rate in the US has gone up for the second consecutive month to 2.7% in June 2025, the highest level since February, up from 2.4% in May and in line with expectations. Prices rose more for food (3% vs 2.9% in May), transportation services (3.4% vs 2.8%), and used cars and trucks (2.8% vs 1.8%). Also, energy cost declined much less (-0.8% vs -3.5%).
Prices for gasoline (-8.3% vs -12%) and fuel oil (-4.7% vs -8.6%) continued to decrease while the rise for natural gas prices remained elevated (14.2% vs 15.3%). Meanwhile, inflation fell slightly for shelter (3.8% vs 3.9%) and new vehicles (0.2% vs 0.4%).
On a monthly basis, the CPI rose 0.3%, marking the largest increase in five months, and up from 0.1% in May, but matching expectations. Annual core inflation went up to 2.9% from 2.8%, but below forecasts of 3%. Monthly core CPI also rose less than anticipated by 0.2%, compared to forecasts of 0.3% and 0.1% in May.
- Current Situation
Inflation has started to hit homes, and for low and middle-class families, these changes are disruptive. Some families have no choice but to cut back on nonessentials, delaying home repairs or even using savings accounts just for the things to carry on.
Inflation has made basics like bread, milk, and energy far more expensive.
Banks are also increasing interest rates in order to slow inflation, and that has made mortgages and loans pricier.
How are families coping?
Families across North America are getting creative and resourceful to survive this economic climate, and here’s how they are doing it:
- Budgeting:
Families have started to pay more attention to where every dollar is going. They started to budget like pros by planning meals, couponing, and cutting extra subscriptions.
- Side hustles:
From freelancing writing to driving a shared ride, more people are turning to additional and extra income streams to overcome the gap.
- Minimalism:
People have started to live with less; minimalism is becoming a practical approach. Families are rethinking purchases, prioritizing needs over wants, and appreciating second-hand shopping.
- Moving and downsizing:
Some families have decided to relocate to more affordable areas or downsize their homes to reduce housing expenses, which is now one of the biggest inflation pain points.
Conclusion:
Inflation isn’t just an economic concept that plays on your favourite news channel; it’s something that’s reshaping how families live and spend across North America.
Economists predict that inflation will gradually slow down, but the new normal may include the higher prices of the present time.
Some may see pricing for the electronics and used cars stabilising, but the essentials like housing, food, and healthcare may remain costly.
At the end, not all hope is lost.
