Inflation took a breather along the Wasatch Front in November as the cost of living ended a nine-month upward cycle with a slight decline of 0.04 percent - the first drop in local prices since January.
Nationally, prices rose 0.1 percent in November (nonseasonally adjusted), according to figures released Wednesday by the U.S. Bureau of Labor.In its monthly Cost of Living report, First Security Bank said local increases in the costs of groceries, housing and health care were offset in November by lower prices for clothing, transportation and eating out. Utility bills were unchanged for the month.
Since the bank began tracking costs in March 1988, overall costs have risen 25.6 percent locally, compared with a 28.5 percent increase nationally.
In October, it had appeared that local inflation had surpassed the national figure during that six-year period, but First Security chief economist Kelly K. Matthews said Wednesday that a recalculation of the 1988-89 data showed a computer error had skewed local costs in those years. The cumulative data have been adjusted to show local inflation 2.9 percent below the national number since 1988.
Matthews said the data still indicate local inflation running at least 1 percent ahead of the national rate this year.
Does November's drop in costs mean the Federal Reserve's relentless interest rate hikes are having their desired effect in Utah? Possibly. Matthews said he is beginning to think the Fed is not just trying to keep inflation low but virtually flat.
"It seems that they may be hoping to contain it through the whole cycle," said Matthews. Still, he does not believe the Fed will raise interest rates again this year following its next meeting on Tuesday.
Matthews said his forecast calls for the Fed to again hike interest rates following its two-day meeting Jan. 31-Feb. 1. How much? "I think they will go back to 50 basis points (one-half of one percent) rather than the 75 points last time."
Here are how the various spending categories fared locally in November:
GROCERIES - Costs rose 2.0 percent across the board, led by a 9 percent jump in produce prices. Apples were up 19.4 percent, potatoes rose 9.5 percent and onions increased 33.3 percent. Lettuce prices dropped 42.3 percent and oranges were down 22.8 percent.
Meat prices increased 1.8 percent locally, but bread prices were down 8.0 percent. Crackers were up 51 percent while paper products increased 28.9 percent. Since March, 1988, local grocery costs have increased 30.2 percent overall.
HOUSING - Local costs rose for the fourth consecutive month in November, up 0.2 percent. Since 1988, housing costs have increased 56.7 percent along the Wasatch Front, by far the highest increase of any spending category.
HEALTH CARE - Costs rose 0.04 percent in November, continuing a four-month upward trend. Although prices of non-prescription medicines and dental care were lower, they were offset by higher fees for a doctor's care. Health care costs have risen 31.1 percent locally since 1988.
CLOTHING - Prices declined 2.4 percent in November after two months of increases. Lower price tags were reported across the board for men's, women's and children's wear. Local costs have inflated 9.7 percent over the past six years.
TRANSPORTATION - Following eight months of higher costs, the trend was broken last month as costs declined 0.9 percent. Lower gasoline prices were cited. Local transportation costs have risen 22.1 percent since 1988.
RESTAURANT FOOD - The cost of eating out fell 0.3 percent in November, the second consecutive month of lower prices. Wasatch Front restaurant costs have gone up 32.5 percent since 1988.
UTILITIES - Residential utility bills remained stable in November after rising in October. Since 1988, local costs have decreased 11.5 percent, the only spending category to decline.
MISCELLANEOUS - Costs were down 0.3 percent for the month as higher costs for professional/educational expenses were offset by lower prices for entertainment and personal care items.