Index: Inflation hurts South

The value of the dollar is weak right now, and it seems to cost more to fill a personal vehicle’s fuel tank than to buy a brand new bicycle.

But it looks like inflation is here to stay, at least a little while longer.

The Consumer Price Index (CPI) for the South rose 1.1 percent in June — almost three times the CPI for June 2007, which was 0.4 percent. The expected increase was 0.7 percent.

The CPI measures what people pay for goods and purchases for such services as health care, personal grooming and home maintenance.

“I think there’s no doubt that the overall inflation rate is heading in a direction that may scare Americans,” said Dr. Barry O’Brien, dean of the School of Business at Francis Marion University. “(Inflation) absolutely has had a crushing effect on Pee Dee families in that low- and middle-income level.”

Nationally, the CPI increased to 1 percent in June.

The South already was ahead of the national inflation curve for May with an index of 0.9 percent to the national standard of 0.6 percent.

Since June 2007, the CPI has increased 5 percent — the fastest one-year change since 1991, according to the U.S. Department of Labor.

O’Brien said there are two measures of the CPI: the overall and the core.

“It’s important to remember that the core rate excludes volatile food and energy prices,” he said. “Food and energy, when (those costs) rise, it’s very difficult to move away from those and it very difficult to live when a large part of income goes towards food and energy.”

The core index for the Southern Region, minus food and energy, was 0.3 percent for June.

The energy index increased 6.6 percent in June. In the past 12 months, it increased 24.7 percent, according to Labor Department figures.

The food index increased 0.8 percent in June following a 0.3 percent-increase in May. In the past year, the food index has increased 5.2 percent.

Grocery store chains such as Harris Teeter have to develop ways to offset food costs without passing them on to shoppers.

“Nationally, retailers are seeing price increases due to higher costs for wheat, corn, soybeans and milk, along with increased energy and transportation costs,” Catherine Reuhl, communication specialist for the chain, said. “Harris Teeter prefers not to pass on price increases to its customers. But it is difficult for the company to absorb all of the cost increases we are receiving from manufacturers.

“Harris Teeter has implemented a variety of cost savings techniques in its stores as well as at its distribution centers,” she said. “When the price of goods and fuel decrease, Harris Teeter will pass those savings to its customers.”

O’Brien said as the cost of everything continues to increase and jobs decrease or job growth freezes, people will do what they can just to get by.

“As food and energy consume a larger share of consumer’s take-home pay, they are having to sacrifice purchasing other goods and services, and those substitutes are very painful for these families,” he said. “I’ve seen people pull up to the gas station and put $6 into a huge pickup truck, and it makes you wonder if the $6 they used on gas was their lunch budget for the week.”

While the CPI increase is taking that much more out of peoples’ paychecks, they are suffering on the other end, as weekly wages fell 0.9 percent in June. It was the third month of decline and the biggest hit to the work force in four years.

Sherry Zimmerman said she knows all too well about sacrifice.

She is traveling cross-country with her family in a motor home.

During her stop at an IGA in Darlington, Zimmerman said because she still cooks for her three children and husband while on the road, she’s found it’s cheaper to frequent roadside stands and farmer’s markets for her fresh produce

“Honestly, it costs about $150 to $200 a week to feed my family,” she said. “Coupons don’t cut it anymore by themselves. It comes down to shopping at discount grocery stores and getting off-brand foods.”

Zimmerman said she’s willing to choose her family’s well-being rather than a certain brand of food.

“You want to feed your family and be able to send them out into the world with clothes that fit and the things they need for school,” she said. “I want my family to be able to enjoy life and in today’s economy, cutting corners is really the only way to offset the unexpected increase in my grocery budget.”