Wheelhouse Chief Investment Officer Ann Berry and Advisor Group Chief Market Strategist Phil Blancato react as the PPI hits a record high on “Make Money.”
Several western states have become hotbeds for US inflation
The Department of Labor reported Tuesday that consumer prices in the mountain region, which includes Montana, Wyoming, Idaho, Nevada, Utah, Colorado, Arizona and New Mexico, rose an impressive 10.4% year over year in March. That’s well above the national average of 8.5%, which is already the fastest rate since December 1981.
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That’s at least partly due to rising real estate prices in the Rocky Mountain region as thousands of Americans look to relocate. In Phoenix, Arizona, for example, a typical home sold for $435,000 in December — up 28% year-on-year, according to real estate brokerage firm Redfin. The average home price in Colorado has increased nearly 20% over the past year.
Other states are also experiencing inflation well above the national average. Prices rose 9.5% in a handful of states, including Texas, Oklahoma, Arkansas and Louisiana. South Atlantic prices, meanwhile, surged 9.2%; this region includes Maryland, West Virginia, Virginia, North Carolina, South Carolina, Georgia and Florida.
By comparison, prices in the mid-Atlantic — New York, New Jersey and Pennsylvania — were far lower, rising 7.2% year over year in March, slightly below the national average. The New England region also saw slightly below-average inflation rates, with prices up 7.4% year-on-year in March.
Rising inflation is nagging at the sharp wage increases American workers have seen in recent months. Real average hourly earnings rose just 0.1% mom in January as a 0.6% rise in inflation wiped out overall wage growth of 0.7%, according to the Labor Department. On an annual basis, real incomes even fell by 1.7% in January.
A gasoline truck exits a Marathon oil refinery after being loaded with fuel October 29, 2021 in Salt Lake City, Utah. (George Frey/AFP via Getty Images) / Getty Images)
Inflation is causing Americans to spend an extra $276 a month on goods and services, according to a new analysis by Moody’s Analytics.
The surge in inflation was bad news for President Biden, whose approval rating has been bound to fall as consumer prices have risen. The White House has blamed supply chain shortages and other pandemic-induced disruptions in the economy for the price hikes, while Republicans have blamed it on the president’s massive spending agenda.
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After the data was released, Biden acknowledged that higher inflation is causing more financial stress for American families. But he claimed there are “signs that we will rise to this challenge”.
“It’s a real obstacle,” he told reporters at the White House. “It affects families when you go to a grocery store and pay more for everything you buy. It matters to people when they pay more for gas, even though in some states we’ve got the price below three dollars a gallon, but the point is it hasn’t come down fast enough. But I think it will.”