The Zions Bank Wasatch Front Consumer Price Index (CPI) slipped 0.3 percent from November to December on a non-seasonally adjusted basis, matching the national Consumer Price Index month-to-month decrease.
Once again, lower gasoline prices have helped nudge local consumer costs down.
The Zions Bank Wasatch Front Consumer Price Index (CPI) slipped 0.3 percent from November to December on a non-seasonally adjusted basis, matching the national Consumer Price Index month-to-month decrease.
Compared to a year earlier, the local December index was up 1.8 percent, near the Federal Reserve’s national inflation target of 2 percent, while the nation CPI has risen 0.7 percent year-over-year.
A 2.7 percent decrease in Wasatch Front transportation prices was attributed to flight and vehicle rental rates falling. The primary driver was lower gasoline prices, which continued their steady, months-long decline.
Brent Crude Oil, the international benchmark for oil prices, fluctuated slightly throughout December but continued its downward trend. Current futures register at about $28 per barrel compared to $59 per barrel a year ago. Gasoline prices in Utah are still higher than the national average of $1.87 per gallon — in part because of a gasoline tax of about 5 cents per gallon that began Jan. 1 that is expected to generate about $76 million for the state annually. Gasoline prices in Utah currently average $2 per gallon.
“The sustained decline in oil prices has continued to challenge many of the world’s largest economies,” said Scott Anderson, Zions Bank president and chief executive officer. “But the savings this trend has passed on to individual consumers in Utah can be expected to pay dividends through 2016 here at home in Utah, as local businesses and the state’s economy profits from increased spending on local goods.”
In addition to transportation costs, categories seeing prices fall from November to December included housing, down 0.2 percent due to decreases in prices of bedding and other furnishings. Housing prices have a large impact on the average Utahn’s expenditures, magnifying the effect of even modest price fluctuations, making the November-to-December slight decline broadly impactful across the state’s economy.
The prices of other goods and services also fell 1.0 percent in December. However, because this category comprises only 3.1 percent of the average Utahn’s expenditures, it made a minor contribution to the overall decrease in the CPI relative to the impact of transportation prices.
Among categories with price increases was clothing, which was up 3.2 percent, a greater increase than all other sectors as retailers sought to take advantage of the busy holiday shopping season. However, clothing expenses account for only 4.8 percent of the average Utahn’s income. As a result, significant fluctuations in these prices have a relatively small impact on the overall CPI.
Other categories with increases were food at home, 1.4 percent — a significant increase that may be mitigated if El Niño rains resolve the water scarcity that has hindered food production — and recreation, 0.3 percent. With food at home and recreation prices comprising 8.4 and 6.0 percent of the average Utahn’s total expenditures, respectively, movement in those categories collectively had a moderate impact on the overall CPI.