Phoenix inflation at lowest level in 18 months, but still outpacing US rate

Jun 13, 2023, 11:00 AM | Updated: 1:25 pm

PHOENIX – The annual inflation rate in metro Phoenix slowed to its lowest level in 18 months, but local inflation remains far ahead of the national rate, according to a federal report released Tuesday.

Valley consumer prices increased by 7.4% from April 2022 to April 2023, the smallest annual rise since a 7.1% rate in October 2021, according to U.S. Bureau of Labor Statistics data.

The national annual inflation rate, meanwhile, was 4% for May, the lowest 12-month figure in over two years.

“We’re finally seeing some relief on the inflation front,” Jim Rounds of Tempe-based Rounds Consulting Group told KTAR News 92.3 FM.

“Consumer prices — the prices that we pay as consumers when we go out and we purchase things — are only growing at about 4% now. That’s about half of what people were predicting.”

Nationally, the pullback was driven by tumbling gas prices and smaller increases in grocery prices and other items.

In the Valley, annual housing inflation remained high at 12.2%. Food was a mixed bag locally, with an overall annual increase of 6.8%. The category of meats, poultry, fish and eggs fell by 4.8%, but cereals and bakery products were up 14.6%.

Metro Phoenix gas prices rose by a moderate 3.6% annually in April, but that included a 33.1% spike from February to April.

“We’re still going to have higher-than-average inflation for a little longer, probably through the next recession,” Rounds said.

The Federal Reserve has raised its benchmark rate by 5 percentage points over the past 15 months — the fastest pace of rate increases in four decades. The goal is to slow borrowing and spending, cool the economy and tame inflation — without causing a deep recession.

Economists are projecting a recession late this year or in 2024.

“Regardless, it’s probably right around the corner. But on the inflation side, that’s very good news,” Rounds said of Tuesday’s data.

“Expect additional action by the Federal Reserve board, though, pulling that extra money out of the economy if the jobs reports still come in strong.”

The Associated Press contributed to this report.

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Phoenix inflation at lowest level in 18 months, but still outpacing US rate