(The Center Square) – Iowa families are being hit hard by inflation, according to a report from the Common Sense Institute of Iowa, which shows the average family has spent nearly $23,000 more since 2020 to maintain their standard of living.
Families spent $940 more in January 2024 than in January 2020.
The average Iowa household income per month is about $6,000, according to Ben Murrey, director of policy and research at CSI Iowa and author of the report. CSI is a non-partisan research organization.
“They are having to spend almost $1,000 more every month making their standard of living,” Murrey said in an interview with The Center Square.
Inflation hit Iowans the hardest in transportation costs, according to the report. Of the nearly $23,000 increase over the past four years, $8,527 was for transportation. The second highest cost was housing at $6,507.
Wages are not keeping up with the pace of inflation, Murrey said.
“Wages went up 7.5% while there was an 18% increase in prices,” he said. “Yes, wages have gone up, the median household income has gone up since 2020. But the cost of making your standard of living has gone up more than typical wages.”
American families are dealing with increased inflation and slower wage growth, but it’s more pronounced in Iowa, Murrey said.
“A lot of the industries that really benefited from rising prices are not industries that have much of a presence in Iowa,” he said. “A lot of capital has gone into tech and Iowa is not a big tech center. Agriculture and manufacturing are big in Iowa.”
The trend has started to reverse from Iowans in the past year, according to Murrey.
“Wages have a 10% increase over last year while the rate of inflation has cooled down to about 2.7%,” he said.
The national inflation rate was 3.1% in 2023. The rate ticked up again in January with an increase of 0.2%, according to the Bureau of Economic Analysis’ Personal Consumption Expenditures released last week.
Data suggest a three-year price surge in Iowa may be ending, according to the report.
“After falling sharply in the second half of 2022, inflation surged in the Midwest in January of 2023,” the report said. “Throughout the year, however, inflation trended consistently downward, declining from the previous month in all but two months. Last year ended with three consecutive months of month-over-month deflation for a total 0.5% decline in consumer prices.”