See full story via Detroit Free Press: Financial duress crops up in ways you might not expect now that we’ve been dealing with scorching hot inflation, sky high gas and grocery prices and too many uneasy feelings about whether the next recession is here or not.
Inflation might have peaked in July, as some believe based on today’s figure. The Consumer Price Index was up 8.5% for the 12 months through July. That’s better than June when the year-over-year CPI had increased 9.1%.
The bright spot was that the month-over-month number dropped to 0% in July on a seasonally adjusted basis after rising 1.3% in June, the U.S. Bureau of Labor Statistics reported today.
But it doesn’t matter much to those who find themselves juggling costly bills, higher prices and mounting credit card debt — on top of economic uncertainty. Inflation is everywhere and still very high.
A Detroit area small business owner the other day brought in his Rolex to pawn in order to make a $5,000 payroll at his company, according to Les Gold, owner of American Jewelry and Loan, which opened in 1978 and was later featured on the cable TV reality show “Hardcore Pawn” — located in the heart of Detroit’s 8 Mile.
“His people who owed him money didn’t pay him,” said Gold.
Young families and small business owners who cannot make ends meet lately, Gold said, are among many newer customers now turning to alternative lending at pawn shops to generate a little extra cash to pay bills.
“In our Detroit location, where we normally are, we’re seeing a lot more people coming in that we’ve never seen before,” Gold said.
Across town, a 40-year-old mother took out a $30,000 personal loan online via Goldman Sachs at fixed 8% interest recently to deal with her maxed out credit card debt, debt that built up covering higher expenses for four daughters on one paycheck. Her loan also helped with bills that included child care expenses and lawyer fees associated with going through a divorce.
“I used most of it to pay off my cards and I have a little left that I’m trying to use for school supplies, which is what I’m trying to do today,” said Dorey Tabor, who had that school list in hand Monday at the Walmart parking lot in Warren on Van Dyke.
Back-to-school spending costs $1,000 for one family
Grumbling about record high gas prices eased a bit, as prices at the pump fell back under $4 or so at many metro Detroit stations. In Michigan, the average was $3.98 a gallon early in the day on Aug. 10, according to GasBuddy data.
Nationwide, the average price for regular gas fell to $3.987 a gallon early in the morning on Aug. 10, down 70 cents a gallon in the past month, according to GasBuddy. Even so, prices are up an average of 80 cents a gallon from the $3.189 average nationwide a year ago.
The highest recorded average nationwide was $5.034 a gallon on June 16, according to GasBuddy data.
Even so, consumers feel financially stressed out.
The problem: Life goes on but it’s getting increasingly more costly and complicated for many to figure out how to deal with the road bumps along the way.
Tabor, the mother of four, relied on credit cards for the past year to pay for gas, groceries and other necessities for her four daughters, the youngest in kindergarten.
“Just basic food prices, it’s crazy to just barely have anything in your cart and it’s like $150,” she said.
She’s cut back on the kind of meat she buys to hold down costs, turning more toward frozen processed meat on sale.
“I can’t afford fresh red meat,” she said. “I still try to do the fruits and vegetables.”
She estimates that it’s going to cost her another $1,000 for back-to-school shopping and supplies for her four children, including a $400 laptop that’s required for one daughter.
“Every class has their list of everything they want us to bring. They want name brands, Elmers and Crayola and they’re the priciest,” she said.
