Inflation in the Twin Cities metro hit another record last month as fuel and food prices continued to rise.
The consumer price index for the 16-county region jumped 8.2% in the past year, according to federal data released Tuesday. That’s a little less 8.5% national inflation rate Reported on the same day by the Bureau of Labor Statistics.
Prices are expected to continue rising in a range of commodities this year, but some economists believe the rate of inflation is expected to ease in the coming months as annual comparisons become less dramatic.
The Bureau of Labor Statistics tracks Minneapolis-St. Metro Paul area prices have been on a bimonthly basis since 2017, and the March inflation rate was the highest recorded in that short period. National inflation is at its highest rate in more than 40 years.
After early morning stock gains, investor optimism about new Fed data faltered with markets closing lower on Tuesday.
The cost of food production has risen due to increased costs of transportation, labor and raw materials – this is inflation It is passed on to consumers.
“This is very difficult for families that are dealing with tight budget constraints and have little flexibility,” Fed Governor Lyle Brainard said at a Fed event in Minneapolis last week. “For low-income families, where more than three-quarters of their income is taken up by necessities, when the price of those necessities goes up, they can really do very little to replace or mitigate.”
As for food prices, shoppers in Minnesota saw another month of big price increases, albeit less sharply than the state as a whole. On an annual basis, grocery prices rose 10.3% nationwide and 7.3% around the Twin Cities in March.
But the prices of some consumables – such as cereals, bakery products, and alcohol – have risen here at a faster rate than the national average.
“These inflationary challenges run through the supply chain and come to the grocery store,” said Jimmy Pful, president of the Minnesota Grocery Association. “We are very sensitive to what is happening to our customer chain, and we try to find a more direct supply chain when there is availability.”
Pfuhl said shoppers should check their stores, stick to a list and monitor in-store deals to keep grocery bills in check.
“It’s also important to make sure you still support your local grocer – you want it to stay viable too,” she said.
Regional restaurant prices also jumped 8.8% last month, more than the national increase of 7.1%.
The war in Ukraine is expected to continue to put pressure on food prices this year. Both countries are major grain exporters, but the violent attacks on Ukraine and economic sanctions on Russia contributed to this Bottlenecks and uncertainty in global trade.
The rising cost of natural gas, a major component of fertilizers, is also driving up food prices.
Higher energy prices are a major cause of inflation across categories, and a number of factors have contributed to the continuation of the sticky shock at the pump. Here again, the Russian invasion of Ukraine rattled global markets, sending oil prices skyrocketing in the last month.
Renewed demand for fuel as pandemic restrictions erode is also outstripping supply.
Gas prices rose 40% year-over-year in the Twin Cities in March, compared to nearly a 50% increase nationwide.
According to GasBuddy, gas prices in Minnesota hit their highest average of the year on March 11th at $3.96 a gallon. Prices have since fallen, averaging $3.83 a gallon on Tuesday.
The US Energy Information Administration expects gas prices to decline gradually this summer but remain at their highest national rate since 2014.
“Uncertainty about energy supplies is caused by the conflict in Ukraine, production decisions by OPEC + and The rate of oil and natural gas in the United States The agency said in its short-term energy outlook released on Tuesday that producers are increasing drilling. “We estimate that the average American household will spend about $2,945 on gasoline in 2022, which is, in real terms, $455 (18%) more than it did in 2021.”
The agency said domestic crude oil production will approach pre-pandemic levels this year and may reach a record 13 million barrels per day in 2023, which could lead to lower gas prices.
The next set of Twin Cities region data will be released in June.
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