Report: Louisiana tops list as state most impacted by recent inflation

By Victor Skinner | The Center Square contributor

A recent study shows southern states have been hit hardest by raging inflation and Louisiana tops the list.

When considering change in the consumer price index, regional price parity, state sales tax rates and median household income, southern states are struggling the most with inflation, according to the small business website Merchant Maverick.

“Inflation is a problem everywhere, but the price of necessary staples has risen faster in the Southern region of the country,” according to the report. “In particular, Southern states with high sales tax and low median household income may be feeling the biggest squeeze.”

Researchers used data from the U.S. Census Bureau, the U.S. Bureau of Labor Statistics, Bureau of Economic Analysis and the Tax Foundation to rank states based on the impact of inflation.

Number one on the list: Louisiana.

“Burdened by the highest sales tax rate in the nation (tied with Tennessee) and one of the lowest median household incomes ($51,707, the lowest in the nation after Mississippi), the Bayou State has suffered dearly under the current inflationary economic circumstances,” Merchant Maverick reports.

“To make matters even worse for Louisiana, the US South has seen some of the steepest price hikes nationwide,” according to the report. “Transportation costs in the region rose 20.6% in the 12 months ending April 2022 compared to the previous year. Housing costs rose 7% — more than any other region in the US (with the exception of Maryland and Delaware, where housing also rose 7%).”

Data for the analysis consisted of 10 metrics including year-over-year Consumer Price Index changes for medical care, recreation, education and communication, transportation, housing (including utilities), food and beverages, and apparel, as well as the regional price parity and state sales tax rates.

For each metric, states were given a score out of 100 based on each state’s rank, with the best-ranked state scoring 100 and the worst-ranked state scoring 0. The individual metrics were then multiplied by specific weights to achieve an overall score for each state.

Louisiana’s overall score was 48.2, two points below the second worst state of Florida. Louisiana ranked 22nd for medical care, first for recreation, 26th for education and communication, 22nd for transportation, 35th for housing, 10th for food and beverages, 35th for apparel, 21stt for regional price parity, 49th for state sales tax, and 49th for median household income.

Florida was second behind Louisiana for states hit hardest by inflation, followed by Tennessee, Georgia, Arkansas, Texas, Alabama, Oklahoma, Mississippi, and South Carolina.

The top 10 states least impacted by inflation are all in the Northeast and Midwest, with New Hampshire the least impacted, followed by Vermont, Connecticut, Massachusetts, Maine, Pennsylvania, New Jersey, Iowa, Wisconsin and Nebraska.

“The Northeast, and New England in particular, are experiencing lower inflation rates than the rest of the country (although they are seeing nationally high prices for recreation, education, and communication),” according to the report. “States with lower sales tax and high median income did well even considering the region’s generally high regional price parity.”

New Hampshire’s rank as the state least impacted by inflation comes from a complete lack of sales tax and high median household income, which outweighs relatively expensive goods and services, researchers wrote.

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