(The Center Square) – Inflation increased 0.2% in the midwest in May, the lowest rate all year, but housing and services costs rose, according to a report from the Common Sense Institute of Iowa.
Housing costs increased by 4.6% from May 2023 to May 2024, while the cost of services rose 4.8%, according to the report. The increase was offset by a 5% decrease in durables, which includes items such as automobiles, appliances and furniture.
Food prices are up 1.5%. Between May 2022 and May 2023, prices jumped 6.8% and were up 12% from May 2021 to May 2022, according to the report by Ben Murrey, director of policy and research for CSI Iowa.
The midwestern states’ inflation rate for May was 2.7%, down from 2.8% in April, a sign that inflation is cooling. The U.S. inflation rate dropped from 3.4% in April to 3.3% in May, according to the report.
“This, of course, has everyone excited because falling inflation means the Fed may cut interest rates sooner,” Murrey said in an email to The Center Square. “However, we would need to have deflation through the end of the year to hit the Fed’s 2% (inflation) target in 2024.”
The Federal Reserve announced Wednesday that the interest rate would remain at around 5.25% to 5.5%.
Despite thawing inflation, consumer prices are still significantly higher than in 2020.
“In early 2021, inflation across the United States began to rise at rates far above the historic norm,” the report said. “In the Midwest, consumer prices have risen by 21.4% since March of 2020 when emergency fiscal and monetary measures went into effect to blunt the impact of economic shutdowns. As a result, the typical Iowa household must now spend $1,050 per month more than it did in 2020 to maintain the same standard of living.”
The data was compiled from the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI) database. The report includes the midwestern states of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.
