Inflation Heating Up in Midwest and Mountain States
The price increases have squeezed household budgets for millions of Americans.
It appears that not all states are sharing the inflation burden equally.
It was recently reported that the Consumer Price Index (CPI) surged 7.5 percent in January year-over-year—the fastest rate seen since February 1982. And the Producer Price Index (PPI)—which tracks average price changes the country’s producers get paid for their goods and services over time—skyrocketed 9.7 percent over the same period.
However, the increases were found to be steeper in the U.S. region that encompasses the states of Montana, Wyoming, Idaho, Nevada, Utah, Colorado, Arizona, and New Mexico. Prices there were discovered to have surged a whopping 9 percent.
As reported by FOX Business, there were “other states … also experiencing inflation that’s well above the national average.”
The states that eclipsed 7.9 percent increases included North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa, Maryland, West Virginia, North Carolina, South Carolina, Georgia, Florida, Texas, Oklahoma, Louisiana, Arkansas, Missouri, Illinois, Wisconsin, Indiana, Michigan, and Ohio.
The price increases have squeezed household budgets for millions of Americans. According to a new Moody’s Analytics analysis, the average American is being forced to pay an extra $276 a month on goods and services because of rising inflation.
Front-Load Rate Hikes?
Moreover, the current predicament has resulted in growing calls for the Federal Reserve to take quick action.
Earlier this week, St. Louis Federal Reserve Bank president James Bullard said that such high-inflationary pressures being witnessed across all sectors may force the Federal Reserve to step up its campaign to get prices back under control.
This means he would like the central bank to “front-load” its rate hikes to quickly remove accommodation and get inflation to more manageable levels.
“This inflation we’re seeing is very bad for low and moderate-income households. Real wages are declining. People are unhappy. Consumer confidence is declining. This is not a good situation,” Bullard told CNBC.
“We have to reassure people we are going to defend our inflation target and we are going to get inflation back to 2 percent,” he continued.
Americans to Be Hurt by Rising Rates?
However, some economists are warning that raising rates too quickly will only hurt Americans in the long run.
“The people you’re drafting into the fight against inflation when you raise interest rates and slow the economy are the most vulnerable,” Robert Reich, the former U.S. secretary of labor under President Bill Clinton and a professor of public policy at the University of California, Berkeley, told CNN.
“The purpose of raising interest rates is to take the air out of the sails of the economy. If it works, you are by definition are going to have fewer jobs. Even small increases in interest rates, if they have the desired effect, will cause job losses and wage losses,” he added.
Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.