Feeling the pinch of inflation? Tennessee ranks among worst states

If you have been feeling a hit to your wallet due to inflation, you’re not alone.

Used cars, furniture and appliances have dropped in price as supply chain bottlenecks during the COVID pandemic have resolved but rent, car insurance and transportation costs continue to rise.

After easing substantially in 2023, U.S. inflation has remained stubbornly elevated this year, creeping more slowly toward the Federal Reserve’s 2% goal.

There are notable differences among the states since pandemic-related product and labor shortages sparked a runup in consumer prices beginning in 2021. While Florida leads the country with the nation’s highest inflation at about 4%, Tennessee is not far behind at 3.8%, according to an analysis of index data by Moody’s Analytics.

Tennessee has second-highest inflation rate in U.S.

As home prices soared in larger metro areas, many Americans sought refuge in Tennessee for its more affordable housing, big-city amenities in Nashville, diverse economy and robust job opportunities, said Moody’s regional economist Adam Kamins. The trend accelerated during the pandemic, Kamins added.

Last year, Tennessee added 63,000 more residents than it lost, pushing up the cost of housing and other services. Its 3.3% unemployment rate, below the nation’s 3.8%, has increased wages and the cost of services.

But while housing prices have climbed higher, they didn’t vault as sharply as they did in the Mountain West, Kamins said. Many Americans who moved to the state’s rural areas during the pandemic have stayed and are working remotely, even as the health crisis has eased.

What states have the highest inflation?

Generally, inflation has been higher in the South and West because Americans have flocked to those regions for favorable climates and lower costs, pushing up consumer demand and prices, especially for housing.

According to a Consumer Price Index report from Moody’s, the states with the highest 12-month inflation rates are: h Florida: 3.9% h Tennessee: 3.8% h Virginia: 3.8% h South Carolina: 3.6% h Alabama: 3.6%

Liz Kellar is a Tennessee Connect reporter. Email liz.kellar@knoxnews.com.