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After slowing particularly in 2023, U. S. inflation has remained stubbornly high this year, moving more slowly toward the Federal Reserve’s 2% target.
But some states have already achieved this, while others will still struggle to meet this criterion, even after the country has declared its project accomplished.
The country’s annual inflation rate of 3. 2%, based on the Labor Department’s Consumer Price Index (CPI), masks notable differences between states, as pandemic-related product shortages and hard work led to an increase in costs for customers starting in 2021. It is expected to report that annual inflation jumped to 3. 4%, that figure is still lower than the 40-year high of 9. 1% in June 2022.
Florida is grappling with the highest inflation in the country, around 4%, while Pennsylvania has the lowest, at around 1. 8%, according to CPI knowledge research by Moody’s Analytics, based on a three-month moving average. it does not conduct surveys on inflation figures in the states, it does publish insights into metropolitan and regional spaces that Moody’s used to roughly estimate the state’s figures.
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Before the fitness crisis, “we didn’t see the big differences (between states) in inflation that we see today,” says Karl Kuykendall, a regional economist at S.
For eight northeastern states, annual value expansion is already less than 2. 5% and for about a quarter of the U. S. it’s less than 2. 7%, according to Moody’s analysis.
“Much of the country has already returned to taking on costs that other people would be very comfortable with,” says Mark Zandi, lead economist at Moody’s Analytics.
That could change things in November’s presidential election, Zandi says. President Biden could get a boost in swing states with annual inflation rates below the U. S. average, such as Pennsylvania, Wisconsin, and Michigan, especially if they get closer to 2% through November. .
Still, Georgia, another swing state, is still grappling with peak inflation, which could help former President Trump. And while price increases have slowed in Arizona, its cumulative gain since the start of 2021 is among the largest in the country. .
Generally speaking, inflation has been higher in the South and West because Americans have flocked to those regions due to their favorable climates and lower rates, which has increased consumer demand and prices, especially for housing. Many citizens left those areas, relieving cargo pressures.
These decades-long migration trends have intensified during the pandemic, as other people have moved from densely populated cities like New York and Chicago to smaller cities with open spaces and lower prices, like Boise, Idaho and Nashville, Tennessee.
Now that many corporations are requiring their workers to return to the office, at least occasionally, price pressures have eased somewhat, says Adam Kamins, regional economist at Moody’s.
Inflation in western mountain states like Utah, Idaho and Arizona pushed the country to more than 10% in June 2022, according to Moody’s. But rising housing costs, as well as mandates to return to power, have slowed migration to the region. In February, inflation in the region was among the lowest in the country, at around 2. 5%.
By contrast, price increases in California, Hawaii, and New York peaked at a modest 7-8% in June 2022. People were leaving cities like San Francisco, New York, and Honolulu en masse in search of cheaper, less harmful areas. It’s down, many other people have returned to those cities, and fewer are leaving, which has renewed fare cuts. Inflation is about 3. 6% in California and 3. 5% in Hawaii, according to Moody’s estimate of the three-month average.
Mountain West citizens feel better now that inflation is slowing and those in California and Hawaii are more frustrated. Still, perceptions may be further shaped through cumulative price increases since early 2021, Kamins says. Based on this, prices in Utah, for example, increased by 19. 3% (above the U. S. average of 18. 5%), while California’s increased by 16. 7%.
Here’s a look at the five states with annual inflation over the past year and the five states with the lowest price increases, according to Moody’s three-month average.
The states with the fastest inflation:
12-month inflation: 3. 9%
Americans have flocked to the Sunshine State since the pandemic for its warm weather, beaches, and lower rates, especially in the Northeast. The state gained 194,000 more citizens than it lost last year, according to figures from Moody’s and the Census Bureau, which has driven up the cost of single-family homes and rents.
The state attracts many high-income consumers, adding employees and retirees, according to Moody’s Kamins and Zandi. This influx has also raised the price of food, furniture, and other goods and services. Groceries are among the most expensive in the country. The average family spends about $300 per week, according to the Census Bureau.
