While average inflation in the US in January reached a 40-year high of 7.5%.Utah and other Mountain West states saw the highest price growth in the country last month for the year, reaching 9%.
Data on the consumer price index from the US Department of Labor prices for goods and services in Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming jumped 0.9% compared to December 2021 and for several months tracked well ahead of the national average.
A Deseret News / Hinckley Institute poll conducted in late January showed more than 90% of Utah residents are concerned about inflation and most believe the price increase will not go away any time soon.
And on Friday, Salt Lake Chamber has released new data December 2021 saw a drop in consumer confidence among Utah residents and was more than 20 percentage points lower than in March 2021. The House report also notes that the fall in Utah in December was the first time that confidence among state consumers has fallen while the U.S. average has risen.
Average national prices for a wide range of goods and services accelerated from December to January – and not just for goods directly affected by the pandemic. The cost of renting an apartment rose 0.5% in January, the fastest pace in 20 years. Electricity prices rose 4.2% in January alone, the sharpest rise in 15 years, and rose 10.7% from a year earlier. Last month, household furniture and accessories rose 1.6%, the biggest monthly increase since 1967.
In January, food expenditures rose by 0.9% due to higher prices for eggs, cereals and dairy products. Air tickets went up by 2.3%. Prices for new cars, which jumped during the pandemic due to a shortage of computer chips, did not change last month, but rose 12.2% over a year ago. Rising prices for new cars, in turn, accelerated the prices of used cars; they rose 1.5% in January and rose a dizzying 41% from a year ago.
In the face of record-high inflation acceleration, Federal Reserve policies are signaling that they will accelerate the strengthening of credit if inflation does not slow down in the coming months.
Most officials agreed that a faster rise in interest rates would be needed “if inflation does not decrease,” as expected by the Fed’s policy committee. to the minutes of a central bank meeting in late January on political issueswhich were published on Wednesday.
The minutes underscore the urgency that the Fed, led by Chairman Jerome Powell, is feeling to contain the sharp surge in inflation that has lasted longer and spread to more industries than politicians expected. Back in December, the Fed predicted that inflation, based on their preferences, would fall to an annual rate of 2.6%. Now it is 5.8%.
Most analysts expect Fed officials to raise that forecast at their next meeting in mid-March to reflect the acceleration in consumer prices. Inflation has peaked in four decades, shattering household budgets and destroying wage growth benefits.
Fed officials are expected to raise their base short-term rate several times this year, starting in March. But economists are increasingly suggesting that the Fed has waited too long to unleash its tools to fight inflation.
“The Fed is behind the curve,” said James Orlando, senior economist at TD Economics. “It should catch up, which will hopefully cool some of the inflation foam.”
At a news conference after Jan. 26, Powell said Fed officials would be “submissive” and “smart” in their betting decisions. He also said then that politicians “choose to raise the rate of federal funds at the March meeting, believing that the conditions will be appropriate.”
Even amid the challenges posed by rising prices and undermining consumer confidence, Utah experts say the state’s leading economy is well located to overcome current circumstances and stay alive.
“The economy is reaching its current level, unemployment is reaching historic lows of less than 2%, and labor shortages are limiting our ability to grow,” said Natalie Gohnur, director of the Kem S. Gardner Institute for Policy at the University of Utah. Friday’s press release. “This is a healthy restoration of the balance in the economy – as people continue to join the workforce and industrial sectors re-calibrate – these are generally positive signs.
“Utah is still having bigger problems with supply chains, constant inflation and pandemic problems, but to a lesser extent than in other states. I am optimistic that we will continue to adapt and govern the nation when we emerge from the pandemic.” .
Contribution: Associated Press