Slight increases in several categories — with transportation leading the way — nudged the Zions Bank Wasatch Front Consumer Price Index (CPI) up 0.2 percent from December to January.
Slight increases in several categories — with transportation leading the way — nudged the Zions Bank Wasatch Front Consumer Price Index (CPI) up 0.2 percent from December to January.
The index has risen 3 percent from a year ago, slightly higher than the Federal Reserve’s national inflation target of 2 percent. The national Consumer Price Index likewise rose 0.2 percent from December to January and is up 1.4 percent during the past year.
Transportation prices contributed most to the local month-to-month price increase, up 1.8 percent as vehicle prices, insurance rates and rates for airfare increased. Prices for flights more than offset falling fuel prices, as airfares typically lag falling oil prices.
Brent Crude Oil, the international benchmark for oil prices, fell at the beginning of the month, with U.S. crude inventories rising to their highest level in nearly eight decades. However, crude prices reversed their downward trend near the end of the month, suggesting a possible price bottom.
Current futures register at about $33 per barrel compared to $67 per barrel a year ago. Gasoline prices in Utah are still higher than the national average of $1.72 per gallon and currently average $1.76 per gallon.
“The sustained drop in oil prices has been distressing to some industries,” said Scott Anderson, Zions Bank’s president and chief executive officer. “But while we may see some further market volatility in the coming months, recent increases in prices among several major consumer product categories — including oil itself — give us reason to be optimistic.”
Recreation prices also were a contributor to the local index increase, up 0.6 percent from December to January. The increase came as prices for pets and pet products increased. However, with recreation accounting for only 6 percent of the average Utahn’s expenditures, the increases had a minor impact on the Wasatch Front CPI.
Other categories registering December-to-January increases were utilities, 0.2 percent; clothing, 0.1 percent; education and communication, 0.2 percent; and other goods and services, 0.3 percent. Although each of those categories experienced only minor price increases, the four categories combined make up nearly 20 percent of an average Utahn’s expenses. As such, these categories contributed to the increased CPI and tempered price decreases in other categories.
The largest month-to-month decrease was in medical care prices, down 1.8 percent, as lower prices were observed in hospitals and at other service providers. Housing prices declined 0.1 percent in January due to decreases in rates for hotels and motels, likely coming as the holiday season and the Sundance Film Festival concluded. Housing prices have a large impact on the average Utahn’s expenditures, making even a minor price decline significantly impactful on the overall CPI.
Prices for food away from home dropped 0.5 percent as fast food restaurants and alcoholic beverage prices decreased. Prices for food at home remained unchanged through the month of January as price increases for produce, bell peppers, tomatoes and beef offset declines in prices for poultry, pork and seafood.
Analysis and data collection for the Zions Bank CPI and the Zions Bank Consumer Attitude Index are provided by the Cicero Group, a Salt Lake City-based market research firm.