A recent study analyzing Census Bureau data conducted by the Federal Reserve Bank of Dallas reveals that Southern states are experiencing the most significant impact from inflation stress.
Where’s Inflation Stress Highest? Mississippi leads the list, followed by Louisiana and Alabama, while the lowest inflation stress rates are observed in Minnesota, Vermont, and Wisconsin.
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This trend closely mirrors the current regional distribution of inflation across the United States, with the Southeastern states facing the highest levels and the Northeastern states experiencing the lowest.
Despite consumer price index (CPI) inflation declining from 8.2% in September 2022 to 3.7% in September 2023, the stress levels induced by inflation remain persistently high.
A contributing factor to these elevated stress levels in Southern states is their higher poverty rates when compared to Northern states, intensifying the impact of rising living costs.
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Troubled Texas: A notable case in point for how inflation stress is exceptionally high among southern states is Texas, which is known for its affordable costs of living. Contrary to its reputation, consumer prices in Texas and its neighboring states have surged at a faster pace than the national average, according to the study.
This surge has led to an alarming 52% of Texans experiencing considerable stress due to inflation, surpassing the national average of 47%.
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This stress is notably pronounced among low- and moderate-income households, as well as households from minority backgrounds.
These findings emerge from the Household Pulse Survey, initiated during the onset of the pandemic by the Census Bureau. The most recent data, collected from survey waves 49 to 61 (spanning from September 2022 to September 2023), underscores the disproportionate impact of inflation on low-income households, particularly affecting Black and Hispanic households and renters.
Fear Factors: Household income emerges as a primary determinant of inflation stress, with low-income households being the most severely impacted. Hispanic and Black families, along with renters and larger households, are at a higher risk of experiencing heightened inflation stress.
The escalating costs of fundamental necessities like food and shelter are straining household budgets, underscoring the urgency of addressing the challenges posed by inflation and providing support to vulnerable groups grappling with the repercussions of these mounting expenses.
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