Olivia Bannon of Greensburg, doesn’t need a report on the government’s consumer price index to know that prices have risen the past few months.
A report Wednesday said inflation jumped to 4.2% in May, its highest level in three years.
“I’m feeling the pressure … financially and being able to provide for myself comfortably,” said Bannon, 23, who just graduated from Seton Hill University in Greensburg, where she studied to be a physician’s assistant.
“It makes me a lot more aware of what I’m spending and where I can cut back on unnecessary things,” Bannon said.
Consumers are not likely to get relief from the high inflation anytime soon, according to Robert Strauss, professor of economics and public policy at the Heinz College of Information Systems and Public Policy at Carnegie Mellon University in Pittsburgh.
Inflation in May was up from 3.8% in April, the U.S. Department of Labor said. It was the third consecutive monthly increase.
“It’s most evident in gas and energy prices,” said Strauss, who worked for the administrations of presidents Richard Nixon and Gerald Ford.
The prices for fuel rose in response to the fighting between Iran and the United States, which has bottled up ocean-bound freighters that carry oil and other goods from navigating the Strait of Hormuz along the Iranian coast, Strauss said. While some ships have been able to move through, a backlog has remained since the war began in February, Strauss said.
“The whole supply chain is getting hit,” Strauss said. “The uncertainty is going up and, in general, and we can’t control it.”
The price of gas has fallen in the past few few weeks, after hovering close to $5 a gallon earlier this spring. The statewide average was $4.29 a gallon Wednesday, but the price at the pump is far higher than the $3.22 a gallon average a year ago, according to the AAA motor club.
There likely will be higher prices this year for the fruits and vegetables, Strauss said. Wages are likely to rise because of the demand for labor. There will be fewer people picking fruits and vegetables since a crackdown on immigrant labor that worked the farm fields during harvest season, Strauss said.
“The agriculture sector is hurting,” Strauss said, “and in Pennsylvania, that is a big deal.”
It’s a big deal because agriculture remains the largest industry in the state, accounting for $10.3 billion in the market value of products sold, according to the Pennsylvania Census of Agriculture for 2022, the latest year for which data is available.
The rise in inflation during the Trump administration does not bode well for Trump’s demands the Federal Reserve lower interest rates that impact mortgages, auto loans and borrowing by businesses.
Inflation is now well above the Federal Reserve’s 2% target, which it has surpassed for more than five years.
New Federal Reserve chair Kevin Warsh will preside over his first policy meeting next week, when the central bank is expected to keep its key interest rate unchanged.
Outside of energy costs, price increases last month were not as dramatic, a sign that sharply higher inflation hasn’t yet spread throughout the economy. Should the Iran war end and oil and gas prices decline, headline inflation could begin to cool.
Dave Firek, from New Kensington, is optimistic about the inflation rates because “it can only get better.”
“I’ll live with it,” Firek said. “You’ve got to. You have to have food, have to have gas. (But) I’m OK. I’m retired. … I’m not going to complain.”
Julia Lesney, 45, from Natrona Heights, also hopes inflation rates have peaked and believes the government is capable of finding a solution to the issue. However, she fears an impulsive decision by policymakers could make things worse.
“Hopefully we can maintain (the inflation rate) here and try to calm down as a country and figure out a way to work together,” Lesney said.
Lesney tries not to think about the amount of money she’s spending on groceries, gas and other necessities because she can’t control prices. But when she checks at the end of every day, she’s surprised by how much those necessities cost her.
“It is definitely noticeable, and we have to find different ways to pinch a penny,” Lesney said. “It’s so sad.”
Diane Labecki of Lower Burrell is worried already about how she will pay for her heat when winter arrives. Labecki said she’ll have to cut back on spending and “just live very frugal” in order to afford her basic necessities.
“It’s going to take a long time to get back to where we were,” Labecki said.
Leonard Ozepy, 59, from New Kensington, said because of higher grocery prices he has to ration his creamer, putting in one scoop into his coffee every morning instead of two.
“It’s just killing everybody,” Ozepy said.
“It’s crazy: A pound of hamburger costs almost as much as minimum wage. You have to work an hour to get a pound of hamburger,” Ozepy said.
According to data from the Federal Reserve Bank of St. Louis, the average cost of a pound of raw ground beef rose to $7.06 in May.
Said Strauss: “All of these these things are a pressure” on the economy.
The Associated Press contributed to this story.