3 So. California cities among hardest hit by inflation

Inflation has been weighing on US households for two years, and everyone is feeling it to some degree. But some cities have been hit harder than others, according to a recent analysis by WalletHub.

WalletHub compared changes in the Consumer Price Index, a Bureau of Labor Statistics statistic that measures the cost of a mix of goods like groceries, gas and services, across 23 metropolitan areas.

The analysis found things were worse in Anchorage, Alaska — and by a lot. Over the past year, the CPI has jumped more than 12%, WalletHub found.

No region seems to be spared by the ranking. Cities in the West, South, Midwest and East Coast were all in the top 10. (See the full ranking below.)

You might think inflation is hitting expensive states the hardest, but that’s not the case, according to think tank Economic Innovation Group. Prices in lower-cost states rose the most, the group found. For example, Hawaii – where the cost of living has long been high – appears to have one of the smallest impacts on inflation.

“Many of today’s inflation hotspots were actually becoming more affordable relative to the country until the Covid-19 pandemic hit. This model could give those living in those states a sense of boost,” said the Economic Innovation Group.

What explains the difference? Many historically cheap states “are home to industries disproportionately affected by price increases, such as manufacturing,” the group explains. “Some are rural, where gasoline and other staples feature prominently in the household and business spending basket. Some states have also seen rapid population growth drive up housing costs, particularly in the Mountain West region.

High-cost states like Hawaii, California, and New York have economies that are more reliant on the service sector, have taken longer to recover from COVID-related economic shutdowns, and haven’t seen the boom return to business (and the resulting inflation) as a result.

See below for more on how the 23 cities compare when it comes to inflation:

subway station Score CPI change (last 2 months) Change in CPI (last year)
1 Anchorage, Alaska 100.00 7.10% 12.40%
2 Phoenix-Mesa-Scottsdale, Arizona 68.38 3.10% 12.30%
3 Atlanta-Sandy Springs-Roswell, Georgia 56.22 2.40% 11.50%
4 Seattle-Tacoma-Bellevue, Washington 50.51 3.20% 10.10%
5 Baltimore-Columbia-Towson, Maryland 50.13 2.60% 10.60%
6 Miami-Fort Lauderdale-West Palm Beach, Florida 49.36 2.50% 10.60%
seven Houston-The Woodlands-Sugar Land, Texas 48.28 2.80% 10.20%
8 Detroit-Warren-Dearborn, Michigan 45.58 3.00% 9.70%
9 Tampa-St. Petersburg-Clearwater, Florida 45.22 1.30% 11.20%
ten Philadelphia-Camden-Wilmington, Penn-NJ-Del.-Md. 32.57 2.30% 8.80%
11 St. Louis, Missouri 29.95 2.40% 8.40%
12 Dallas-Fort Worth-Arlington, TX 27.65 1.00% 9.40%
13 Riverside-San Bernardino-Ontario, California 26.73 1.10% 9.20%
14 Chicago-Naperville-Elgin, Illinois-Ind.-Wis. 26.42 1.50% 8.80%
15 Denver-Aurora-Lakewood, Colorado 22.87 1.70% 8.20%
16 Minneapolis-St. Paul-Bloomington, Minnesota 19.02 1.20% 8.20%
17 Los Angeles-Long Beach-Anaheim, CA 12:48 0.90% 7.70%
18 Washington-Arlington-Alexandria, DC-Va.-Md.-WV 12:32 p.m. 1.10% 7.50%
19 San Diego-Carlsbad, California 11:40 a.m. 1.20% 7.30%
20 San Francisco-Oakland-Hayward, California 11.00 1.70% 6.80%
21 Boston-Cambridge-Newton, Mass.-NH 5.01 0.70% 7.00%
22 New York-Newark-Jersey City, NY-NJ-Pa. 3.85 1.10% 6.50%
23 Urban Honolulu, Hawaii 2.54 0.60% 6.80%

There are early signs this week that inflation may finally be slowing down. A report from the Labor Department on Thursday showed that the producer price index – which measures inflation before it reaches consumers – fell 0.5% in July. It was the first monthly decline since April 2020 and was down from a strong 1% increase from May to June.

The easing of wholesale inflation suggests that consumers may get some relief from relentless inflation in the months ahead. The wholesale report follows government data on Wednesday which showed consumer inflation was unchanged from June to July – the first flat figure after 25 consecutive months of increases.

Still, economists warn that it’s still too early to say that inflation is steadily heading down.

“July’s deceleration … is a step in the right direction,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “But production costs continue to rise at a rapid rate, well above target.”

The Associated Press contributed to this report.

Bernard P. Love