Inflation Is Up, And Americans Feel Even Worse About The Economy

At the end of 2025, Debt.com’s president wrote a column titled “My Only Prediction for 2026: Life Will Cost You More than 2025.

“Most people don’t understand the cumulative pain that inflation inflicts,” Debt.com president Don Silvestri wrote in December 2025. “They do, however, know something is wrong.”

Nine months later, the numbers show he was right. The Bureau of Labor Statistics reported its Consumer Price Index rose 3.4% over the past year in August, the same pace as July.

Most of the damage was from gas prices: they jumped 3.9% for the month alone and are up 27.4% from a year ago.

And Americans expect it to get worse.

A separate University of Michigan survey found consumers now expect inflation to run at 4.6% over the next year, up from 4.0% in August.

“Year-ahead expectations for both personal finances and business conditions plunged,” said Joanne Hsu, the survey’s director. “With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come.”

Inflation drives up credit card debt

Americans haven’t caught much of a break from inflation over the past several years. Debt.com surveyed 1,000 people in March 2026 about how inflation is affecting their credit card use.

“Study after study has shown that when prices rise, so do our credit card balances. It’s not hard to figure out why,” Silvestri said. “Most of us don’t have a lot of slack in our household budgets, and credit cards are the easiest form of financing we have.”

The share of those carrying $10,000 or more in credit card debt rose from 22% in 2024 to 29% in 2026. Inflation has caused many to use plastic more than before:

• 46% said inflation caused them to max out their credit cards
• 55% started using credit cards to make ends meet
• 57% said they’re carrying a larger balance due to inflation

“When nearly half of those who have maxed out their cards owe more than $10,000 and a staggering 15% are carrying balances over $30,000, we aren’t just looking at a budgeting issue; we’re looking at a financial emergency,” says Howard Dvorkin, CPA and Chairman of Debt.com. “At these levels, the interest alone can become a barrier to financial stability.”

Inflation also drives down mental health

Inflation has been taking its toll on more than finances. As far back as May 2025, Debt.com released a survey showing 66% of Americans felt inflation was negatively impacting their mental health

The emotional strain showed up in several ways:

• 75% said they felt stressed
• 74% reported feeling anxious
• 38% felt sad
• 33% described feeling hopeless
• 23% said it affected their focus at work
• 17% lost sleep
• 7% said they couldn't eat.

“Inflation is more than an economic issue — it’s a mental health issue. When prices go up, and paychecks don’t, Americans feel the pressure not just in their wallets, but in their emotional well-being,” Dvorkin says. “Our mental health is deeply connected to our financial health. The more we talk about this and give people resources to manage their debt, the more we reduce the emotional burden of money stress.”