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D.C. Memo: Latest inflation news good, especially in Twin Cities

Plus: CDC concerned about an uptick of COVID hospitalizations.

Downtown Minneapolis
Downtown Minneapolis
MinnPost photo by Corey Anderson

WASHINGTON – Inflation is slowing down, especially in the Twin Cities.

The U.S. Bureau of Labor Statistics released its latest consumer price index on Thursday, which showed inflation rose 0.2 % in July, the same increase as a month before in June, and 3.2% for the past 12 months. Economists said that’s good news because the modest rise in prices indicates that the Federal Reserve’s policy of relentlessly raising interest rates is working to get to its goal of a 2% or less annual inflation rate. The federal government’s latest economic data also shows that there is no place in the United States that has beat inflation as fast as Minneapolis and St. Paul.

In May, the Twin Cities became the first major metropolitan area to have annual inflation fall below the Federal Reserve’s target of 2%. Thursday’s CPI report showed that inflation in the Twin Cities fell to 1.8%, the lowest of any region in July.

That low inflation rate was attributed to efforts to keep housing costs down, an effort helped by the rise of apartments and condo construction in the region. Since 2017, rents have increased by just 1% in Minneapolis, compared with 31% in the United States overall, according to a recent report by the Pew Charitable Trusts.

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While Minneapolis experienced the lowest rent hike in the nation, New Rochelle, N.Y., Portland, Ore. and Tyson’s, Va., also have had rental increases that were much lower than the national average.

“In these jurisdictions, policymakers expressed a goal of improving affordability and enabled more housing as a mechanism for achieving it,” the Pew report said. “They have succeeded in keeping rent growth low even while rents have soared in the U.S. overall and in nearby cities and towns. That has helped local tenants save thousands of dollars per year in rent relative to growing places that have placed greater restrictions on new housing.”

It’s not all good news when it comes to inflation in the Twin Cities, though. Food prices have remained persistently high in the region.

Still, a Bloomberg calculation using inflation and unemployment data showed the Twin Cities metro area had one of the lowest “misery” rates in the nation.

CDC concerned by summer bump in COVID hospitalizations

The United States is experiencing a bump in coronavirus transmission for the first time since the public health emergency ended in May, but the hospitalization rates in Minnesota remain some of the lowest in the country.

The Centers for Disease Control and Prevention, which stopped tracking positive test results when the public health emergency ended, said for the week ending July 29, COVID hospital admissions – nationwide – were at 9,056. That’s an increase of about 12.5 % from the previous week. In Minnesota the hospitalization rate for that week was 47.

While the latest hospitalization rates are much lower than past peaks, including the 44,000 weekly hospital admissions in early January, the CDC said it will closely monitor a rise in the COVID virus in the nation’s sewer water that has been detected since June.

The bad news is that obtaining the fullest protection from the new strain, called XBB.1.5, will require a new vaccine, which is under development by Pfizer, Moderna and Novavax. The Food and Drug Administration would have to approve the new vaccines produced by the drug makers and the CDC will then issue recommendations for their use.