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Yahoo Finance’s Rick Newman breaks down the findings in the new Yahoo Finance-Harris poll.
ALEXIS CHRISTOFOROUS: I want to switch gears here and talk about inflation, which we know the markets seem to be preoccupied with these days. Consumers are certainly feeling the heat of rising prices. And it is having an impact on household spending. That's according to a new poll out by Yahoo Finance and the folks at Harris. We've got our senior columnist Rick Newman joining us now to break this one down for us. So, Rick, according to the survey, what are we paying more for? Let's start there. What are we paying more for these days?
RICK NEWMAN: There's actually an interesting breakdown. I mean, the headlines today are we've got a surge in inflation with 4.2% being the year over year rate now. That's a big increase from earlier this year. But there's a big difference between goods and services. And in our poll, people noticed this. So the majority of people in this poll-- it's around 2/3-- are saying, yes, they have seen goods prices going up. But it's a lower portion that say they're seeing services prices going up.
And when I look at the actual inflation data, that is the case. So for goods-- and that would be both durable goods like cars and appliances and non-durable goods like household items, average annual inflation is up 7%. So goods are up 7% year over year. But for services, it's only around 2.5%. And I think if you just look at the coronavirus economy, that explains why people are buying tons of stuff. They're having a lot of it delivered. They're doing curbside pickup. But they're not going out as much. And that's why demand for services is actually kind of soft.
KRISTIN MYERS: So, Rick, obviously, we've heard investors talking a lot about the inflation concerns. And I don't know if so much the everyday average person goes around having conversations, talking about how much inflation is rising. What data did you get from this survey that shows that folks, frankly, are actually concerned about some of the rising prices that they're seeing and how much their money, their salaries, their paychecks can go in order to pay for some of those goods and services?
RICK NEWMAN: Oh, I think people have a lot of conversations about inflation. It's a real pocketbook issue. I mean, the one thing we know that really hits the consumer psyche is gas prices. Gas is up considerably. And car prices, of course, are probably up more than just about anything. So, in our survey, 53% of people said their household income is not keeping up with inflation. So they're either earning less or if they're earning more, they're not keeping up with the pace of inflation.
And that's-- you know, that's a problem for President Biden because he's trying to get us back to normal, as he says. We found that 26% of people say that they're worse off than a year ago. And only 16% say they're better off. So I think that tells you, when Biden says we have a long way to go to get out of this hole we're in, the survey data and a lot of the economic data do support that.
ALEXIS CHRISTOFOROUS: So, Rick, if you look at some of the things we're not paying more for, I found it to be quite interesting-- things like healthcare, medical insurance, even things like our phone and internet. What gives there? Why are those things not seeing price rises in the way some other things are, do you think?
RICK NEWMAN: That definitely jumped out at me, too. So one thing that people do not think is getting more expensive is healthcare, believe it or not. I mean, this has just been a perennial bugaboo for so many family budgets. But more people told us in our survey that the cost of healthcare stayed the same during the last year or was stable than told us that the cost of healthcare went up. And when I looked up the data again, these consumers are right. Healthcare inflation during the last year was less than 2%.
I know some people listening probably can't believe it. But when you talk about the cost of insurance and also out-of-pocket expenses, it's just not something that has gone up for once. I think part of the reason is probably people are just not going to the doctor as much for non-emergency care. So, again, softer demand because people don't want to go out. That could change in coming months.
And yes, you're right. Phone bills and internet bills, people also say, nope, not really seeing much of an increase. So, for as bad as the headline news and as terrifying as the gas price might be to some people, the gas price hikes, at least, consumers are getting a few breaks along the way.
ALEXIS CHRISTOFOROUS: And what do you make of this? Something else I thought was interesting in the survey was that it sort of broke down by gender-- I mean not by gender-- by generation, meaning that Gen Z-ers are saying they really don't feel the price hikes. Why do you think that is?
RICK NEWMAN: Don't know. Our survey doesn't tell us. But we can speculate. So younger Americans-- and those would be in the age category 18 to 34-- yes, they're not noticing inflation as much as older people, possibly because they're living with their parents, and they're splitting costs. Or maybe they're not even paying for that Netflix account. And they're not noticing when the price goes up.
ALEXIS CHRISTOFOROUS: That makes sense to me. All right, I like what you're inferring there. Rick Newman, thanks for bringing that survey to our attention.