An overwhelming majority of Utahns are deeply concerned about the impacts of record-high inflation and most believe the elevated costs of goods and services are not likely to subside any time soon.
That’s according to a new Deseret News/Hinckley Institute of Politics poll conducted Jan. 20-28 of 815 registered Utah voters. Results come with a plus or minus 3.43% margin of error.
The survey found 93% of respondents are somewhat or very concerned about inflation with 7% weighing in as not very or not at all concerned with the issue. And, of those who registered some level of concern, 64% believe inflation impacts will be long term and prices will continue to climb while 26% of poll participants feel that inflation will be temporary and the costs of goods and services will stabilize.
U.S. consumer prices have been on the rise for 18 months but jumped some 7% in December, the fastest year-over-year rise since 1982, according to federal data and marking the third straight month in which the rate came in at 6% or more over 2020.
Hitting close to home
West Jordan resident Sheryl Cronin participated in the new Deseret News poll and said she and her partner have been able to absorb the extra costs that have come with rising inflation but navigated its impacts in a very acute way last summer.
“We felt it the most when we purchased a house last June,” Cronin said. “The price was intense for us.”
Cronin said the unexpectedly big cash outlay in the midst of a red-hot Utah housing market was somewhat offset by getting a lot more than she expected when selling a condo ahead of buying her new home, getting double what she paid less than 10 years ago for the unit.
But she also noted higher prices were having some influence on decisions about whether to dine out and what to buy at the grocery store.
The U.S. Labor Department’s Consumer Price Index report, a measure of average price changes on a selection of goods and services, found those prices surged in December 2021 at a rate not seen in nearly four decades. Increases in the costs of shelter, food and used vehicles helped drive the record increase as high consumer demand, coupled with ongoing issues related to supply chain networks, continue to impact family budgets.
The report found grocery prices up 6.3%, energy up 29.3%, used cars and trucks up 37.3% and the cost of shelter up 4.1% over the same time last year. Gasoline prices that dipped dramatically during pandemic restrictions were up nearly 50%, according to the federal data.
Even backing out increases in the price volatile categories of food and energy left a 5.5% rate across all other areas, the biggest jump since 1991, according to the report.
The new polling data reflects inflation concerns are on the rise for Utahns when compared to responses gathered in a July Deseret News/Hinckley Institute of Politics poll.
In that survey, 85% of Utahns said they were very or somewhat concerned about inflation. And among that group, 25% said higher prices would be “temporary” versus 60% who believe inflation will be a “lasting” issue.
Feeling the impact of inflation
The latest results come as no surprise to Phil Dean, former state budget director and public finance senior fellow for the University of Utah’s Kem C. Gardner Policy Institute.
“There are prominent price increases across most categories,” Dean said. “Food, rent, gas ... people are seeing and feeling these elevated prices in their budgets.”
Dean said the inflation concerns shared by Utahns are consistent with national data and, after several months of record-high year-over-year rates, the worries are becoming more embedded in the minds of consumers.
And there is data suggesting inflation has supplanted COVID-19 as the nation’s No. 1 source of anxiety.
A January poll from the Associated Press-NORC Center for Public Affairs Research found that management of the coronavirus pandemic is beginning to recede in the minds of Americans. COVID-19 is increasingly overshadowed by concerns about the economy and personal finances and particularly inflation.
The poll found just 37% of Americans named the virus as one of their top five priorities for the government to work on in 2022, compared with 53% who said it was a leading priority at the same time a year ago. The economy outpaced the pandemic in the open-ended question, with 68% of respondents mentioning it in some way as a top 2022 concern. A similar percentage said the same last year, but mentions of inflation are much higher now — 14% this year, compared with less than 1% last year.
Draper resident and poll participant Julie Day said inflation and related issues like global supply chain snarls were having a major effect on the contract furniture business she runs with her husband.
“My husband and I are sales representatives for a variety of furniture manufacturers,” Day said. “Almost all of the products come from China ... and just the price of the shipping containers to get the furniture here has gone from around $3,000 to over $20,000.”
Day said she believes the rising cost of consumer goods amid ongoing pandemic conditions has highlighted a mistake made by U.S. companies in moving so much of their manufacturing to overseas locations.
Economic outlook for the nation and Utah
While supply chain issues, along with a nationwide labor shortage and unprecedented levels of COVID-19 related federal stimulus subsidies flowing into the economy have exacerbated inflationary pressures, the Federal Reserve appears ready to push back on rising inflation by employing their most powerful tool — hiking interest rates.
“We definitely are poised for a March increase,” San Francisco Federal Reserve Bank President Mary Daly told Reuters in a brief phone interview late last month. “But after that, I want to see what the data brings us ... let’s get through omicron, let’s look at this and let’s see.”
Daly was a featured speaker at the recent Utah Economic Policy Summit where she explained how the impacts of COVID-19 have rippled through an interconnected global supply chain with shutdowns in Asia leading to shortages in the U.S. amid record high demand that, itself, is driven by pandemic conditions that have pushed consumer spending from services to goods. She noted some examples, including how a two-week shutdown of one shipping nexus in Vietnam resulted in three-month delays on goods passing through that particular port.
She also offered a deeper definition of the Fed’s contention, offered months ago, that rising inflation would be a “transitory” issue that would fade as broader systems returned to pre-pandemic operations.
Daly said that COVID-19 has simply persisted longer than expected and economic impacts like higher-than-normal demand for goods and supply chain bottlenecks that have exacerbated inflation rates will not persist past the time when pandemic conditions ease.
Daly also reiterated that the Fed’s plans to institute nominal upward adjustments to interest rates in the coming year will be aimed at “neither stimulating nor pulling back the reins” of the U.S. economy.
When asked to weigh in on the year ahead, Daly said she was “bullish” on 2022 and, pending any further unexpected changes in pandemic conditions, sees a positive economic road ahead, and particularly so for Utah.
“I see the beginnings of really building back from what we’ve gone through,” Daly said. “I’m very optimistic. Many sectors are still disrupted and not at all back to what they were. Those are the people and businesses and areas we need to draw in. Some places, like Utah, will be leading and we need everyone else to get in and follow.”