Tampa, Florida, is experiencing more severe inflation than other American cities.
On Friday, the Bureau of Labor Statistics announced that consumer price inflation in the United States has reached 6.8% — the largest year-over-year increase since June 1982, as well as the sixth straight month in which inflation remained above 5%.
The agency also examined inflation in nearly two dozen American cities. In its most recent report, Tampa outpaced other cities, including Philadelphia, Los Angeles, and Chicago.
According to a Fox 13 Tampa Bay interview with G. Hartley Mellish — an economist who has taught at the University of South Florida — there are several factors behind the particularly high price levels in Tampa, including an influx of new residents, low interest rates, and supply chain bottlenecks.
“People who want a car right away have to pay a premium,” he said. “We have a limited supply of housing, and we have 100 new people coming to the Tampa Bay Area every day.”
“There is a softening in the housing market, which is taking place right now, and hopefully it’ll continue,” Mellish continued. “And any kind of supply chain shortages in groceries that encourages producers to produce more, and so eventually it’ll work itself out.”
Other cities experiencing consumer price inflation higher than the nationwide 6.8% include Riverside, California; Dallas, Texas; and Minneapolis, Minnesota — which have 7.9%, 7.5%, and 6.9% inflation rates, respectively.
Surveys reveal that Americans are taking note of rising price levels. The Federal Reserve Bank of New York’s Survey of Consumer Expectations revealed that Americans foresee higher short-term inflation:
Median one-year-ahead inflation expectations increased to 6.0% from 5.7% in October. Median three-year ahead inflation expectations decreased to 4.0% from 4.2% in both September and October. This is the first decline in the three-year measure since June 2021, and only the second decline since October 2020.
The decline in medium-term expectations was driven by respondents without a college degree. Measures of disagreement across respondents (the difference between the 75th and 25th percentiles of inflation expectations) increased at both horizons to new series highs.
Median inflation uncertainty — or the uncertainty expressed regarding future inflation outcomes — increased at both the short- and medium-term horizons, with both reaching new series highs.
The survey also found Americans expect to earn less while spending more:
The median expected growth in household income fell by 0.1 percentage point from its series high in October, to 3.2%.
Median year-ahead household spending growth expectations jumped up by 0.3 percentage point to 5.7%, a new series high. The increase was largest for respondents with annual household incomes under $50,000.
Perceptions of credit access compared to a year ago deteriorated slightly in November, with fewer respondents finding it easier to obtain credit now than a year ago. Expectations about future credit availability deteriorated as well, with fewer respondents expecting it will be easier to obtain credit in the year ahead.
Wage growth following COVID-19 and the lockdown-induced recession has been eclipsed by higher price levels. Last week, the Bureau of Labor Statistics said that “real average hourly earnings” — a metric that considers the impact of inflation on purchasing power — fell by 0.4% between October and November. Though nominal average hourly earnings rose by 0.3%, the effects were overshadowed by a 0.8% increase in consumer prices.
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Source: Dailywire
