How much have prices increased over the past year? It depends on where you live.
How much have prices increased over the past year? It depends on where you live.
It’s fair to say that at some point in the past year, every one of us has walked into a grocery store, tried to rent an apartment or bought any number of things, and experienced sticker shock.
It turns out that how high those prices are can be a function of where in the country you are, according to data from the Bureau of Labor Statistics. In other words, the stickers have been more shocking in some regions of the country than in others.
Unless you’ve been living under a rock for the past couple years, you know that during the pandemic, housing prices exploded. “It was like a market on steroids,” said Aleksandra Marzec, a real estate broker in Miami.
The tight housing market has also put pressure on rents, she said. A one-bedroom in her neighborhood used to go for somewhere between $1,800 and $2,500.
“Now, you won’t find anything for less than $3,500,” Marzec said.
Housing is a big factor in measuring inflation; it accounts for a third of the Consumer Price Index. So it’s no coincidence that Miami — which has seen a big influx of people and some of the country’s biggest increases in cost of shelter — has a higher rate of inflation. While prices are up 6.5% nationally, they’re up almost 10% in Miami. Meanwhile in San Francisco, where population declined during the pandemic, inflation is less than 5%.
“Inflation is a measure of an economy running hot, and the economy is running much hotter in certain parts of the country than others,” said Kenan Fikri, research director at the Economic Innovation Group.
Migration patterns affect the cost of everything, because businesses pay higher rents. Plus, a suddenly larger population creates more demand, which puts pressure on supply. This affects the cost of some purchases more than others, per Justin Wolfers, an economist at the University of Michigan.
“Stuff that can sell across state lines usually sells for very similar prices,” he said.
That includes goods like food, clothing and electronics. On the other hand, “stuff that can’t — inflation can go in different directions,” Wolfers said.
That would include services. And that’s exactly where Aleksandra Marzec in Miami is seeing the biggest jumps in prices. At work, marketing and photography costs have gone way up. And in her personal life?
“My trainer’s like, ‘Oh there’s a big inflation recession, I’m raising my personal training classes,'” Marzec said, adding that she went from paying $60 an hour to $100.
Additional reporting by Trina Mannino.
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