Falling Gas Prices Ease New Jersey Inflation, But Other Costs Rise

NEW JERSEY — Inflation is slowing down, led largely by tumbling gasoline prices, but residents of New Jersey will continue to feel pain in the pocketbook at the grocery store and for other purchases too, according to the July Consumer Price Index report released Aug. 10.

Consumer prices jumped 8.5 percent in July, compared with a year earlier, but that was down from the 9.1 percent year-over-year increase in June, a four-decade high, according to the report from the Bureau of Labor Statistics.

Supply chain snarls are also loosening, with fewer ships moored off Southern California ports and shipping costs declining. Prices for commodities like corn, wheat and copper have fallen steeply.

New Jersey residents paid an average of $4.1 per gallon of gas as of Aug. 19, compared with $4.615 a month ago, according to AAA, but those decreases aren’t enough to offset spiking prices across a wide range of goods and services.

“Falling pump prices may eventually lead to more drivers hitting the road again,” said Andrew Gross, AAA spokesperson. “But that hasn’t happened yet. Instead, many drivers are waiting for prices to fall further before reverting to their typical driving habits.”

Groceries

On average, Americans paid 13.1 percent more for groceries in July than they did in the year prior, the largest 12-month increase since the one-year period ending in March 1979. Cereals and bakery products cost 15 percent more than they did at this time last year, dairy and related products cost 14.9 percent more, fruits and vegetables cost about 9.3 percent more.

In figures compiled for the Northeast part of New Jersey, prices on pantry staples such as breads and cereals, for example, saw a 15.5 percent increase over July of 2021. Dairy products were up 13.3 percent and meat, fish and eggs were up 9.9 percent over that year. Fruits and vegetables were up 8.4 percent from July 2021.

In figures for the Camden and Philadelphia areas, cereal and bread cost 17.8 percent more than in July last year. Meats, fish and poultry rose by 10.5 percent over last year and dairy products rose by 9.99 percent over the year. Fruits and vegetables rose by 8.5 percent over July of 2021.

Rents

Rent prices also increased, by an average of 0.7 percent in July, and are about 5.7 percent higher than in July 2021. Lodging away from home continued to decline, falling 2.7 percent in July after a 2.8 percent decrease in June.

In figures for the Northeast section of New Jersey, rents climbed by 3.7 percent from June 2021. In the Camden/Philadelphia area the increase for the same period was 5.1 percent.

One-third of Americans rent their homes, and higher rental costs are leaving many of them with less money to spend on other items. Data from Bank of America, based on its customer accounts, shows that rent increases have fallen particularly hard on younger Americans. Average rent payments for so-called Generation Z renters (those born after 1996) jumped 16 percent in July from a year ago, while for Baby Boomers the increase was just 3 percent.

Cars

Nationally, new car prices also continued to rise in July, up 10.4 percent from the year prior. Used car and truck prices were up 6.6 percent from July 2021. Regional figures from the CPI report indicate that in the Northeast region of New Jersey, new vehicle prices increased by 10.5 percent over a year ago. Used car and truck prices increased by 7 percent. In the Camden/Philadelphia area, new vehicles rose by 10.2 percent; used by 8 percent.

Medical

Medical care costs 5.1 percent more than a year ago, with a 0.4 percent increase from June to July, down from the 0.7 percent increase from May to June. In the Northeast New Jersey region, overall medical costs rose 5 percent, while in the Camden/Philadelphia area medical costs rose 4.1 percent over this time last year.

President Joe Biden has pointed to declining gas prices as a sign that his policies — including large releases of oil from the nation’s strategic reserve — are helping lessen the higher costs that have strained Americans’ finances, particularly for lower-income Americans and Black and Hispanic households.

Yet Republicans are stressing the persistence of high inflation as a top issue in the midterm congressional elections, with polls showing that elevated prices have driven Biden’s approval ratings down sharply.

On Aug. 12, the House is gave final congressional approval to a revived tax-and-climate package pushed by Biden and Democratic lawmakers. Economists say the measure, which its proponents have titled the Inflation Reduction Act, will have only a minimal effect on inflation over the next several years.

Inflation is expected to remain far above the Federal Reserve’s annual target through 2023 or even into 2024. Fed Chair Jerome Powell has said the Fed needs to see a series of declining monthly core inflation readings before it would consider pausing its rate hikes. The Fed has raised its benchmark short-term rate at its past four rate-setting meetings, including a three-quarter point hike in both June and July — the first increases that large since 1994.

An Aug. 5 blockbuster jobs report for July that the government issued — with 528,000 jobs added, rising wages and an unemployment rate that matched a half-century low of 3.5 percent — solidified expectations that the Fed will announce yet another three-quarter-point hike when it next meets in September. Robust hiring tends to fuel inflation because it gives Americans more collective spending power.

Stubborn inflation isn’t just a U.S. phenomenon. Prices have jumped in the United Kingdom, Europe and in less developed nations such as Argentina.

In the U.K., inflation soared 9.4 percent in June from a year earlier, a four-decade high. In the 19 countries that use the euro currency, inflation reached 8.9 percent in June compared with a year earlier, the highest since record-keeping for the euro began.

The Associated Press contributed reporting.