Soaring consumer inflation has reached heights not seen in the United States in decades, but the painful price increases haven’t been uniform across American cities.
When it comes to major metropolitan areas, Atlanta-Sandy Springs-Roswell saw the greatest inflation hike during 2021, 9.8% according to U.S. Bureau of Labor Statistics numbers, while San Francisco-Oakland-Hayward – home to some of the steepest real estate prices in the country – saw the lowest, 4.2%.
The Phoenix-Mesa-Scottsdale and St. Louis areas also saw some of the highest inflation rates in 2021, at 9.7 and 8.3%, respectively.
Inflation and tangled supply chains have seeped into nearly every nook of the economy, forcing consumers and businesses to make painful decisions that many of them have never had to contemplate before. With the government reporting Thursday that consumer inflation reached 7.5% over the past year — a 40-year high — the acceleration of prices is leaving few unscathed.
Here’s how other major metros stacked up last year, according to the labor department:
|Selected local areas||% Change from Dec. 2020 to Dec. 2021|
|Los Angeles-Long Beach-Anaheim||6.6|
|New York-Newark-Jersey City||4.4|
|Houston-The Woodlands-Sugar Land||6.6|
|Miami-Fort Lauderdale-West Palm Beach||7.1|
Some of the supply chain snarls that have magnified inflation since the pandemic recession may begin to ease in the coming months. If so, inflation would likely moderate somewhat.
Yet the key trends that have sent prices soaring — higher wages, parts shortages, rent increases, robust consumer spending — won’t likely fade anytime soon. And it’s unclear when, or how much, inflation might actually slow.
Increased pay, though good for workers, has led many other retail and restaurant chains, from Starbucks to Amazon to Chipotle, to charge customers more. When Amazon announced last week that it was raising the price of its annual Prime memberships, from $119 to $139, it pointed to its increased labor and shipping costs.
And an acceleration of apartments rents, many economists say, will likely help keep inflation up at least through the end of this year. Rising prices are also broadening from pandemic-battered industries like autos to wider categories of goods and services, from electricity to clothing to airfares. That suggests that high inflation will outlast COVID-19.
Neil Dutta, an economist at Renaissance Macro, noted that even if you exclude from the government’s consumer price index the costs of food, energy, housing and used cars — some of the fastest-rising categories during the pandemic — prices still rose a steep 0.7% from December to January. That’s above even the 0.6% increase for overall consumer prices, a stark illustration of how widespread price increases have become.
Many big corporations say that even after they’ve raised prices, their customers have kept right on buying. Rising wages and higher savings, boosted by heavy government stimulus aid last year, have likely helped keep consumer demand strong. Over time, though, high levels of spending and wages can fuel further price hikes in a continuing spiral.
If there is any hope for the dizzying inflation trend, experts point to a January increase in the number of Americans looking for work, which could slow wage growth.
“Labor supply is increasing quickly, and that will put downward pressure on wages and prices,” said Adam Ozimek, chief economist at Upwork, a freelancing website.
The number of people either working or looking for work in January is still below pre-pandemic levels, however.
The Associated Press contributed to this report.