Economist on how inflation is impacting rural Americans

(NewsNation) — Inflation is down nearly 3% from last summer’s peak, but the consumer price index — the main gauge of inflation — doesn’t account for all of America. That’s because it only measures the average prices urban consumers pay for a basket of basic products.

Rural America is left out of that data — 14% of Americans who live in rural areas, or about 46 million people, are left out of this calculation.

So some economists say that rural America is being totally left out of the equation, even though people living there are likely to suffer more from rising prices.

Americans living in rural areas are likely to face different financial pressures and have different consumption habits than Americans in urban areas.

Melissa Armo, an economist, said she doesn’t understand why they rural populations are mostly left out of the calculation, especially because more people have moved to rural areas since the coronavirus pandemic.

“I think the problem is that people that live in rural communities, it costs them more gas to get to the grocery store, it takes them longer to get there, it costs them more to heat their homes, and clothe their families. So I think it really has affected people living in rural America a lot more than the average person,” she said.

Higher gas costs have contributed to an urban-rural inflation gap between families in rural and urban areas, according to a July 2022 Iowa State University report. This is likely due to vehicle ownership and longer commutes between the two areas.

Rural Americans would spend more on vehicle purchases out of necessity vs. urban Americans who have options like public transit, walking or biking.

For example, if gas is $4 a gallon, Americans living in rural areas have to pay more every time they need to purchase basic goods like groceries and clothes.

“When you think about it, you’re driving, not just to get groceries, to get to work, to get everywhere. If you live an hour, or in some of these cases some people live two hours away from their jobs, it can take a long time,” Armo said. “Then, of course, you add that on to the cost of your gas back and forth to work and home every day. It really can impact people.”

Food costs also differ between urban and rural Americans. Eating out would be more expensive for Americans in rural areas due to travel, so they typically eat in to cut costs. However, rural Americans often times spend more on groceries, and fewer choices for eating out may contribute to this.

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