Rural Americans are hit hardest by inflation, especially because of higher fuel costs, Iowa State study indicates

Inflation is hitting the most rural Americans harder than their urban and suburban peers, according to preliminary estimates in a report from Iowa State University Extension. The report examines non-metro households in communities with fewer than 2,500 residents or those "in the open countryside."

Consumer prices in the U.S. rose by 8.6% between May 2021 and May 2022, the federal government reported in June. That inflation is caused by three main factors, reports Iowa State sociology professor and extension rural sociologist David J. Peters:

• Strong, pent-up demand because of the pandemic. Households put off many purchases during the pandemic and saved up money because of reduced spending, higher wages and government aid. Now consumers are making those delayed purchases all at once and there isn't enough to go around.
• A scarcity of goods because of the increased demand and supply chain disruptions.
• Increased demand for housing and services.
• Minor reasons for inflation include the inflationary impact of government pandemic relief and market uncertainty due to the Russian invasion of Ukraine.

"The current wave of inflation has made rural families more vulnerable than urban families due to rising gasoline prices, higher fuel oil costs to heat their homes, and the ability to purchase less expensive used cars," Peters reports. "In 2022, rural household expenses rose by 9.2% overall, but earnings also rose by 2.6%. The net effect cut rural disposable incomes by 38.0%. Expenses now consume 90% of rural take-home pay. Urban disposable income only dropped by 17% due to slower inflation rates (7.6%) and faster wage gains (4.3%)."