Phoenix-area inflation continues to cool but remains among worst in nation

Jan 12, 2023, 4:00 PM

(File Photo by Spencer Platt/Getty Images)...

(File Photo by Spencer Platt/Getty Images)

(File Photo by Spencer Platt/Getty Images)

PHOENIX — Consumer prices in metro Phoenix fell slightly over the last two months of 2022 as inflation continued to cool, according to data released Thursday.

“We’re on the right path, it’s just so slow,” Danny Court, senior economist with Scottsdale-based Elliot D. Pollack & Company, told KTAR News 92.3 FM’s Arizona’s Morning News.

Falling gas prices played a large role in the .7% decline from October to December, according to the U.S. Bureau of Labor Statistics. The cost of motor fuel dropped by 22.9% during that span.

However, with many consumer categories still seeing double-digit inflation, Valley prices overall were 9.5% higher in December than a year ago.

On the bright side, the December annual inflation figure for the Phoenix area was the lowest since October 2021, when it was 7.1%.

“Inflation is still here,” Court said. “It’s going to be sticky because of the hot jobs market.

“When inflation gets into wages, it tends to stick around quite a while, and we still have a really hot jobs market, so it’s going to be here for a while.”

Of the metro areas covered in Thursday’s report, only Miami, at 9.9%, experienced worse inflation than Phoenix in 2022. Nationally, year-over-year inflation was 6.5% in December, down from 7.1% in November.

The Bureau of Labor Statistics releases consumer price data for Greater Phoenix every two months. The local annual inflation rate was a nation-leading 12.1% in the October report.

Valley housing was 15.4% more expensive in December than a year earlier, helping keeping overall inflation relatively high.

“When you look at it as far as why is it so much higher than than the U.S. average, it all has to do with housing costs,” Court said.

“We’re experiencing the same kind of food increases, energy increases, the cost of services similar to the United States.”

Court said that as local housing prices return to earth, he expects Phoenix to be less of an inflation outlier in 2023.

“When those start to come down, and we’re seeing it already, we’ll start to see us more in line with what the U.S. is experiencing,” he said. “I expect us to basically come back and conform to U.S. inflation.”

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Phoenix-area inflation continues to cool but remains among worst in nation