if you want to see the everyday ways inflating prices crowd someone’s mind visit jill sanfilippo walk up her steep quartermile long driveway which needs a repave three years ago she got a 10000 quote for repairs in the spring she got two quotes for 12000 the project’s on indefinite hold so is a painting job that was quoted in 2019 for 3000 and now for 4700 now knock on sanfilippo’s door the new jerseybased corporate paralegal is always happy to feed visitors so a wellstocked fridge and pantry is important especially considering she’s raising 14yearold boy with a serious appetite compared to a year ago she still spends around 500 to 600 a month but for less food no more impulse buys for a little bag of candy or an extra bag of chips but she is still buying the frozen pepperoni pizzas for her son that previously cost 399 and are now priced at 599 so when the aforementioned knock comes sanfilippo says she gets “a little bit of anxiety i don’t know what i have that i can offer them …it doesn’t sound dramatic but for someone who loves to feed people and have a back up it’s difficult” sanfilippo 50 spoke to marketwatch following new government data showed the pace of inflation hit a 31year high in october propelled by swelling rent grocery and gas costs expanding prices needle at sanfilippo “getting through the pandemic and making sure basics and necessities are met i’m just not feeling comfortable i’m not comfortable enough i know for sure that everything’s going to stay at an affordable range” inflation puts a toll on a person’s wallet but it can also impose a psychological one discomfort anxiety scaleddown spending these are some of the ways people may react to upward drifting prices according to people studying the intersection of economics and psychology if high inflation is sticking around at least for some amount of time millions of americans will have to learn to live with those feelings of insecurity “temporary or not that’s an experience to people and it will leave its mark” said ulrike malmendier an economist at the university of california berkeley who has studied what prolonged exposure to inflation do people’s spending habits many people are paying attention the cost of goods and services are the best gauge of the economy’s performance according to 49 of people in a yougoveconomist poll of 1500 people this month that was the no 1 response more than double the 21 who said job reports and unemployment rates once at double digits in spring 2020 were the best measure people buy fewer expensive items rather than switching them out for cheaper ones sanfilippo’s reaction to her rising costs is common for someone like her who pays attention to her household budget said princeton university psychology professor eldar shafir the coauthor “scarcity why having too little means so much” when faced with financial pressures shafir said people don’t always completely swap out or substitute expensive items for less expensive ones which might seem like the most obvious thing to do they often just buy less of the costliest items “it’s not a carefully adjusted replacement” he said making sacrifices can actually have the opposite effect instead of making people feel better it can leave them with a feeling of scarcity and anxiety shafir added meanwhile they cut back on their mostly costly pastimes “they basically stop doing the thing that costs more” he said but this too leaves them with a feeling that they’re missing out on the good things that life has to offer the pandemic spending splurge appears to be waning gross domestic product growth slowed to a 2 annualized rate in the third quarter that missed the 28 forecast and was below the second quarter’s 67 growth rate what’s more consumer spending increased 16 a fraction of the 12 consumer spending growth in the previous three months in september inflationadjusted consumer spending increased 03 after a 06 increase in august wages and salaries climbed 15 in the last quarter resulting in a 54 increase in the past 12 months but they only rose 06 when adjusted for inflation according to department of labor data for sanfilippo the pause on big purchases like the 12000 repaved driveway is about selfprotection given her uncertainty about inflationary pressures “12000 is not a debt i want to worry about taking on at this point i’m nervous” when will this period of high inflation end treasury secretary janet yellen said last month that she doesn’t expect inflation to return to a normal rate until at least the middle of next year but that doesn’t mean the us is losing control of inflation “americans haven’t seen inflation like we have experienced recently in a long time but as we get back to normal expect that to end” she told cnn yellen said inflation should fall back to around the 2 target area next year still approximately a large majority 78 of people expect inflation to worsen in 2022 according to an allianz survey last month roughly seven in ten people said rising costs would crimp their purchasing power in the coming months will high inflation have longterm consequences in consumer behavior people only adjust their spending habits when prices rise for extended periods of time and tend to respond to the prices people encounter every day rather than news headlines or macroeconomic data malmendier said in one study malmendier crossreferenced years of responses on inflation expectations with years of data on household finances households that lived through high periods of inflation “are significantly more likely to take out new fixedrate mortgages and to refinance at fixed rates” the study concluded but what about the people who haven’t lived through high inflation it may be that the “memory of macroeconomic history is lost as new generations emerge whose subjective beliefs are shaped by relatively recent experience” she concludes in other words people will start spending again like there’s no tomorrow some people react quickly and perhaps impulsively for example investors are flocking to exchange traded funds with exposure to us treasury inflationprotected securities meanwhile some analysts say inflation will just keep powering urges in value in cryptocurrency like bitcoin btcusd  but those investment plays are happening far from grocery stores and gas pumps where people like sanfilippo receive constant reminders of rising costs “inflation and money issues have only added to the stress of the pandemic i think for everyone” she said “it’s the next challenge and it feels like it’s never ending”