For Utahns, inflation at top of economic fears

Paying more for groceries than you were last year? How about gasoline? Are health insurance premiums gobbling up more of your paycheck?

Higher prices for necessities are taking a bigger bite out of Utahns' pocketbooks — so much so that for many it's their family's top financial concern.

More than half of respondents to a recent poll conducted by The Salt Lake Tribune say rising prices for gasoline, food and health care are their No. 1 worry.

Nearly 30 percent were most anxious about food and gasoline prices; another 23 percent said it was rising health care costs. Other recessionary nightmares were much farther down the list, such as loss of retirement income (No. 3 at 17 percent) and debt levels (a distant 10 percent). Even falling home values were rated No. 1 by only 8 percent of respondents.

The poll results demonstrate that Utahns have "real concerns" about inflation, said pollster Brad Coker.

But are runaway prices a reality that matches the level of unease? Data from a variety of sources suggest they are. Although the cost of some items is on the decline, such as for TVs, automobiles, computers and other electronics, the cost of many items we can't do without — those we buy each week — have increased.

Combine those increases with the hits to the pocketbook, such as the pay or job cuts that many Utahns have taken over the past several years, and the price increases are difficult to take.

For larger families, such as that of Angela Burton and husband Scott, who have five children, ages 3 to 14, higher costs for food and gasoline are all-consuming. "I know for a fact I'm spending a lot more on necessities like food and gas," said Angela Burton, who said she's noticed that food containers seem to be getting smaller and more costly. "And the most frustrating thing is that you can't do without the basics."

And gasoline is certainly one of those basics.

Although fuel costs in Utah are still below the state's record average of $4.22 per gallon set in July 2008, pump prices remain significantly higher than one year ago — an average of $3.54 per unleaded gallon, up from $2.92. Those with diesel-powered vehicles are paying an average of $3.84 per gallon, up from $3.02 last year. Nationally, unleaded is averaging $3.61 per gallon, up from $2.69.

Over the past 12 months, transportation costs — largely gasoline — have risen by nearly 8 percent annually, the most of any category measured by the Wasatch Front Consumer Price Index, which is compiled by Zions Bank in Salt Lake City. The medical care category registered the second-highest increase, 2.5 percent. Food at home had the third-highest increase, 2 percent.

Overall, when all cost categories are factored in, inflation along the Wasatch Front as measured by the index is running about 3 percent, which is the high-end range of what most economists consider to be ideal, said Randy Shumway, CEO of Cicero Group, which tracks the data for Zions Bank.

Although inflation in Utah isn't anywhere near what most experts consider to be a troubling level of 4 percent or more year-over-year, people are especially sensitive to the effects of higher food, gasoline and health insurance costs because of all the other economic backpedaling they've done in the past several years, Shumway said.

Worries about inflation are "a very real, tangible feeling that's exacerbated by the fact we've endured the deepest recession since the Great Depression," he said. "People hurt, they are uneasy."

Home values along the Wasatch Front are off by around one-fifth to as much as one-third or more, depending on the neighborhood and price range. Stocks for many aren't delivering. Key indexes are way off from their peaks in 2007 and have seen double-digit swings in value much of the summer. In addition, many families have been coping with pay cuts, job losses and lack of the raises and bonuses they received when times were good.

Despite increases in grocery prices — including for meat, fresh produce, bread and other staples— restaurant meals increased only 0.3 percent over the past year, according to the Zions Bank index. That's due in great part to the fact that restaurant food isn't a necessity and during bad economic times people will cut back on eating out rather than pay higher prices.

"It's tough to pass [higher food costs] on right now," said Daniel Hobbs, general manager of Brio Tuscan Grille, a restaurant opening on Sept. 12 at Fashion Place mall in Murray.

Not so with the cost of health care. Rising prices for care — and for health insurance — are a huge issue for families and individuals in Utah and the rest of the nation. And it's not only premiums that keep going up. It's also the amount of out-of-pocket costs that are not covered by insurance, such as co-payments and deductibles that are rising.

The Seright family of Magna, for example, is not only paying more in health insurance premiums each year, but also has a $700 deductible that must be met before coverage kicks in.

Like many Utahns, Coralie Seright has tried to cut back in areas she can control. She and her family clip coupons, try not to eat out much and carefully monitor spending. She's even created her own blog, Utahcoupondeals.com, which is devoted to saving money. There's also an ongoing discussion on needs and wants, and what the family can live without.

Retired school teacher Ruby Hammel of Cottonwood Heights is doing the same.

"The basics — milk, cereal, bread, butter and produce — it all costs more," Hammel says. But she doesn't want to be driving around too much to hunt for bargains. "I use about a tank of gasoline a week, which means it costs about $50 to $60 to fill up my car now instead about $30 to $40," she said.

Hammel said the recession has annihilated the cost-of-living increases with Social Security and her pension that used to cover rising prices. Her Social Security income hasn't increased for several years, and the cost-of-living increase with her pension last year didn't come close to keeping pace with inflation.

At 83, Hammel continues to teach tennis during the summer months. "I can use the money," she said.

But she tries not to complain. If this recession has reminded her of one thing, it's the fact that you can always find someone who has it worse.

"I know there's a lot of people who are in a less fortunate position than I am. I know there's people who have to choose between food and medication — and I'm grateful that I'm not there yet."

lesley@sltrib.com

Twitter: @cheapchick —

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QUESTION • Of the following, which ONE is your greatest financial concern:

29% • Rising prices for necessities, such as gas and food

23% • Health care costs

17% • Loss of retirement income

10% • Debt levels

8% • Falling home values

6% • Unemployment

2% • Volatile stock market

1% • Low savings rate

4% • Other/Not Sure

Tribune poll of 625 registered Utah voters was conducted Aug. 8-10 by Mason-Dixon Polling & Research, Inc. The margin of error is +/- 4 percentage points.