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Salt Lake City — The Zions Bank Wasatch Front Consumer Price Index (CPI) increased 0.7 percent from February to March on a non-seasonally adjusted basis. Over the last twelve months, prices have increased in Utah by 1.4 percent. The national Consumer Price Index, released by the Bureau of Labor Statistics, increased 0.6 percent from February to March on a non-seasonally-adjusted basis and has increased 1.5 percent over the past twelve months.
As expected, Utahns paid substantially more for gasoline in March than they did in February, driving overall transportation costs 1.5 percent higher month-over-month. Utahns paid $3.35 per gallon of gasoline in March, up from $3.14 in February and $3.11 in January. This is the highest price for gasoline in the state since October 2013. Utahns should expect gasoline prices continue to rise, as well. Last year, gasoline prices rose each month from January to June, and most analysts expect similar trends this year, citing increased seasonal demand and the switch to more expensive summer blend gasoline. Although the state’s gasoline prices have been increasing, the average price for a gallon of gasoline in Utah has been below the national average for the past 5 months. Currently, the average price for a gallon of gasoline in Utah stands at $3.32, much lower than the current national average of $3.64.
Consumers in Utah paid more for food at grocery stores in March, as well; food at home prices increased 1.0 percent from February to March due to higher produce and meat prices. Prices for food at home have now risen four of the past five months primarily due to sharply rising produce prices, which have risen about 4 percent each month over the course of the last five months. Produce, specifically citrus fruit prices, have risen substantially because of inclement weather across the globe. In fact, in March some consumers may have noticed that prices for limes increased substantially due to tight supplies caused by winter crop damage in Southern Mexico. In Western states that rely heavily on Mexico for limes, the shortage has sent prices soaring to a record $100 per case, up from an average of $14, hurting produce suppliers and restaurants alike.
Rising beef prices have also played a part in higher grocery bills for many consumers. For the second straight year, drought conditions in parts of the U.S. have dramatically reduced the amount of cattle feed available, forcing ranchers to reduce their herds to sizes not seen in over 50 years. These supply constraints sent beef and veal prices up 4.0 percent in February, which is the largest monthly increase in more than ten years, according to the U.S. Department of Agriculture (USDA). Prices for cattle feed could continue to increase over the next few months, as well, sending beef prices even higher. Corn prices in commodity markets rose sharply last month after the USDA estimated that farmers will plant 91.7 million acres of corn this spring—a 4 percent decline from last year and the lowest total in four years. Last year, the U.S. had a record-setting yield from its corn harvest that led to sharp declines in corn prices, and this prompted many farmers to instead plan to plant soybeans this spring.
In other categories, utility prices rose 1.3 percent from February to March, as prices for propane increased across the state. Housing prices also jumped considerably, increasing 0.6 percent, primarily due to appreciably higher hotel and motel prices. Clothing prices rose 0.6 percent as retailers rolled out their new spring and summer lines. Medical care prices increased 0.5 percent due to higher medical care service costs. Prices for food away from home rose 0.2 percent due to higher prices for alcoholic beverages, and other goods and services moved 0.1 percent higher. Education and communication prices fell 0.5 percent from a decrease in telephone service prices, and recreation prices decreased 0.1 percent.
“We are now in the midst of the seasonal gasoline price increase,” said Scott Anderson, Zions Bank president and CEO. “Although these price increases are frustrating for consumers, this seasonal increase is no reason to fret. Our local economy will remain strong even as gasoline prices march higher until mid-summer when prices will begin to drop again as fall approaches.”
Analysis and data collection for the Zions Bank CPI and the Zions Bank Consumer Attitude Index are provided by the Cicero Group. The Cicero Group is a premier market research firm based in Salt Lake City. The Zions Bank Utah Consumer Attitude Index will be released April 29, 2014.