Wallets probably aren't much fatter, but Wasatch Front shoppers may have spent less at the grocery store last month, according to numbers contained in the Consumer Price Index that Wells Fargo issued Friday for Utah's most populated area.
Even so, the overall cost of living went up 1 percent between April and May, outpacing the national increase by 0.2 percent, according to the Wells Fargo report and the U.S. Bureau of Labor Statistics.
Locally, food prices dropped 3.4 percent in May, while the cost of eating in restaurants remained flat. The biggest drops came in the price of meat, poultry, fish and eggs, which were down nearly 7 percent, and tomatoes, down 11 percent, Wells Fargo reported.
Nationally, groceries went up 0.5 percent in May, due to rising costs of beef. In Utah, grocery prices went up 1.4 percent over the past three months, compared with a 1.7 percent increase nationwide.
But Utahns say they didn't feel much relief at the grocery store last month as they grappled with food prices.
"If you keep looking at them, you get sick," Murray resident Cynthia Millar said. "As I'm leaving the grocery store, I'm like ... three bags is $150 worth of groceries."
With floods threatening crops in Wisconsin, Indiana, Iowa and Nebraska and officials ordering some 20,000 people to evacuate their homes, Millar fears what's next.
"I'm wondering, how much worse is it going to get?" she said. "I'm just numb. There's nothing I can do about it."
Gas prices, which surged past $4 a gallon for the statewide average this week, also are largely responsible for a 3.5 percent increase in May transportation costs.
"I was in England 10 days (in May), came back, and gas was up like 30 cents," Salt Lake resident Leslie Lee said. "Everything had gone up so quickly."
Though pump prices are on the minds of many consumers, transportation wasn't the Wells Fargo report standout. Rather, it was the cost of clothes up 12.4 percent in May and 15 percent in the past three months.
That price jump was apparent to 15-year-old Amy Lee, who was shopping Friday at the Gateway in downtown Salt Lake with her mother, Leslie Lee. "I noticed that," the daughter said, "especially when you're working on a teenager's (wage) and can't afford the clothes."
Bountiful mother Jana Marsh has noticed rising clothing prices, too. She says she sticks to the sales. "I've never really tried to buy full-price things. To me, they've always been really expensive," she said.
Still, Wells Fargo economist and executive vice president Kelly Matthews says he's not too worried about blue jeans weighing down consumers. He said the price jump is seasonal. The national index shows a 2.5 percent increase in the price of clothes over the past three months.
Other costs also have climbed. Utilities on the Wasatch Front went up 3.6 percent for the month, and just 3 percent over the three-month period, compared with a 7.3 percent cumulative jump nationally.
Core inflation, which doesn't count food and energy, is relatively stable nationally at 2.3 percent, Matthews said. That suggests commodity price spikes aren't spreading to the rest of the economy.
On Wall Street, stocks ended a turbulent week with a big gain, reflecting investor relief that at least the core inflation reading remained well-behaved. The Dow Jones industrial average rose 165.77 points to close at 12,307.35 on Friday.
But many economists said they expect core inflation to begin rising as the prolonged rise in energy costs starts shows up in other areas. Skyrocketing energy costs in May pushed up inflation at the fastest pace in six months. So far this year, consumer prices are rising at a seasonally adjusted annual rate of 4 percent, compared with a 4.1 percent increase for all of 2007.
"Businesses that had been patiently waiting for oil prices to fall have run out of patience. We expect more of them to start throwing in the towel and raising prices," said Kenneth Beauchemin, an economist at Global Insight, noting the announcement by Dow Chemical Co. late last month that it was raising prices by up to 20 percent.
These developments have raised alarm bells at the Federal Reserve, which is now indicating that its biggest concern has changed from worries about a possible recession to fears about higher inflation.
In a speech Monday, Fed Chairman Ben Bernanke said that the Fed will "strongly resist an erosion of longer-term inflation expectations," comments that raised concerns in financial markets about interest-rate hikes.
Many economists, however, still believe that the weak economy and rising unemployment will keep the central bank from actually raising rates until later this year.While raising rates might not sound good at first, the action could strengthen the dollar, Matthews said. If that happens, "we may be able to see things improve sooner than anticipated."
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