Prices for gas and groceries like milk, bread, meat and eggs have shot up in Georgia and across the U.S. over the past year. (Credit: Brittney Phan for State Affairs)

On Wednesday, the Federal Reserve hiked interest rates higher than it has in nearly three decades, aiming to wrangle inflation levels that have caused rent, groceries and gas prices to soar faster in the Atlanta area than any other urban zone in the country, except Phoenix. As of April, prices overall in the Atlanta area were nearly 11% higher than they were a year ago.

But don’t expect a break on stiff gas and food bills anytime soon, local economists say. Inflation will likely continue taking its toll on Georgians struggling to stretch their dollars at the pump and grocery shelves for at least another year or more. And there’s little Georgia government officials can do about it.

“I think we’ve exhausted the state-level options,” said Gopinath Munisamy, head of the Department of Agricultural and Applied Economics at the University of Georgia. “In my view, the federal government has more tools than the state government on this issue.”

Grocery Stores

Kelsey Tyree, a software company owner in the Savannah area, said she’s resorted to “small-time couponing” as a tactic to cover her family’s groceries. She hops from Kroger to Publix to Dollar General, hunting for deals.

“If Dollar General has a coupon sale for detergent, that’s where I’ll get my detergent,” said Tyree. Her grocery runs have spiked from $200 every other week last September, to $300 when her newborn son arrived in January. Now, she’s shelling out $400. “It’s a whole day trip just going to different stores.”

Prices have been punishing for grocery stores in Georgia and beyond. In Atlanta, a gallon of milk has jumped 25% to $4.29 last month from $3.26 in May 2021, according to the U.S. Department of Agriculture (USDA). Eggs across the South have risen a staggering 43% to $2.60 from $1.49 over the past year.

Some foods have also gotten scarce outside Atlanta. Shavokia Bryant, a nurse who runs the Atlanta-based John-Trell Foundation, travels between Atlanta, Macon and Albany giving food to the homeless. Even though it’s more expensive, she buys whole chickens in bulk in Atlanta, makes hot meals out of them, and brings them to homeless people in Macon and Albany where bulk chicken is harder to come by.

“Nine times out of 10, Albany doesn’t have chicken cases,” Bryant said. “We’ve been blessed with the means to afford things and still move forward with our mission. But for people who cannot afford it, I feel bad for them.”

Shavokia Bryant prepares and gives food to the homeless in the Atlanta, Albany and Macon areas through the John-Trell Foundation. (Credit: Shavokia Bryant)

Residents throughout the state are wondering what more, if anything, the state can do to help?

Gov. Brian Kemp used executive powers in April to reduce limits on how much weight commercial truckers can carry and the hours they can drive – a move aimed at clearing up backlogs on trucking routes to hasten food and other goods to local stores.

Several economists interviewed by State Affairs, however, suggested the governor could temporarily suspend some amount of local sales taxes to give grocery shoppers some price relief. Charles Bullock, a University of Georgia political science professor, said a Georgia governor has not suspended sales taxes in the last 50 years. Kemp’s office did not immediately respond when asked if the governor is considering a sales-tax suspension.

Outside tax breaks, the state Department of Agriculture has not asked the USDA to relax rules on food production or distribution requirements that might help lower food costs, said agency spokesman Bo Warren. The agriculture department has recently started work on a new program to send Georgia-grown farm products directly to local food banks.

That program should help boost donations to local food pantries, churches and other groups that have seen huge demand amid the Covid-19 pandemic and high inflation, said Jon West, a vice president with the nonprofit Atlanta Community Food Bank. Atlanta-area food pantries serve around 500,000 each month, he said – up from around 300,000 before the pandemic. And those that are served are from the poor to the middle class.

“Inevitably, as food costs go up, those donations are harder to get,” West said. “Hopefully some folks step up and fill that gap, but that just doesn’t always happen.”

The U.S. House of Representatives on Thursday passed the “Lower Food and Fuel Costs Act” that would send farmers $750 million to buy equipment that would help them reduce fertilizer and fuel costs. All six of Georgia’s Democratic congress members voted in favor of the bill. All eight Republican members voted against the bill.

Gas Stations

Gas is so expensive now that Karina Figueroa, a stay-at-home mom in Dahlonega, doesn’t visit her mother in metro Atlanta twice a week anymore. It takes $50 to fill the tank in her husband’s car – and he needs every bit of it for traveling to Cobb County for his job as a construction worker, a commute that takes more than an hour each way to complete.

