Utah economy

Inflation rate: US inflation drops slightly but gas and groceries remain up

Inflation in the United States slowed slightly in April, reaching an annual rate of 8.3%, according to a report from the United States Department of Labor published on Wednesday, although many categories of consumers, including basic necessities, recorded double-digit increases more than a year ago.

April’s average rate was lower than the 8.5% year-over-year rise in March, which was the highest rate since 1981.

While a drop in gasoline prices in April helped lower the headline inflation rate, prices at the pumps rose in May and, according to an AAA report on Wednesday, the average price per gallon of fuel ordinary in the United States was at an all-time high. high time of $4.40.

The Mountain West states, which include Utah, continued to have the highest regional inflation in the country, with average prices for goods and services rising 9.8% in April from 10.4% in March.

The Labor Department report noted that increases in the indexes for housing, food, airfare and new vehicles were the main contributors to the seasonally adjusted increase in all items. The food index rose 0.9% during the month, while the home food index rose 1%. The energy index fell in April after rising in recent months. The gasoline index fell 6.1% during the month, offsetting the increases in the natural gas and electricity indexes.

Grocery prices rose 10.8% from a year ago, gasoline prices rose an average of 43.6% from April 2021, and housing costs rose 5 .1% over the past year.

Prices for new and used vehicles also continue to climb, up 13.2% and 22.2%, respectively.

Beyond the financial strain on households, inflation poses a serious political problem for President Joe Biden and congressional Democrats in the midterm election season, with Republicans saying the 1 $.9 trillion from Biden last March overheated the economy, flooding it with stimulus checks, increased unemployment aid payments and child tax credits.

On Tuesday, Biden sought to seize the initiative and declared inflation “the No. 1 problem facing families today” and “my top national priority.”

Biden blamed chronic supply chain groans related to the rapid economic rebound from the pandemic, as well as Russia’s invasion of Ukraine, for triggering inflation. He said his administration will help mitigate price hikes by reducing the government’s budget deficit and promoting competition in industries, like meatpacking, that are dominated by a few industry giants.

Yet further disruptions overseas or other unforeseen issues could still push US inflation to new highs. If the European Union decides, for example, to cut off Russian oil, gas prices in the United States will probably accelerate. COVID lockdowns in China are compounding supply issues and hurting growth in the world’s second-largest economy.

The unexpected persistence of high inflation prompted the Federal Reserve to embark on what could become its fastest series of interest rate hikes in 33 years. Last week, the Fed raised its benchmark short-term rate by half a point, its largest increase in two decades. And Powell signaled that more rate hikes just as steep are to come.

The Fed Powell is looking to accomplish the notoriously difficult – and risky – task of cooling the economy enough to slow inflation without causing a recession. Economists say such an outcome is possible but unlikely with such high inflation.

Since last summer, Utahns have registered growing concerns about sweeping price hikes on goods and services, sentiment tracked by a monthly poll conducted by Deseret News in partnership with the Hinckley Institute of Politics.

In a statewide poll conducted by Dan Jones & Associates March 9-21 of 804 registered Utah voters, an overwhelming majority of respondents, 93%, said they were very or somewhat worried about inflation, a number that matches what pollsters heard from Utahns in a February survey.

Survey participants also raised concerns that household incomes simply aren’t keeping up with rising costs, and most said they haven’t seen any significant increases in their paychecks in course of the past year.

While 38% of respondents said they had seen an increase in the past 12 months, 62% said their income had stayed the same, and 75% of respondents said their salary just wasn’t keeping up with inflation. .

The same March survey also asked Utah residents who they believe were responsible for the rise in inflation. While respondents were almost united in expressing their concerns about large-scale price increases, they gave more varied responses to the question of who is to blame.

It’s perhaps unsurprising that partisanship played a role in the March 9-21 poll of 804 registered voters. A plurality of respondents, 33%, pointed the finger at the Democratic Party when asked “who or what is to blame for inflation”.

Republicans fared much better, winning just 6% in the blame game, while the Federal Reserve was seen as slightly more responsible at 8%. U.S. corporate pricing and policies were the source of inflation for 17% of survey participants, and 23% believed rising costs could be attributed to the economic fallout from COVID-19.

The poll results have a margin of error of plus or minus 3.45 percentage points.

Contributor: Associated press

Mary Cashion

The author Mary Cashion