Editorial: Gas is cheaper this Memorial Day. So why does your wallet still feel lighter?
You pull into the gas station, surprised to see a $3.49 pump price staring back at you. That's cheaper than last summer. So why doesn't it feel like a win?
Maybe because inside the grocery store, the steak for your Memorial Day cookout costs $16, and it wasn't even a pricey cut. And the soda aisle? A 12-pack costs $9. So the tank might be full, but the wallet still feels empty.
Memorial Day is synonymous with cookouts and time spent outside — or in the garage, if you're a Chicago suburbanite. This weekend is our bridge to summer.
For a long time, the big decision for Memorial Day was whether to stay home or hit the road to take advantage of the extra day off. The open road still calls Americans; AAA anticipates 39.4 million drivers will have traveled by car across the U.S. this holiday weekend and more will plan to travel in coming weeks as the kids gets out of school.
Gas may be down, but AAA shows domestic flights today are 2% pricier versus 2024, when they hardly were cheap. So with prices rising across the board, many families now have to weigh whether travel is worth the squeeze.
Many of us will have chosen a nice Monday gathering with friends and family. But sirloin steak is up 13% this year. Hosting a group of eight might cost you $30 more than it did last May. Add soda, chips, and burgers, and your backyard barbecue is suddenly flirting with triple digits — and that's before dessert.
Restaurant dining on a road trip isn't cheap, either. Eating out costs are up 3.9%, and while the spike has come down from its peak, diners still notice a hefty increase on their bills. At some restaurants, the price spike is even more obvious.
Take IHOP, once a reliable budget option: A milkshake now costs $7.99, up from $3.99 five years ago. The Two x Two x Two meal? It jumped from $5.49 in 2020 to $12.59 today, according to FinanceBuzz.
And that's just the food. We don't make decisions about travel in isolation, we consider our ability to afford a trip. Other unavoidable costs —such as child care, which rose about 6% last year, and car insurance, up more than 20% — are taking even bigger bites out of household budgets and making it harder to justify expensive travel plans.
It's not just higher prices — it's weaker buying power. Wages lagged inflation in 2021 and 2022, meaning people earned more but could afford less. Only recently have paychecks begun to stabilize.
According to government data, the average worker's pay in April 2024 was about 4% higher than it was a year earlier.
But once you factor in inflation, that boost disappears. In 2021 and 2022, prices rose so fast that paychecks couldn't keep up, meaning people could actually buy less even if they were earning more. Lately, because inflation has slowed, take-home pay is holding steady or rising slightly — but most people still haven't fully caught up.
Until real wages consistently outpace inflation — and the cost of essentials stabilizes — it will continue to feel like 'everything's more expensive' even if paychecks are technically bigger.
This helps explain why people are eating out less and cutting back on nonessentials.
A recent KPMG survey found that nearly 4 in 10 consumers reported a decline in household income (double last year's finding) and 70% of respondents said they believe a recession is likely soon. Overall, the survey showed people plan to spend about 7% less on restaurants this summer, looking for ways to cut back costs.
Still, KPMG's analysis shows Americans are still planning to travel this summer — and at an even higher clip than last year. That's the good news, and maybe it means that while we're tightening our belts at the moment, we're all hopeful that things won't stay this way forever.
We've likely seen the peak of inflation. But not the peak of pain. Until wages rise faster than prices — and stay ahead — Americans won't feel like they're getting anywhere. This summer may be cheaper at the pump, but economic pressure still rides shotgun.
Submit a letter, of no more than 400 words, to the editor here or email letters@chicagotribune.com.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Miami Herald
27 minutes ago
- Miami Herald
Fed Chair Powell has closed door meeting at the White House on interest rate cuts
Federal Reserve Bank Chair Jerome Powell stayed the course after being summoned to an economic woodshed at the White House by President Trump, who has been vocal about demands that the Fed ax interest rates. The May 29 faceoff was Powell's first visit to the White House during Trump's second tour. In a statement, Powell's office said the meeting's agenda was to "to discuss economic developments, including for growth, employment, and inflation." Don't miss the move: Subscribe to TheStreet's free daily newsletter Both sides said the meeting was at the invitation of the president, who told Powell in person what he's been saying and tweeting for months: the Fed's refusal to cut interest rates was a "mistake" damaging the economy. The Board of Governors of the Federal Reserve System voted unanimously in early May to approve the establishment of the primary credit rate at the existing level of 4.5% – which means interest rates for lenders, consumers and the rest of Americans won't be budging in the near term, much to the dismay of the Trump administration. This stance "will be updated as appropriate to reflect decisions of the Federal Open Market Committee or the Board of Governors regarding details of the Federal Reserve's operational tools and approach to implement monetary policy," the central bank said in a statement. XinhuaTrump's repeated demands underscore the volatility of U.S. trade policy and provide another flash point for global worries about fiscal policy, which have sent bond yields sharply higher. The whiplashed tariffs, primarily those against China and the E.U., add to economic jitters, Related: Fed official sends strong message about interest-rate cuts Since April 2, or "Liberation Day," tariff threats and trade jitters have spooked buyers and sellers into a seemingly endless roller-coaster ride. Many market, economic, and financial experts have begun publicly warning of a recession within a few months, while others predict a nation stuck in a nasty stagflation. The Federal Reserve has a dual mandate to target low inflation and unemployment. The central bank can raise interest rates to slow inflation, which can cause unemployment. Or it can cut rates to boost job growth, but that can cause inflation. Monetary and stock market experts expect the Fed will lower interest rates by one quarter point in September. Trump told Powell in their meeting he wanted the cuts sooner. Related: Jamie Dimon sends terse message on stocks, economy The Fed's statement following the White House meeting said Powell "did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook." A White House spokeswoman agreed with the statement, but added that the president pressed for immediate action to lower the rates. Powell also said in the Fed statement that he and his colleagues will set monetary policy "as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective, and non-political analysis." Powell will give the opening remarks June 2 at the Federal Reserve Board's International Finance (IF) Division 75th Anniversary Conference, Washington, D.C. The conference will feature a series of panel discussions focused on the division's history and people, as well as an academic panel and presentations by former IF economists. Related: Veteran fund manager who predicted April rally updates S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