“There’s no point in me taking a joy ride to visit my mom when he has to use gas to [get to] work,” Figueroa said. “Gas is ridiculous.”

The graph shows the rise in the consumer price index for the metro Atlanta area from April 2019 to April 2022. (Credit: U.S. Bureau of Labor Statistics)

While Georgia’s gas prices are hovering below the $5 national average at $4.49 for regular-grade fuel, they’re still significantly higher than the $2.90 for regular fuel a year ago, according to AAA’s gas-price survey.

Tyree, the software-company president in Savannah, has used her couponing method to rack up gas discounts at stations run by Kroger, which lets customers shave off costs from pumping gas whenever they shop for groceries. Still, gas has leapt from $30 to fill up Tyree’s Subaru to now “pushing $60.”

Bruce, the Atlanta bartender, also takes advantage of the Kroger deal. She tries to fill up near her suburban home in Stockbridge, where she said gas is about 30-cents cheaper than in Atlanta. But her commutes around Atlanta, where public transit isn’t easy enough to reach where she needs to go, still pack a punch to her wallet.

“What are you going to do?” Bruce said. “You’re not going to fill your tank up? You have to pay the prices.”

Ashley Bruce is one of many Georgians juggling finances to cope with high gas and grocery prices amid inflation. (Credit: Ashley Bruce)

Amid global shipping snarls and oil disruptions in Russia, local economists say there’s little else Georgia officials can do to lower gas prices besides suspending the sales tax on gasoline, which Kemp did last month. Suspending the gas tax hacks off around 30-cents per gallon for Georgia drivers. The current suspension order is set to last until mid-July.

Electricity & Air Conditioning

With auto gas and food prices rocketing across Georgia, residents have largely been spared similar cost increases on their monthly energy bills. Georgia Power, which serves most of the state’s homes and businesses, needs approval from the state Public Service Commission (PSC) before recovering higher fuel costs with customer charges. The utility hasn’t sought that approval yet, said commission spokesman Tom Krause.

Overall, Georgia homes and businesses consuming an average 1,000 kilowatt-hours per month – roughly the national average for a typical American home – hasn’t changed much since last year, hovering around $125 between winter 2021 and winter 2022, according to PSC data.

Georgia Power has not yet asked state regulators for approval to hike customer charges to cover higher fuel costs amid inflation. (Credit: Wikimedia Commons)

Local energy providers that do not require PSC approval to change billing rates have hiked costs over the last year. Average monthly bills shot up $10 or more for some municipal and electric cooperative customers in North Georgia’s Blue Ridge, south of Atlanta in College Park, and in South Georgia’s Irwin County.

Despite reassurances from state regulators, some Georgians still wonder how much inflation is creeping into their monthly energy bills. Tyree says her bill’s gone up about $50 since summer started – from around $150 to $200. But that could just as easily be blamed on running the air conditioning more often with a newborn in the house, she acknowledged. 

“It’s kind of hard to say just because Savannah’s terrible this time of year,” Tyree said. “Everybody’s electric bill is really high.”

What’s Next?

Economists are closely watching how the Federal Reserve’s interest rate hike on Wednesday will affect demand and borrowing. They expect the central bank to bump in interest rates again by September, unless inflation cools off significantly over the next month.

In the meantime, local economists tell State Affairs that Georgians should strap in for high gas and grocery prices for at least another year. Tibor Besedes, a Georgia Institute of Technology economics professor, said that means Georgians on tight budgets will need to clamp down on their personal spending.

“The best that consumers can do is try to adjust their consumption patterns,” Besedes said. “Shop for deals, perhaps shop in cheaper stores, and driving-wise, perhaps combine or condense trips.”

Alessandro Marazzi Sassoon contributed to this story.

Resources

• Georgia Food Pantries: Find your local food pantry
• Apply for SNAP benefits: Online portal
• Georgia Attorney General’s Office: Report price gouging

Join The Conversation

What else do you want to know about inflation and the state government in Georgia? Share your thoughts/tips by emailing [email protected].

Read State Affairs' coverage on inflation:

Can We Take the Gas Out of Inflation in Georgia?

Kemp Vows To Return Portion of Budget Surplus to Georgians