Meanwhile, devastating hurricanes in recent years have sent homeowners insurance skyrocketing. The average annual premium costs $8,770, about four times the national average, according to moneygeek, a private finance website.
12-month inflation: 3. 8%
As real estate costs skyrocketed in major metropolitan areas, many Americans sought safe haven in Tennessee for its more affordable housing, the amenities of a giant city of Nashville, its diverse economy, and its robust job opportunities. The trend accelerated the pandemic, Kamins says.
It is home to major corporations like FedEx and AutoZone, and the state has a thriving automotive meeting center.
Last year, Tennessee added 63,000 more citizens than it lost, driving up the cost of housing and other services. Its unemployment rate of 3. 3 percent, lower than the country’s 3. 8 percent, has led to higher wages and higher prices for services.
But while real estate costs have risen, they haven’t risen as sharply as in the Mountain West area, Kamins says. And many Americans who moved to rural areas of the state during the pandemic have stayed and continue to operate remotely even during the health crisis. It’s been relieved.
12-month inflation: 3. 8%
The state has attracted residents, especially to Northern Virginia, as the federal government, near Washington, D. C. , has strengthened its upcoming law to increase investment in infrastructure, chip production and renewable energy, Zandi said.
But the region, a colorful tech hub, is struggling to attract enough professional staff to recruit the many tech corporations that have set up shop in the region, Kamins says, driving up wages and inflation. Unemployment is 3%.
12-month inflation: 3. 6%
The state, which is the fastest-growing in the country, boasts a tourism industry in Charleston, Hilton Head and Myrtle Beach, as well as a colorful production sector centered on BMWs upstate and Boeing in Charleston.
About 82,000 more people moved to the state than last year, according to Moody’s and census figures, driving up housing and other prices.
12-month inflation: 3. 6%
The state has attracted citizens during the pandemic, and many have stayed and worked remotely, Kamins says.
Meanwhile, its number of brands has grown, says S’s Kuykendall
Inflation has accelerated from a cheap base, Kamins says.
The states with the slowest inflation:
12-month inflation: 1. 8%
Pennsylvania is one of the few states that has lost population, as its citizens have fled the mountains to the west and south in search of lower costs, landscapes or milder temperatures.
Because other people in the Keystone State drive a lot, fuel costs weigh more heavily on a basket of goods, and declining fuel costs over the past 18 months has helped bring down overall inflation, Kamins says.
12-month inflation: 1. 9%
Maine gave the pandemic a big boost, as citizens of major New England cities, such as Boston, moved to less populated areas, Kamins says. But that trend halted and partly reversed as COVID faded.
At the same time, he says, its population has a disproportionate percentage of older citizens who tend to spend less, preventing costs from rising dramatically.
12-month inflation: 2%
Like Maine, New Hampshire drew citizens from major cities during the pandemic, but the trend has faded.
The state also has an older population that tends to spend less. Nearly 19% of citizens are 65 or older, compared to 16. 5% in the U. S. According to the University of New Hampshire’s Carsey School of Public Policy.
The population has grown slowly, but real estate costs in the state are strangely high, Kamins says, discouraging other people from moving there.
Today’s jobs report reports that the economy added 303,000 jobs in March and an unemployment rate of 3. 8%.
12-month inflation: 2. 1%
Vermont has the third-oldest population in the country, behind Maine and New Hampshire. It was wasting population for years, but gained some COVID.
The state has a colorful tourism industry, but scant snowfall hurt last ski season and a traditionally rainy summer last year also discouraged visitors, according to Moody’s.
Meanwhile, a chip factory, the state’s largest employer, was laid off due to weak global demand.
12-month inflation: 2. 1%
The state attracted New York City citizens during the pandemic, but many have now moved to warmer, more affordable areas, Kamins says.
“Housing affordability is an issue,” he says.
Contributor: C. A. Daytona Beach Bridges News Journal
This article gave USA TODAY’s impression: States with the highest and lowest inflation in the U. S. U. S.