Inflation in the US has begun to cool however it still remains relatively high, with the consumer price index (CPI) coming in at 6.4% year over year.
Some states however are feeling the pinch more than others.
A recent Moody’s analysis of Bureau of Labor Statistics (BLS) data found that Nevada and Colorado saw the highest price growth at more than 7.4%, as Texas, Florida, Arizona, Utah, Virginia, and Louisiana were all also over 7%.
Justin Theal, an officer with the Fiscal 50 project at Pew Charitable Trusts, said in an interview with Yahoo Finance, “Inflation hasn’t been this high in so long since the 1970s, so many states are having to grapple with these challenges for the first time.”
In addition, several metro regions have seen inflation increase significantly, according to Wallethub data. In Florida, the Miami-Fort Lauderdale-West Palm Beach metro area inflation came in just below 10% while in Tampa-St. Petersburg-Clearwater it was at 8.9%.
The latest BLS data shows grocery prices remain elevated, increasing 0.4% month over month in January, and by 11.3% year over year. Eggs in particular have seen prices rise 70% compared to one year prior.
Another factor affecting inflation rates in states is the effect of migration driving up shelter costs, which comprise almost one third of overall CPI data. As new migrants arrive in an area, they increase demand on housing, driving up prices.
United States Postal Service change-of-address data from 2019-2021 shows Americans moving out of New York, California, Illinois, Pennsylvania, and Massachusetts in the largest numbers, while Texas, Florida, South Carolina, North Carolina, and Georgia saw the biggest numbers of new residents.
Theal noted that variations across states occur due to several factors ranging from consumer demands to migration and even the effects of the Covid-19 pandemic.
He added, “Elevated inflation across all states is disrupting these revenue trends — whether the state is more reliant on sales taxes, which tend to closely follow the ebbs and flows of inflation over time, or if the state is more reliant on personal income taxes, which tend to become more volatile during inflationary conditions, Overall, no state has gone unscathed in terms of inflation on their state finances.”
