Vietnamese in US struggle as inflation bites

The resident of Illinois in the U.S. says: "It was not this expensive a few months back; prices are rising faster than my income."

Her family has not dined out for many months now, she says.

"Everything is so expensive. A bowl of pho at a Vietnamese restaurant here costs me $20. I can make a whole pot of pho for $20 at home."

Fuel prices have also risen in the U.S.

Hoa of California feels stressed every time she has to fill up her car because gasoline has become expensive.

"The prices of all goods and services have gone, especially food and gas. Gas has gone up the most. Not too long ago, it would cost me only $40-45 to fill up my car, but now I have to spend $70-80."

She and her family have completely given up their annual vacations.

"We have to tighten our budget and only buy necessary items. We also have to cut back on going out or traveling. This year we are not traveling anywhere."

Prices are rising across the U.S., where 2.3 million Vietnamese people currently live.

Data recently released by the Bureau of Labor Statistics shows that the consumer price index (CPI) went up by 3.5% year-on-year in March.

This outpaced February’s 3.2% increase and was the highest inflation rate seen in six months.

Energy and shelter, as the bureau refers to housing, emerged as the primary drivers of the inflationary surge last month.

The consumer price index accelerated at a faster-than-expected pace in March, pushing inflation higher and likely dashing hopes that the Federal Reserve will be able to cut interest rates anytime soon, according to CNBC.

The CPI, a broad measure of goods and services costs across the economy, rose 0.4% for the month, putting the 12-month inflation rate at 3.5%, or 0.3 percentage point higher than in February, the Labor Department’s Bureau of Labor Statistics reported

The rising prices are affecting business owners in the U.S.

Ngoc Son, owner of a nail salon in Hawaii, says his shop received 50% fewer customers last month than the beginning of the year as people are cutting back on travel and beauty treatments.

"My salon is located near some of the region’s largest resorts and hotels. About 90% of our customers come from these establishments. Since people started limiting their spending, the salon's earnings have nearly halved."

His employees are also feeling the pinch as he had to reduce their working hours to cut costs.

"We used to open seven days a week, now we only work five. Since the workers have not given up on the salon, I too must try my best to keep it open."

Cao Hung, who runs a Vietnamese grocery store in California, says his sales are 30% down for the year.

"Vietnamese products exported to the U.S. are already expensive because the shipping costs are very high. People here are trying to save money, and so these goods are not selling well. I would say a 20-30% decrease in revenues is normal for most stores."

To survive, Hung plans to move his business online.

"My prices are too high to compete with cheap Chinese products. I am considering selling online because it does not cost as much [as a physical store], and I can just focus on marketing. The online customer base is much larger."

Thankfully, Vietnamese living in the U.S. receive support from both the government and charitable organizations.

Son explains: "The government has set up a marketplace offering a variety of free food items for individuals in need. Those facing financial difficulties just need to present their ID to buy food without spending money."

Thanh says: "Here [in Illinois], there are many charitable organizations that provide food assistance. For those who are really struggling, they can apply for the government’s food stamp program. If they meet the eligibility criteria, they may receive several hundred dollars a month, which is more than enough to survive."

Since mid-2023 the central bank has maintained interest rates at high levels of 5.25% to 5.5% to push the inflation rate down to 2%.

With recent data showing higher-than-expected inflation, it seems unlikely the rates will go down any time soon.

Policy planners at the bank have expressed an intention to cut interest rates three times this year, but Vincent Reinhart, a former economist at the Federal Reserve, thinks the first rate cut might not occur until September.

In the meantime, Vietnamese living in the U.S. remain optimistic that things will soon improve.

"It may be difficult to lift an entire economy in just a few months, but I have high hopes that things will get much better by 2025," Hoa says.