(The Center Square) – The average household in Iowa has shelled out an additional $30,000 since 2020 to maintain its standard of living, according to a new report.
Prices are likely never to return to pre-COVID-19 pandemic levels, according to the Common Sense Institute’s Inflation in the Midwest report.
The average Iowan had to spend $1,100 more last month to keep up with inflation. Consumer prices in the Midwest have been up 22.3% since 2020 when economic shutdowns led to government fiscal and monetary measures, the report found.
In general, Iowans are paying $382 more on housing per month, $300 more on transportation, and $155 more on food.
Although inflation shows a cooling trend across the U.S., the Midwest saw its inflation exceed the national average for the first time in two years. It was 2.6% in the Midwest over the last year, a slight downturn from 2.6%. Meanwhile, the U.S. saw inflation at 2.5%, down from 2.9% last year, the report said. The average monthly inflation rate for the Midwest this year is 4.66%.
Housing, services, fuel and utility costs are driving increased prices in the Midwest. The cost of housing and services saw a 5% increase. Fuel and utility costs rose 3%, according to the report.
Between July and August, costs for housing and services fell 0.88% and 0.84%, respectively, and month-over-month rates for fuel and utilities went down 2.94% and 0.22%, respectively, according to the report.
While consumers might be happy to see the cost of commodities went down last month by 1.1%, that decrease might negatively impact Iowa’s economy, specifically in the agriculture community, the report’s authors wrote.
Meanwhile, the increase in food prices has slowed down. Food costs rose 1.8% compared to the 2.2% increase the month before and last year’s increase of 3.9%, the report showed. Two years ago, the inflation of food prices was 12.9%.
Prices for consumer goods rose in all categories by 0.1% in the Midwest between July and August compared to a 0.51% increase the previous month, according to the report.
The Fed’s end-of-the-year 2% annualized target would require deflation for the rest of the year, which is unlikely, the report said. However, investors expect the Fed to cut interest rates in its Sept. 18 meeting.
Fed Chairman Jerome Powell said last month the pandemic economy was unlike any other.
“Our objective has been to restore price stability while maintaining a strong labor market, avoiding the sharp increases in unemployment that characterized earlier disinflationary episodes when inflation expectations were less well anchored. While the task is not complete, we have made a good deal of progress toward that outcome,” said Powell.
