Inflation soared last month to the highest rate ever recorded in the Twin Cities since the Bureau of Labor Statistics began more frequently reporting prices in metro areas. The Minneapolis-St. Paul region had been seeing slightly higher inflation compared to the U.S. last summer and fall, but it came in a bit lower than the nation as a whole in January. The Twin Cities logged a 7.2% year-over-year increase in the consumer price index last month, compared to 7.5%, the highest in 40 years, for the nation.
Food prices higher here
One of the biggest contributors to the January growth in inflation at both the local and national level was higher food prices. Year-over-year food prices in the Twin Cities surged 7.6% last month, which was higher than the 7% increase nationwide. Food companies have cited supply chain bottlenecks, higher cost of ingredients, labor shortages and higher wages as reasons for price increases.
Meat a big hit to pocketbooks
Food prices have been rising across the board, but one of the biggest jumps has been in the category of meat, poultry, fish and eggs. In January, prices in that segment rose 9.4% over the year in the Twin Cities, compared with 12.2% for the U.S. Meanwhile, U.S. price increases for subcategories such as fruits and vegetables, dairy, cereal and bakery products also picked up from December to January.
Energy prices cut deep
Another big reason inflation is so hot right now is because of rapidly rising energy prices. The energy index has surged nearly 30% in the Twin Cities in the last year, a bit more than the 27% for the U.S. Electricity prices have risen faster in the last month or two as other types have moderated. But one of the biggest year-over-year increases has been in natural gas for utilities, which was up nearly 40% last month in the Twin Cities, and nearly 24% in the U.S.
Gasoline adds to pinch
One common place consumers are feeling the pinch of inflation is at the gas pump. Motor fuel prices are up year-over-year around 40% both at the local and national level. As the economy has been rebounding from the pandemic, global oil production has not kept up with demand. More recently, concerns over the tensions between Russia and Ukraine have also been driving up the price of crude oil.
Medical costs rising more slowly
In pre-pandemic times, medical costs were generally rising faster than inflation. But now as other areas have seen prices spike much faster, medical costs are rising more slowly, comparatively. In the Twin Cities, medical care costs rose 2.8% last month over the year, compared with 2.5% for the U.S. That was an increase, though, from recent months as costs for things like prescription drugs and hospital services grew.
Research: MaryJo Webster, Star Tribune
Charts: Jim Foster, Star Tribune
Source: Bureau of Labor Statistics
