Prices are rising for many Americans, with 65% of consumers saying the increases are outpacing their income, according to a J.D. Power survey of 4,000 U.S. adults conducted in February 2026.
Recent inflation data adds to that pressure, with the annual rate rising from 2.4% in February to 3.3% in March, according to consumer price index data released Friday. The increase was driven largely by a surge in energy costs as gasoline prices spiked amid the Iran war. Gasoline prices rose 21.2% in March, accounting for nearly three-quarters of the overall increase, according to the Bureau of Labor Statistics.
While the annualized inflation rate had been trending lower in the past few months, it remains above the Federal Reserve’s 2% target and hasn’t been below that level since February 2021. Cumulatively, prices are up about 16% over the past four years, according to the CPI.
At the same time, income gains have been modest. After accounting for inflation, real hourly earnings have risen only about 1.4% over the past year, suggesting limited improvement in purchasing power for many workers, according to U.S. Bureau of Labor Statistics data.
As a result, many consumers are feeling squeezed. Some 56% of Americans say everyday life has become less affordable over the past year, with many cutting back on dining out and groceries to stay on budget, according to the CNBC and SurveyMonkey Quarterly Money Survey, released in April, which polled 3,494 U.S. adults at the end of March.
“Even among higher earners, there’s a growing sense that everyday costs have quietly crept higher over time,” says Gregory Guenther, a certified financial planner in New Jersey. “The issue isn’t that people are earning less — it’s that their dollars simply aren’t stretching as far as they used to.”
Where Americans are pulling back
Guenther points out that “when people feel like they are working hard but not getting ahead, it creates stress and causes them to second-guess both short-term spending and long-term decisions.”
In addition to cutting back on food costs, about half of Americans say they’re delaying purchases of clothing and home goods, CNBC and SurveyMonkey’s data shows. Similarly, 42% of respondents say they’re spending less on personal care services like haircuts and pedicures, while 22% report pulling back on gym memberships, 21% on alcohol and 14% on rideshares.
Those findings align with J.D. Power data showing that about half of Americans are buying fewer items to stay within budget.
Households are also turning to other ways to keep up. About 39% say they’ve used a credit card to pay for groceries or other essentials because they couldn’t otherwise afford them, according to the CNBC survey.
The broader economic mood has trended lower since early 2025, and consumer sentiment fell in April to its lowest reading on record in the University of Michigan’s long-running survey, with many consumers blaming the Iran conflict for worsening economic conditions.
“A big driver of this anxiety is the combination of persistent inflation, higher borrowing costs and uncertainty around jobs and the broader economy,” Guenther says. “All of this on top of the extreme instability around the world.”
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