Metro Phoenix has lowest inflation rate in latest national report

PHOENIX – The metro Phoenix inflation rate, which surged to stratospheric levels two years ago, is now the envy of the country.

The Valley’s year-over-year inflation was down to 1.6 percent for October, putting the local rate a full percentage point below the national mark of 2.6 percent, according to data released Wednesday by the U.S. Bureau of Labor Statistics (BLS).

Phoenix had the smallest annual increase of the 14 metro regions covered in the new consumer price index report. In fact, the index shows that prices actually decreased in metro Phoenix by 0.1 percent over the last two months.

The last time the Valley’s year-over-year inflation was under 2 percent was February 2021, when the rate was 1 percent.

“This is all really good news for the Phoenix area. … A lot of it had to do with housing prices and the sharp increase that we saw, basically, starting in 2020 through 2022. That’s when we saw peak housing prices, which have since retreated somewhat,” Danny Court, a Valley economist with Elliott D. Pollack & Company, told KTAR News 92.3 FM.

How high was Phoenix inflation in 2022?

The annual metro Phoenix inflation rate for housing in August 2022 was 17.1 percent, pushing the region’s overall rate to a whopping 13%, the highest in the U.S. at the time.

However, Valley housing inflation was down to 2.7 percent annually last month. In fact, prices in the sector declined by 0.4 percent from August to October.

Court said consumers shouldn’t expect prices to drop back to where they were before the COVID-19 pandemic fueled a worldwide inflation crisis.

“Overall, we’re just saying this is a new reset,” he said. “We’re hoping that inflation stays under control going forward and we’re hoping that wages can catch up with what’s occurred in where we have to spend our money.”

KTAR News 92.3 FM’s Jim Cross contributed to this report.

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