By Guy Page
Good news, I guess, for Vermonters concerned about the rising cost of everything. Among the 50 states, the Green Mountain State is the second-least hard hit by inflation.
Only New Hampshire, our neighbor to the east, is better off.
According to a study by Merchantmaverick.com, “the three states where inflation is hitting hardest are Louisiana, Florida and Tennessee. Besides a regional relationship, these states also share below average median incomes, which means: as prices rise, consumers feel the pinch even more.”
Southern states that have attracted new residents fleeing the northeast and California are, to a degree, victims of their own success, the study finds:
- Southern states may have suffered because they have been attractive to new residents. Many Southern states have welcomed population growth or people from the Northeast and West Coast. This was forcing up housing costs even before inflation truly set in.
- The Northeast has gotten off relatively easy. The Northeast has several states least affected by inflation. The region had generally higher prices prior to the pandemic, but the rate of increase there is lower than the national average. Also, higher median household incomes have made any increases easier to bear.
- Some states appear to be ready to handle any economic upheaval. Merchant Maverick recently presented the results of its other study: “The Best States to Survive The Next Recession.” Interestingly, several of the states found to be resistant to a recession are also among the ten states suffering least from the current inflation. These states are Nebraska, Wisconsin and New Jersey.
Study methodology includes:
- Size of state government reserves (17.5%)
- State GDP per capita (17.5%)
- Debt-to-income ratio (17.5%)
- Unemployment insurance coverage (17.5%)
- Unemployment rate (10%)
- Housing affordability (10%)
- State income tax rates (6%)
- Total state GDP change from 2007 to 2010 (4%).
“When we think about inflation, we tend to think of it affecting everyone similarly,” said Julie Titterington, Editor-in-Chief, MerchantMaverick.com. “These state-to-state differences in the impact are both fascinating and sobering.”