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Gas Prices Drive Up Living Costs

Posted on: Friday, 16 September 2005, 09:00 CDT

Sep. 16--Gas prices along the Wasatch Front may be at record highs, but the cost of other necessities -- including food and clothing -- barely budged at all last month.

The cost of living along the Wasatch Front rose a marked 1 percent in August -- the seventh consecutive month of increases. But virtually all of the inflation was due to the jump in gas prices.

Nationally, inflation rose 0.5 percent. Core prices -- which exclude the more volatile categories of energy and food -- rose only 0.1 percent, a small amount that was less than anticipated.

"The good news is that there is really no evidence of inflation -- in Utah or nationally -- other than with gasoline," said Sterling K. Jenson, regional managing director for Wells Capital Management, an arm of Wells Fargo & Co. that produces the Wasatch Front area Cost of Living Report.

More good news: Gas prices in Utah could drop by as much as 30 cents by year's end, Jenson said.

Gasoline prices in Utah reached a record average of $2.91 on Sept. 10 but have since fallen two cents to an average of $2.89, travel services agency AAA Utah reported Thursday.

AAA also is predicting the cost of gasoline in Utah and other states will fall later this year. But prices probably will not begin to drop by a large margin until sometime in October, when most refineries damaged by Hurricane Katrina come back on line, said Rolayne Fairclough, AAA spokeswoman in Utah.

Retail gas prices jumped in the days after Hurricane Katrina ravaged the Gulf region.

One category of goods -- groceries -- actually declined, by 0.2 percent, along the Wasatch Front. August marked the third consecutive month of decreases for food consumed at home. Restaurant prices were unchanged.

The only goods-and-services category that rose in August was clothing, but the increase was a negligible 0.1 percent.

Health care expenses, after rising significantly in recent years, also barely budged last month. In the past six months, health-care costs rose along the Wasatch Front rose only 0.1 percent -- good news for Utahns who have seen their health insurance premiums jump dramatically over the past three years.

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Copyright (c) 2005, The Salt Lake Tribune

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WFC,

Source: The Salt Lake Tribune

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