(FixThisNation.com) – Americans nationwide are feeling the pinch of inflation in their everyday expenses, from food and accommodation to fuel, with prices persistently high.
Despite the national inflation rate standing at 3.7 percent in September, the economic impact varies significantly across different cities.
In a recent analysis by WalletHub, which assessed the inflation situation in 23 major metropolitan regions, Miami, Florida emerged as the city most burdened by inflation, whereas Baltimore proved the most resilient in the face of soaring prices.
The cities facing the steepest inflation included Miami, Florida; Tampa, Florida; Riverside, California; San Diego, California; and Atlanta, Georgia. Miami experienced the most pronounced increase in the consumer price index over the past year, rising by 7.8 percent, followed by Tampa at 6.7 percent.
Conversely, the cities that best weathered the inflation storm were Baltimore, Maryland; Phoenix, Arizona; St. Louis, Missouri; Chicago, Illinois; and San Francisco, California. Among these, Baltimore recorded a modest annual inflation of just 3.1 percent, with Phoenix and St. Louis both exhibiting similar trends.
Economists attribute these disparities in inflation experiences in part to the housing market. Particularly in Miami, housing prices have skyrocketed by 12.5 percent since August 2022, as stated by the Bureau of Labor Statistics.
Gus Faucher, the chief economist at PNC, highlighted to CNBC that “Housing makes up roughly 40 percent of the Consumer Price Index and is the primary factor causing price variations across metropolitan regions.” He added, “The pronounced escalation in house prices in Miami accounts for the higher inflation there, as opposed to other regions where the housing markets are more balanced.”
Northeastern University professor Barry Bluestone pointed out multiple drivers of the persistent inflation, including significant supply chain disruptions and a scarcity of energy resources, which have particularly pushed gasoline prices higher. He noted that beyond energy and transportation bottlenecks, “a critical shortage of housing in numerous areas has precipitated a surge in rents, further fueling inflation.”
Furthermore, government responses to the pandemic, such as stimulus checks, injected substantial liquidity into the economy, setting the stage for subsequent inflationary pressures.
University of Connecticut’s associate professor Steven Lanza observed, “Post-lockdown, consumers, bolstered by savings and stimulus funds, escalated their spending, while supply chains lagged in response, unable to match the surging demand. This classic scenario of ‘excess money pursuing limited goods’ led to skyrocketing prices.”
In response, the Federal Reserve has been proactive, repeatedly hiking interest rates to combat inflation, yet the national rate stubbornly persists at 3.7 percent.
Lanza noted, “Though supply chains are largely normalized and pandemic-related federal expenditure has wound down, moderating price increases, the Federal Reserve has significantly tightened monetary policy, contracting the money supply and upping crucial interest rates.”
Despite inflation peaking at nearly 9 percent in the previous summer and subsequently dropping by approximately five percentage points, the journey towards economic stability remains ongoing. Lanza concluded, “While many anticipated that the Fed’s tightening monetary stance could trigger a recession, that hasn’t occurred yet. However, given that monetary policy impacts are typically delayed and inconsistent, future economic outcomes remain uncertain.”
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