For the first time since spring, consumers prices took a minor dip in August. The Zions Bank Wasatch Front Consumer Price Index (CPI) decreased 0.1 percent from July to August. The index has grown 5.2 percent in the past year, while the National Consumer Price index has increased 2.7 percent in the same time frame.
Shrinking prices within the transportation and food-away-from-home sectors are causing essentially all of the first decrease in overall cost of living since March of this year. Although transportation prices overall decreased, prices of gasoline still inched up from the previous month. Airfare and car rental prices, which often feel a lagging effect from gas and oil prices, dropped after the temporary price decrease for gasoline in July.
The steady and overall increase in housing and transportation prices continues. Year-over-year housing prices have increased since November 2014 and are a sign of Utah’s strong economy. Year-over-year transportation price changes have been positive since April 2017. Combined, housing and transportation increases make up about 80 percent of the total year-over-year price increase.
“Some may be wondering about why prices are changing more rapidly in Utah than in other parts of the country,” said Scott Anderson, president and CEO of Zions Bank. “Although the full answer is complex, much of it comes down to the fact that Utah’s economy is growing rapidly due to a strong business climate which attracts workforce growth. As more people come, they buy more goods and services, and with Utah’s high population growth, housing is one of the most rapidly growing sectors around. Utah has more population growth and economic prosperity than many other states, so buying increases and prices follow suit.”
“In this time of such rapid price growth, it is worth noting some of the context and reason the housing and transportation sectors are getting so much attention,” said Randy Shumway, chairman of the Cicero Group, a Salt Lake City market research firm that does data collection and analysis for the CPI. “The recent price increases now mean the average Utahn spends about 56 percent of their income on housing and transportation combined, which is a high for Utah. This can place strain, particularly on lower-income Utahns. For that reason, we are happy to see homebuilders pushing to alleviate some of the supply issues we currently see in the market.”