Denver inflation is the worst in the US. These cities are right behind them
People around the country are feeling the effects of higher consumer prices. Some places are more affected than others by inflation, though, according to a recent report by WalletHub.
According to WalletHub, Colorado’s Denver-Aurora-Lakewood metropolitan area has the biggest inflation problem in the U.S. The latest month-to-month Consumer Price Index (CPI) change there was 1%, and it went up by 3.10% compared to last year, the financial website found.
To rank these cities, WalletHub analyzed 23 Metropolitan Statistical Areas across two metrics related to the CPI. It looked at the CPI for the latest month the Bureau of Labor Statistics had available, and as well as last year “to get a snapshot of how inflation has changed in the short and long term.”
Which metropolitan areas are being hit the hardest?
Coming in second and third place in WalletHub’s list is Los Angeles-Long Beach-Anaheim in California, which had a month-to-month CPI change of .7% and an increase from last year of 3.5%, and Chicago-Naperville-Elgin in Illinois, which saw a month over month increase of .9% and year over year of 2.9%.
Then it’s the Boston-Cambridge-Newton metropolitan area in Massachusetts and New Hampshire month over Month: (0.7% change month over month, and a 3.3% increase from last year); Minneapolis-St.Paul-Bloomington in Minnesota (0.8% change month over month, 2.6% from last year); and Washington D.C.-Arlington-Alexandria in Virginia and Maryland (0.8% month over month, with a 2.5% increase from last year).
After that is Philadelphia-Camden-Wilmington in Pennsylvania, New Jersey, Delaware and Maryland (with a month over month change of .5% and an increase from last year of 3.3%); Anchorage, Alaska, (which had a month over month change of 0.8% and an increase from last year of 2.4%); New York City, Newark and Jersey City in New York and New Jersey (with a month over month change of .5% and an increase from last year of 3%) and San Diego-Carlsbad in California (with a .1% change month over month, and a 3.9% increase from last year).
Federal Reserve cuts rates
With the government shutdown that started Oct. 1, the Federal Reserve had less data to work with, but still went ahead with another interest rate cut on Wednesday. It’s the second quarter-point cut announced by Federal Reserve Chair Jerome Powell in two months. In September, the Fed also cut its interest rate by a quarter point, which made the overnight lending rate go from 3.75%-4%.
While government officials did not release its monthly jobs report in October, private labor market data continues to show slowing gains. A delayed monthly inflation report that was released in late October showed annual prices rose by 3%. Besides this data, which BLS compiled for Social Security cost-of-living adjustments, the government has stopped all data releases until the shutdown ends.
Yongqing Wang, a senior lecturer of Economics in the Eller College of Management at The University of Arizona, said inflation is driven by multiple factors, so a successful policy response has to be nuanced and multifaceted.
“Contractionary monetary and fiscal measures usually are essential tools for restraining aggregate demand, but their use comes at a cost: slower economic growth and greater risk to employment,” she said in a statement for WalletHub. “For this reason, reliance on demand-side contractionary policies should be applied with restraint rather than as the default response.”
What the Federal Reserve and fiscal authorities need to do is “pursue a delicate balance, safeguarding hard-won progress on inflation while preventing unnecessary damage to employment and growth,” she added.
“Although the Fed has already initiated rate cuts, such moves while supportive of growth carry the risk of rekindling inflationary pressures. Accordingly, any further adjustments should be made gradually, guided by market reactions and reinforced with clear forward guidance, in order to prevent inflation driven by expectations, or worse, stagflation, the coexistence of inflation and recession,” Wang said.
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Ella Rae Greene, Editor In Chief
