Despite a minor drop in Utah consumer prices in September, residents are experiencing price hikes over the past year at twice the rate recorded nationwide.
The Zions Bank Wasatch Front Consumer Price Index (CPI) decreased 0.1 percent from August to September on a non-seasonally adjusted basis. Year-over-year, the CPI has grown 4.8 percent, while the national Consumer Price index has increased just 2.3 percent since September of last year.
Decreasing prices in the transportation and housing sectors drove the monthly decline in the overall cost of living statewide. This is the first time since October of last year that both transportation and housing prices fell in the same month. Eases in car insurance and hotel rates caused the drop in transportation prices while dips in hotel and motel prices caused prices in the housing sector to edge downward.
“The overall upward trend in housing prices continues,” said Scott Anderson, president and CEO of Zions Bank. “We keep watching housing prices because they now make up about 38 percent of the average Utahn’s expenses, and we anticipate they continue rising.”
The September number marks the end of a four-month streak of the year-over-year CPI growth exceeding 5 percent. The 4.8 percent annual growth in September remains one of the highest annual rates measured since 2010. It is also a full percentage point higher than the highest measured national year-over-year CPI growth since 2011.
Increases to housing prices made up about half of the year-over-year increase in the Wasatch Front CPI, followed by transportation, making up about 30 percent of the increase, and medical care, making up about 10 percent of the increase. Although prices for food at home and recreation did drop since September 2017, their combined dip only tempered the increase slightly.
“The price increases we see here in Utah are due to the combination of rapid population growth, low unemployment, strong job growth and growing wages,” said Randy Shumway, chairman and partner of Cicero Group, a Salt Lake City-based market research firm that does data collection and analysis for the CPI. “Because more Utahns have more to spend on everything from housing to restaurants, prices are able to keep increasing with demand. The good news is price growth with corresponding wage and employment growth is sustainable, healthy growth.”