Written by Mada Mouton, CNN
In January, consumers across the region forked over some $100 million more than a year earlier to heat their homes. That’s thanks to the strengthening U.S. dollar, which is driving up the prices of foreign-made goods that flood stores throughout the region.
It’s also creeping up the costs of what retailers — in the form of things like heating bills — have to charge, pushing inflation to new heights.
By comparison, gas and heating costs in January dipped slightly, according to the United States Energy Information Administration.
“The situation with energy prices is a very big part of the story,” says Bernard Baumohl, chief global economist at the Economic Outlook Group. “This is an escape valve for the real consumers of energy in the region, in part because labor costs have also gone up because of the high dollar.”
The company that makes windshield wipers for vehicles sold by the usual suspects has experienced the pain.
“Within General Motors’ plant in Odessa, New Jersey, the one behind United Auto Workers Local 221, approximately 6,000 people are employed, and their wage levels are one-third higher than the rest of the GM factories in the United States,” the New York Times reported.
The rising costs of commodities, gasoline and heaters, in turn, have fueled a premium in home equity, noted Scott Baker, economic professor at Harvard University.
“We are at a point where we can buy houses in other parts of the country that might need $200,000 in investment to make them accessible, which is where housing affordability is hurting,” he said.
Meanwhile, Chris Burrows of the local government of Somerville, Massachusetts, sees higher prices in his city’s homeless shelters.
“As incomes are often too low to cover a home and utility expenses, we see more people turn to shelters,” Burrows says. “There is now a lot of uncertainty around housing, but it’s difficult to tell which will be most significant.”