Younger, Rural US Households Have Lower-Than-Average Inflation

(Bloomberg) -- Younger and rural US households, as well as those that are Hispanic, middle- and upper-income and non-college-educated are experiencing lower inflation than the national average, according to a report by the Federal Reserve Bank of New York.

That’s likely because these groups are more exposed to transportation costs, which have been declining in recent months, the report said. On the other hand, low-income, Northeastern, college-educated and urban households are feeling higher-than-average inflation since those expenses make up a smaller share of their overall spending.

The New York Fed used the Bureau of Labor Statistics’ Consumer Expenditure Survey to break down how higher prices affect different Americans across geographic, demographic and socioeconomic groups. It pertains to the latest consumer price index data through August (September data will be released Thursday.)

Here’s a look at the inflation data in three charts:

Hispanic households are experiencing inflation that is 0.4 percentage point lower than the national average while Asian American and Pacific Islander households are experiencing inflation that is 0.3 higher percentage point than the national average. Transportation makes up a greater share of expenses for Hispanic Americans while Asian Americans spend a slightly larger proportion on housing.

Housing and food make up a greater share of expenses for lower-income households compared to the top 20% of earners, according to the report. That means those in the bottom 40% of income are hit harder by inflation.

Rural households were more vulnerable to inflation in the pandemic in part because their incomes tend to be lower, so they had less wherewithal to keep pace with inflation. But as the price of gasoline dropped from its June 2022 peak, that eased the burden for many rural households who are likely to drive more.