If you think you're paying more at the grocery store, you're right: Food prices along the Wasatch Front have gone up 5 percent over the past two months.
Rising grocery bills plus higher gas prices for trips around town are making a dent in Utahns' wallets. Even so, the Wasatch Front's overall cost of living remained flat over the past month, according to the Wells Fargo Consumer Price Index report issued Wednesday.
Nationally, the cost of living went up a less-than-expected 0.6 percent, according to the U.S. Bureau of Labor Statistics.
"Overall, it's obvious that particularly food and fuel prices are going up, but I don't believe the overall circumstances point to an inflationary circumstance," Wells Fargo economist and Executive Vice President Kelly K. Matthews said.
It's more like a bubble economy, he said, with the big question being: How big will the bubble get, and when will it break?
Locally, the price of groceries went up 2 percent between March and April and increased a total of 5 percent since February the biggest jump of any category measured in the Wells Fargo index. The rise is attributed mainly to more costly produce, meat, poultry, fish and eggs.
Nationally, groceries went up 1.3 percent for the month.
South Jordan mother Randi Shaw is feeling the pinch. She's driving to West Jordan to get better prices on groceries, and she's clipping coupons, watching store ads and shopping once a month.
"We budget better and shuffle some free spending cash to groceries and gas," Shaw said Wednesday as a Macey's cashier rang up her groceries.
Groceries and transportation account for 27 percent of a typical Utah family's budget, according to the Wells Fargo report.
Health care along the Wasatch Front also increased, up 2.9 percent for the month and 3.1 percent for the two months.
Skyrocketing gas prices are on most people's minds, and the cost of transportation, which includes gasoline, is up 1.5 percent for the month and 2.4 percent since February. Nationally, the rise was 1.8 percent.
Meanwhile, the cost of clothes in Utah dropped 4 percent for the month, as marked-up, seasonal prices came back down to previous levels, the Wells Fargo report said. Housing costs also were down 1.3 percent, largely because of a drop in hotel-room prices.
The national picture is a little different. For April, prices rose overall by 0.6 percent, mainly because of a 2.2 percent increase in utility costs and a 1.8 percent hike in the cost of transportation.
The overall seasonally adjusted consumer-price increase of 0.2 percent, however, was slightly lower than the 0.3 percent rise economists had expected.
National inflation eased slightly for the month but was still 3.9 percent above last year, Wells Fargo reported. Core inflation was 2.3 percent above last year. On Wall Street, the Dow Jones industrial average rose 66.20 points to close at 12,898.38 as investors took comfort in the lower inflation readings.
Utah's economy "has held up pretty darn good, relatively speaking, mainly due to Utah's 2 percent job growth for the month," Matthews said, and the economic bubble may not get too much bigger.
U.S. gasoline demand is down, and world energy supply and demand is not much changed. U.S. policy for using corn to make ethanol, which has driven up food prices, also is being debated.
While new home construction is down in Utah, Matthews believes the trend won't continue too much longer. He also believes housing prices will drop another 10 percentage points, for an 18 percent to 20 percent decline by year's end, and then turn around.
"There are a lot of reasons to believe we're much better off than our sentiment is telling us," said Sterling Jenson, regional managing director for Wells Capital Management.
Jenson projects stock-market earnings will be down 6 percent in the second quarter but rise 14 percent in the third quarter and 62 percent the fourth quarter. Should the dollar strengthen, the price of oil will come down, too, he said."If the dollar improves, if the financial industry's worst losses are behind us, if we can sell and build a few homes," Matthews said, "things could look a whole lot better a year from now."
Contributing: Associated Press
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