New York Post
2 hours ago
- New York Post
Egg prices have plummeted since Trump took office — after hitting all-time high in March
The price of eggs has dropped just over 61% since President Donald Trump took office in January, after spiking to an all-time high in March. The most recent data from the US Department of Agriculture (USDA) shows white, large shell eggs are now $2.52 per dozen nationally. On Jan. 21, that same carton of eggs would have run an American about $6.49, according to data website Trading Economics. Trading Economics shows eggs were over $8 a dozen the first week of March. 'Shell egg demand posted a slight improvement headed into the Memorial Day weekend but remained well below average in the continuation of a trend that began during the sharp price increases in late winter,' the USDA Egg Markets Overview weekly publication said. Back in April, a study by Clarify Capital said over 30% of Americans had stopped buying eggs due to their exorbitant cost. Weaker demand and a lull in new cases of bird flu helped cool prices, analysts said at the time. 3 The price of eggs has dropped just over 61% since President Donald Trump took office after a spike in March. AP Photo/David Dermer 3 Data from the US Department of Agriculture shows white, large shell eggs are now $2.52 per dozen nationally, compared to the same carton of eggs costing about $6.49 in January of this year. AP That same month, Reuters reported that the US had increased imports of eggs from Turkey, Brazil and South Korea in an attempt to increase supplies amid an ongoing bird flu outbreak that has killed nearly 170 million chickens, turkeys and other birds since 2022. Since the outbreak began in 2022, bird flu has affected over 166 million birds, including 127 million egg layers. This equates to an average loss of 42.3 million egg layers per year, or about 11% of the five-year average annual layer inventory of 383 million hens since the outbreak began, according to Bernt Nelson, an economist with the American Farm Bureau Foundation. 3 According to analysts, a weaker demand and a lull in new cases of bird flu helped cool prices. AFP via Getty Images The USDA's Animal and Plant Health Inspection Service (APHIS) confirms that the effects of the outbreak continue today. 'To date, USDA APHIS has confirmed 43 outbreaks in layer flocks in 10 states (AZ, CA, IA, IN, MO, NC, OH, PA, SD, and WA),' the Egg Markets Overview said.
The Hill
5 hours ago
- The Hill
Main Street deserves access to private markets
On the campaign trail, President Trump promised to revive the American economy and deliver greater opportunity for working families: to create 'a middle class that is once again the envy of the entire world.' Making that pledge a reality starts with tax cuts and deregulation but doesn't end there. It will require policymakers to reconsider who has access to wealth-building opportunities. Unfortunately, far too many Americans lack the tools available to the wealthy. More Americans deserve the opportunity to invest in private markets, and that's something Trump's administration can provide. The Securities and Exchange Commission has a unique opportunity to help level the playing field. It has been more than 30 years since the agency reviewed the regulatory framework for retail funds created by the Investment Company Act of 1940. By modernizing these outdated rules and expanding access to private markets, the Securities and Exchange Commission can help put Main Street investors back on equal footing with Wall Street and big corporations. Over the last decade, private markets have exploded, growing to around $25 trillion since 2012. Big institutions like pension funds, endowments and hedge funds have long used these investments to earn higher returns than what's available in the stock market. But for everyday Americans? This opportunity to invest is largely off limits. Outdated regulations are primarily to blame. They assume retail investors can't handle the risks of private markets. In reality, institutional fund managers already invest responsibly in private markets on behalf of workers like teachers and police officers. Like any investment, private markets require proper safeguards. But with the right protections in place, there's no reason similar access couldn't be extended to individual investors. This is where the Securities and Exchange Commission can step in. Consider the current restriction that prevents closed-end funds from allocating more than 15 percent of their assets to private funds. This artificial cap locks Main Street investors out of opportunities their pension funds already enjoy. Removing or relaxing this limit — while maintaining proper oversight — would be a good first step toward giving Main Street access to wealth-building opportunities readily available to Wall Street. Closed-end funds are uniquely positioned for private investments, but because closed-end funds often trade a discount to their net asset value, short term arbitrageurs often seek to 'open' fund to capture the spread between traded value and asset value. Such activists seek to profit at the expense of long-term investors. It would help to design governance structures and legal frameworks that ensure the stability funds need to focus on long-term value. This is not to suggest we shouldn't have responsive governance and transparency for all investors, but we should encourage and enable long-term thinking and investing. These common-sense reforms are necessary to remove the barriers that have left the middle class locked out of a key financial tool. We should update old rules to reflect today's economy and empower more Americans to build wealth in the same way institutions and the wealthy already do. If the Trump administration wants not only to support but also to build up the middle class, the solution goes beyond creating good jobs and stimulating economic growth. It will also involve expanding access to the financial opportunities that create long-term wealth. It's time to finally level the playing field and make private markets available to everyone. Vikram Mansharamani, chairman and CEO of Goodwell Foods, is a former lecturer at Harvard and Yale and has served on the boards of closed-end funds, publicly-traded companies, and start-up technology firms.
