(The Center Square) – Iowa business associations respond to reports that inflation rose more precipitously in June compared with May.
Nationally, prices industry-wide increased 1.3 percent in June, seasonally adjusted, after rising one percent in May, the Bureau of Labor Statistics reported Wednesday. The seasonally adjusted past year increase, 9.1%, is the largest since the period ending November 1981, the BLS news release said.
The index for all items rose 0.7 percent in June, up from 0.6 percent in the previous two months. In the past year, the rise has been 5.9 percent. Nearly all major component indexes increased in June, yet there were some that were larger contributors: shelter, medical care and auto, specifically motor vehicle insurance, used cars and trucks, and new vehicles.
Used cars rose 1.6 percent in June after rising 1.8 percent in May. Motor vehicle insurance rose 1.9 percent in June, for the sixth consecutive month of increases. New vehicles rose 0.7 percent in June, down from 1.0 percent in May. Motor vehicle maintenance and repair rose 2.0 percent in June, which is the largest increase since September 1974. In the past year, new vehicles rose 11.4 percent while used cars and trucks rose 7.1 percent.
Iowa Automobile Dealers Association Vice President of Public Affairs & Operations Brittany Bungert told The Center Square that trade-ins of vehicles can help consumers seeking to purchase a new vehicle.
Dealers are eager to acquire trades so consumers should give their local dealerships the opportunity to make an offer, she said.
“Car owners are getting more for their trades than is typical, which can ameliorate the higher cost of purchasing a new vehicle,” she said. “It’s always a good idea for a consumer to have a realistic idea of what their trade vehicle is worth, but now more than ever they should make sure they know the value of their trade.”
Shelter increased 0.6 percent in June, same as May. Rent increased 0.8 percent over the month, beating monthly increases since April 1986. Owners’ equivalents rose 0.7 percent. However, lodging away from home fell 2.8 percent in June after seeing increases in recent months.
Iowa Hotel & Lodging Association President & CEO Jessica Dunker told The Center Square in a texted statement Thursday that while CPI nationally shows hotel prices are down, Iowa’s hotel rates have tended to stay relatively steady.
She said that’s partly because Iowa hotel rates were never as high as those seen in many large cities that still haven’t recovered their business travelers and now have to cut prices to attract leisure travelers.
“It is also due to the fact that June is peak season for Iowa hotels attracting everything from weddings to seasonal outdoor events,” she said.
Gas, food and shelter were the largest contributors to inflation, the June report said.
Gas prices rose 11.2 percent, and the energy index overall rose 7.5 percent, according to the report. Since last year, the energy index has risen 41.6 percent, the largest 12-month increase since April 1980.
Food prices have increased 10.4 percent in the past year, but the June rise, 1 percent, was less than May’s, 1.2 percent. Cereals and bakery products rose 2.1 percent in June while flour rose 5.3 percent.
In the past year, food at home has risen 12.2 percent, the largest increase since April 1979. Butter and margarine prices have increased 26.3 percent.
