Chesco residents react to steady inflation

KENNETT SQUARE — Food and medical costs continue to increase as inflation this summer has remained steady at 8.3%, representing a decrease of 0.3% in August compared to July.

The newest monthly report on the U.S. Consumer Index was relaxed by the U.S. Bureau of Labor Statistics on Tuesday morning.

While gasoline prices continue to lower, food prices continue to rise as do other consumer goods and services.

Grocery store food prices have increased by 11.4% as of August compared to one year prior. That represents an increase of 0.8% in grocery store food prices this summer to August from July.

Overall, however, the food at home index rose 13.5% over the last 12 months, the largest 12-month increase since the period ending March 1979, according to the U.S. Bureau of Labor Statistics. The index for other food at home rose 16.7% and the index for cereals and bakery products increased 16.4% this past year.

Rental prices continue to rise, as they have for many years, however these prices won’t be captured in a timely manner because of the duration it takes for leases to turnover, according to Christina Skinner, professor of legal studies and business ethics at Wharton School of Business.

Rental costs jumped 6.7% in August from a year earlier, the most since 1986. Rents change much more slowly than commodity prices like gas. That could mean that apartment prices will keep inflation elevated well into 2023.

Wages and salaries haven’t increased to meet the overall spike in inflation on U.S. consumer prices.

Many people are struggling to make ends meet, as previously reported.

“Chester County families are feeling the financial strain of rising prices and stagnant wages,” said Chester County Commissioner Josh Maxwell. “These are long-term structural challenges with few short-term solutions.”

The commissioner added, “In Chester County, we can continue to award contracts to firms that adhere to wage, health, and safety laws, and offer support through partners like PA CareerLink Chester County for workers to help combat workplace abuses.”

Inflation hit 9.1% in June, breaking a 40-year-old record.

In August the energy index fell 5% after previously declining 4.6% in July. The cost of gas decreased by 10.6% last month compared to July, as announced in the most-recent Consumer Index Report released by the U.S. Bureau of Labor Statistics on Tuesday.

However, the electricity index increased, rising 1.5% in August, the U.S. Bureau of Labor Statistics reported. This marks its fourth consecutive monthly increase of at least 1.3%.

In June, the gasoline index increased 59.9 percent over the span, the largest 12-month increase in that index since March 1980, as previously reported.

In August, the U.S. energy index rose 23.8% over the past 12 months, according to the U.S. Bureau of Labor Statistics. The gasoline index increased 25.6% over this time span and the fuel oil index rose 68.8%.

As of August, the index for electricity rose 15.8%, the largest 12-month increase since August 1981.

The cost of natural gas increased by 33% over the last 12 months, the report found.

“Chester County is not immune to the hardships that inflation can cause,” Maxwell said on Tuesday. “We are fortunate to have programs and resources offered by the county and in partnership with numerous local non-profit organizations. There are ample resources to assist residents with basic needs such as food, rent and utilities.”

He said residents can access resources by calling 2-1-1.

‘Live with dignity’

“An increasing number of residents throughout Southern Chester County are negatively impacted by inflation,” said Terry R. Vodery, chief executive officer at the United Way of Southern Chester County. “And it’s not just the poor who are struggling to make ends meet.”

She continued, “United Way of Southern Chester County funds 24 programs offered by our 18 partner agencies serving folks throughout the region.”

This Crisis Intervention programs include:

• Meals for Homebound Seniors in Southern Chester County through Meals on Wheels;

• Direct Assistance Programs and Food Cupboard through the Oxford Area Services Center;

• Family Benefits Programs through the Maternal Child and Health Consortium;

• Delivering Basic Needs and Companionship through SILO in Oxford;

• Wellness Programs through the Kennett Senior Center;

• Emergency Assistance and Food Cupboard through Kennett Area Community Services.

On a bright note, many regional businesses are stepping up to help feed a rising increase of hunger with inflation 8.3% higher than a year ago.

“Among the many businesses and individuals that contribute to our work, we’d like to thank, in particular, Brandywine Oak Private Wealth LLC, Constellation, Gore, and Jackson ImmunoResearch Laboratories for going above-and-beyond to support the Crisis Intervention work we do — especially over the past year.”

Further, “their generosity makes our partner agencies able to serve the needs of SCC residents in crisis,” Vodery said.

“If you really want to make an impact in your own backyard, the best way is to give to United Way of Southern Chester County,” Vodery said on Tuesday. “When you do, we will dispatch your contributions to the most effective, efficient programs that help people in Southern Chester County. We’ve done the research. We know and understand exactly where your dollars will make a difference. No dollar will be wasted.”

Chester County is the highest income earning county in Pennsylvania. The median wage is $52,711 for an individual and $104,161 for a household.

“You never know what someone is going through. While some may put on a brave face in public, they — and their families — may struggle in private,” Vodery said.

“Taking just a moment to contribute to the work of great organizations that provide basic needs can move families from crisis to independence and help all of our neighbors to live with dignity.”

Part of the Greater Philadelphia Region with a rich history in American Revolutionary War happenings, Chester County is home to 521,980 people, according to the U.S. Census Bureau.

Inflation still high

Lower gas costs slowed U.S. inflation for a second straight month in August, but most other prices across the economy kept rising — evidence that inflation remains a heavy burden for American households.

Consumer prices surged 8.3% last month compared with a year earlier, the government said Tuesday, down from an 8.5% increase in July and a four-decade high of 9.1% in June. On a monthly basis, prices rose 0.1%, after a flat reading in July.

Still, excluding the volatile food and energy categories, so-called core prices jumped 0.6% from July to August — up sharply from 0.3% the previous month and dashing hopes, for now, that core prices would moderate. And in the year ending in August, core prices leapt 6.3%, up from 5.9% in July.

Core prices typically provide a clearer read on where costs are headed than overall inflation. Rents, medical care services and new cars all grew more expensive last month.

Stock prices tumbled and bond yields rose on the worse-than-expected core figures, with many investors fearful that the Federal Reserve will turn even more aggressive in its drive to curb inflation. The Dow Jones industrial average sank nearly 900 points in mid-day trading Tuesday.

Further Fed rate hikes could weaken growth so much as to push the economy into a recession. Some economists now expect the Fed to raise its benchmark short-term rate, currently in a range of 2.25% to 2.5%, to 4.5% or higher by early next year. That would make it even harder for the central bank to meet its goal of achieving a “soft landing,” whereby it would tame inflation without causing a recession.

“This was a disappointing report,” said Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives. “It raises the risk of higher interest rates and a hard landing for the economy.”

Inflation is higher than many Americans have ever experienced, escalating families’ grocery bills, rents and utility costs, among other expenses. It has deepened gloom about the economy despite strong job growth and low unemployment.

Ongoing price increases for raw materials — and labor — have left many small businesses struggling. According to a survey by Goldman Sachs 10,000 Small Business Voices, some are raising their own prices to keep up, only to then lose customers.

Christopher Rugaber of the Associated Press contributed to this report.

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