Inflation up after hike in gas, food costs

Steeper prices for gasoline, food, clothing and medical care pushed up inflation 2.3 percent last month in the metropolitan area compared with a year earlier, according to a report released Friday.

The federal Bureau of Labor Statistics said prices grew faster year-over-year in March than at any time since January 2010, when they gained 2.4 percent in the 31-county region that includes Long Island.

Regional labor commissioner Michael Dolfman blamed the recent inflation surge on gas prices, which rose 28.3 percent from March 2010. The cost of regular grade topped $4 a gallon on Friday in Nassau and Suffolk counties.

AAA reported pump prices for regular averaged $4.022 on Long Island, up from $3.998 on Thursday. A year ago, regular was $3.004. It last averaged $4 a gallon on Aug. 13, 2008.

While gasoline prices spiked, home heating oil and other energy used in homes rose only 1.2 percent last month compared with a year earlier.

The cost of groceries, driven by increases in fish, seafood and milk, was up 3.3 percent. Restaurant and takeout meals grew 1.7 percent.

Excluding energy and food, the regional Consumer Price Index rose 1.3 percent in the past year. Clothing gained 3.2 percent as retailers attempted to pass along higher cotton prices, while health care increased 2.6 percent.

"We're beginning to see substantial inflation at the consumer level and it looks to me that it's more than food and energy," said Pearl Kamer, chief economist at the Long Island Association business group.

Kamer and others predicted more inflation next month as hikes in wholesale prices are reflected in retail prices.

Shoppers appear to be opening their wallets less. Sales tax collections were up only 1.7 percent on Long Island last month compared with a year earlier. Nassau collected 2.4 percent more in receipts while Suffolk received an extra 1 percent.

However, collections for the January-March period were flat over 2010 figures.

"That speaks to the weakness of the consumer sector," Kamer said. "I think we will have a flat economy for the foreseeable future, but I don't think we are in for a double-dip recession."

Herman A. Berliner, an economist and provost at Hofstra University, was less certain, saying inflation could derail the fragile recovery.

"There are some clouds," he said, referring to Friday's report, "on what was looking to be a far sunnier forecast. This comes at a time of widespread government retrenchment, which also serves as a drag on the economy."

The increase in the regional price index was less than that of the national index, which gained 2.7 percent last month compared with a year ago. The figures are not seasonally adjusted.

Higher gas prices are affecting the decisions consumers make on other purchases.

At the Gulf service station on Route 110 in Melville, Anthony Capuano expressed frustration as he filled the tank of his Ford F-150 truck. "The oil companies are gouging us," said the 54-year-old carpenter from Islip Town. "What are you going to do? I have to drive for work, so I'm cutting back on other things."