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Ashley Lowery, Deseret News
Julia Strompolos looks at eggs at a Smith's store in Salt Lake City on Thursday. Overall food prices rose 2.3% in Utah last month.

Wasatch Front grocery prices and the overall cost of living are up again — this time twice as high as the national increase, which was the second-highest monthly increase in 26 years, according to the Wells Fargo Consumer Price Index issued Thursday in Salt Lake City.

Local grocery prices rose 2.3 percent last month, compared with a 1.2 percent national increase, based on nonseasonally adjusted numbers from the U.S. Bureau of Labor Statistics. In the past five months, local food prices went up 5 percent, compared with 3.5 percent nationally.

Overall, Wasatch Front residents paid 1.1 percent more in basic living costs in July, more than twice the 0.5 percent national hike. In the past five months, the cost of living has gone up 4.2 percent locally and 3.9 percent nationwide.

Other big increases included the cost of utilities, up 4.6 percent locally and 4 percent nationally. Transportation was up 1.2 percent locally and 0.5 percent nationally, with a five-month increase of 11.9 percent on both scales, mostly because of gas prices.

Grocery prices are linked to different market factors than energy prices.

Food-price increases are tied to commodity prices — corn, for instance, has skyrocketed with increased demand for biofuels — as well as pump prices. Utah this week averaged $4.10 for a gallon of regular unleaded gas — the fourth-highest average price in the country.

Dave Cloward, owner of Valley Foods Brokerage in Spanish Fork, said freight charges on some food items have risen a full $1 per can. When a truck has six cans to a case, and 56 cases, that's more than $300 in charges.

Cloward mostly works with Utah school districts and prisons. He sells a manufacturer's product to distributors or end users, earning a percentage along the way.

"Freight is outrageous, and drivers are complaining they're losing money. It's a scary situation," he said. "You're seeing an increase (in food prices) now, a lot because (stores have) cut into their own margins."

Smith's Food and Drug Stores vice president of public affairs Marsha Gilford said her company has tried to refrain from raising prices by cutting overhead and seeking energy and working efficiencies.

"We have held our prices as long as we can," she said. "We really flinch when we have to raise any prices ... and will bring them down as quickly as we can."

Even Cloward is feeling the pinch, despite the wholesale prices he enjoys. A pound of wholesale hamburger has gone from $1.05 a pound to $1.55.

"At least for my family, we're changing our eating habits," he said. "I don't remember what steak is like."

Core inflation, which includes costs of everything but energy and food, stayed the same, at 0.3 percent nationally for July. But it is still 2.5 percent above what it was last year.

Wells Fargo economist and executive vice president Kelly Matthews said the July prices in the index came before national gas prices started to fall. He expects next month's transportation costs, at least nationally, to come down.

In that vein, some economists nationally said this could be the last terrible inflation report, because energy prices are dropping and food prices could moderate with an expected robust corn and soybean harvest.

But other analysts worried the data could signal inflation is here for awhile, because energy-price surges are now starting to spread to other parts of the economy.

Meanwhile, Wall Street caught a bounce Thursday, thanks to a further drop in oil prices and investors buying bargains in financial stocks after two days of declines. The Dow Jones industrial average rose 82.97 points to close at 11,615.93.

Contributing: Associated Press

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