Inflation hits Minnesota’s smaller cities and rural areas harder than Twin Cities

In October, White House Chief of Staff Ron Klain endorsed a tweet claiming that inflation and supply chain issues affecting the United States were “high class problems.” They are not. As I pointed out in December, inflation hits poor and rural Americans hardest. New data supports this.

I noted recently that inflation in the Midwest is outstripping the rate for the United States generally. The Star Tribune reported this weekend that:

Since the U.S. economy last spring took its first big steps out of the pandemic downturn, prices have raced upward at the fastest pace in decades. Smaller towns in the Midwest are among the hardest hit.

Rochester; St. Cloud; Mankato; Fargo, N.D.; and La Crosse, Wis., reached an inflation rate above 8% through the last months of 2021, Moody’s Analytics found in an analysis of smaller markets. Duluth was just below that level.

The U.S. as a whole reached 7% — the highest level since 1982 — in December’s consumer price index. Urban market data, which comes out every other month, showed the Twin Cities with an inflation rate of 6.9% in November, the latest month available.

For the broader Midwest, inflation was 7.5% in December, far above the 5.9% rate in the more heavily populated northeastern states.

The reason for this?

People in the Midwest and in less populated areas tend to spend a bigger portion of their budgets on the very items undergoing the biggest price increases. Gas is a big one, the price of which has risen nearly 50% in the last year.

On top of that, living in a colder place than most Americans, Minnesotans also spend more on needs such as heating. The price of natural gas has risen 24% over the last 12 months.

The high rates of inflation which Americans are currently facing — especially here in Minnesota — cannot be dismissed by beltway hacks as “high class problems.” It is having a real, painful impact on ordinary Minnesotans.