WASHINGTON: Many U.S. households continue to face pressure from grocery, housing and utility bills even after inflation cooled, leaving a gap between improving national price data and day-to-day affordability. In his Feb. 25 State of the Union address, President Donald Trump said inflation was plummeting, incomes were rising fast and the economy was roaring. But the latest federal reports show overall inflation has eased more than prices for many basics, while consumer sentiment remains subdued and borrowing strain has increased.
The Labor Department said the consumer price index rose 2.4% in the 12 months through February, matching January, while core inflation held at 2.5%. Food prices rose 3.1% from a year earlier, including a 3.9% increase in food away from home. Shelter costs were up 3.0%, electricity rose 4.8% and natural gas service climbed 10.9%. Those increases have kept pressure on household budgets even as the broader inflation rate remains well below the highs seen earlier in the inflation cycle.
Income data show some improvement, but not a full release from cost pressures. Average hourly earnings for private workers rose 3.8% from a year earlier in February, and real average hourly earnings increased 1.4% over the same period after adjusting for inflation. At the same time, the labor market has softened. Nonfarm payrolls fell by 92,000 in February and the unemployment rate was 4.4%, indicating that wage growth has continued even as job creation and hiring momentum have become less certain.
Prices Keep Pressure on Households
Debt figures also point to continued strain. The Federal Reserve Bank of New York said total household debt rose to $18.8 trillion at the end of 2025, while credit card balances increased to $1.28 trillion. Aggregate delinquency worsened, with 4.8% of outstanding debt in some stage of delinquency, and the flow into serious delinquency for all debt more than doubled from a year earlier to 3.26%. The same set of readings showed growing stress in mortgages, student loans and credit cards as higher living costs persisted.
Consumer surveys have not yet reflected a broad sense of relief. The University of Michigan’s preliminary March index of consumer sentiment fell to 55.5 from 56.6 in February, its lowest reading of the year, while the Conference Board’s consumer confidence index stood at 91.2 in February, still below last year’s peak. Separately, the New York Fed said one-year inflation expectations eased to 3.0% in February, but households still expected higher prices for food, gasoline and rent, underscoring how essential costs continue to shape views of personal finances.
Housing Costs Stay in Focus
The administration has moved to show attention to one of the most persistent pressure points. On March 13, the White House issued actions aimed at reducing barriers to home construction and promoting access to mortgage credit, steps that followed months of concern over housing costs. Federal inflation data show shelter remained one of the largest contributors to monthly price growth in February. Food costs are also expected to stay elevated, with the Agriculture Department forecasting overall food prices will rise 3.1% in 2026 and restaurant prices 3.7%.
The latest figures leave a mixed picture for U.S. consumers. Inflation is far below its recent peak, wage gains have outpaced overall price growth, and some expectations for future inflation have steadied. But households are still facing higher costs for rent, meals, utilities and debt at a time when confidence remains weak and labor market growth has slowed. In March 2026, the official data still show affordability pressure centered on essentials even as the broader pace of inflation has cooled. – By Content Syndication Services.