Rising prices, flat paychecks worry consumers

“The price of food is going through the roof,” he said. “The only thing that is staying the same is my salary.”

Keeping up with climbing costs is getting harder as paychecks barely budge. The Commerce Department reported on Monday that incomes edged up just 0.1 percent in June. Meanwhile inflation rose 0.8 percent, according to a measure tied to consumer spending — the second-largest jump since 1981.

‘A serious cash flow issue’
Besides inflation, growing concerns about the difficult job market and plummeting home prices also contributed to the belief of 72 percent of the public that the country is already in a recession, according to the Pew study issued last week. Of those surveyed, 73 percent surveyed said good jobs are tough to snag, compared with 55 percent a year ago. More than 55 percent said they have seen home prices fall in their region over the past year, compared with 41 percent in a February survey.

Economists are still hashing out the state of the economy. Some indicators point downhill: The unemployment rate struck a four-year high, and home prices are still in a slump.

But the gross domestic product did grow, although slowly, at 1.9 percent last quarter. Not so in the last quarter of 2007, when the GDP turned negative. One widely accepted definition of  recession is that the gross domestic product turns negative for at least two quarters in a row.

While gasoline stands out as the necessity consumers can least afford, more people say they are just struggling to put food on the table. About 68 percent surveyed in the Pew study said they scramble to cover the runaway cost of gasoline. And 38 percent say it is difficult to afford food, compared with 27 percent in February.

Kim Wargo, a saleswoman for pharmaceutical packaging, says she and her husband have good incomes but are cutting back due to “a serious cash flow issue.”

“Gas, food, utilities are at an all-time high with no dramatic increase in our pay scale,” said the 41-year-old from Pittsgrove, N.J. “We limit our dining out to one night per week, and grocery shopping has been limited to needed items.”

Despite the public’s pessimistic view on the economy, many believe that something can be done to rescue the country from the economic rut. Almost three-quarters surveyed in the Pew study said their greatest worry — raging inflation — is manageable. Can the federal government fix the overall economy? Just shy of 70 percent say yes.

The economy overarchs as the nation's biggest problem, according to the Pew study. Compared to 17 percent who worry most about the war in Iraq, more than 60 percent, up from 34 percent in January, said the economy is their chief concern.

Also in msnbc.com business Answer Desk: The risks of investing extensively in gold Your Career: The repercussions of expressing your faith Interactive: 10 cars we’re looking forward to in 2010 ‘Reaching out’ and the other worst buzzwords of the year   Video: Existing home sales make an unexpected jump

MORE FROM EYE ON THE ECONOMY

Eye on the Economy Section Front

Is your bank in trouble? More report bad loans Inflation stays in check as housing starts rise Economy gets tidings of hope for holidays One year later, Madoff case is far from over NYT: U.S. forecasts smaller loss from bank bailout Battle lines forming over TARP extension Obama talks of jobs plan in weekly address Productivity rises by largest amount in 6 years Bleak job scene poses challenge for Obama 'Problem' banks at highest level in 16 years Eye on the Economy Section Front   Add Eye on the Economy headlines to your news reader: