Millennials' life stage means they're suffering the most from rising prices

• Millennials are experiencing inflation more than any other age group, per a Wells Fargo study.
• They're spending more on two areas that have seen the biggest price hikes: cars and furniture.

Inflation is burning a hole in everyone's wallets, but millennials are among those feeling it the most.

That's according to a study by Wells Fargo that analyzed the Consumer Expenditure Survey to determine which cohorts have seen the steepest rise in cost of living. An age breakdown showed that millennials experienced the highest inflation: 6.8% for the 25 to 34 age group and 6.9% for the 35 to 44 group (the latter also includes the youngest Gen Xers).

Inflation overall seems to have hurt younger generations the most. Gen Z didn't fare much better, seeing a 6.7% rise in prices. The 65-plus age group, comprised of boomers and Silent Gen, suffered the least with a 5.8% increase.

That millennials are being hardest hit by price hikes has a lot to do with their spending habits, as they're shelling out more for big ticket items thanks to the life stage they're currently in. It's the latest way the economy has shortchanged the generation, who have already struggled with two recessions before the age of 40 and massive student loan debt.

Wells Fargo senior economist Sarah House told Insider that millennials are more likely to spend on used and new cars as well as gas, both of which have seen the steepest rise in prices the year through December. Millennials took over the car market during the pandemic, all while cars became the strongest driver of inflation as the economy reopened.

Millennials are also spending more on housekeeping goods and home furnishings since many are buying homes for the first time, House added. They're leading the pandemic homebuying spree, now tasked with more living space to furnish. The demand for homes has become so heated that it morphed into a housing crisis, boxing many aspiring first-time homeowners out of the market. Some turned to buying fixer uppers as a more affordable option, partaking in the home improvement boom.

Even those who didn't buy a home turned to DIY renovation as a quarantine hobby, which became new form of discretionary spending during the pandemic for wealthy millennials, who no longer had travel and brunch to spend on.

But many of the costs involved with renovations such as wood and big appliances have been hijacked by the series of shortages and shipping delays hitting the economy, sending up the price for materials from lumber to semiconductor chips.

Unfortunately for millennials, not much of their spending goes toward the areas that have mostly escaped inflation. "On the other side of the equation, millennials spend relatively less on some of the areas that have seen the slowest rise in prices over the past year, such as healthcare, which has held down inflation rates for other groups more than millennials," House said.

But the economy is continuing to heat up, with inflation surging again through January at a 40-year-high. And millennials aren't the only ones hurting.

The Wells Fargo report also found that middle-income consumers and Hispanic and Latino consumers have experienced steeper increases in inflation. Ryan Sweet, a senior economist at Moody's Analytics, told The Wall Street Journal that the average American household is paying $276 more a month.

The Fed has hinted at raising interest rates as soon as March in an effort to cool down prices. But that still comes at a cost, in the form of much pricier credit cards and loans. Considering all the big spending involved in millennials' current life stage, it seems likely they'll suffer from that, too.