Utah consumer prices drop slightly
The Zions Bank Wasatch Front Consumer Price Index may have decreased slightly from October to November due to falling gasoline prices, but some key sectors including utility prices, food costs and increased airfare prices may be offsetting some of the advantages.
The report showed consumer prices in Utah dropped .1 percent on a non-seasonally adjusted basis, compared to the national Consumer Price Index released Tuesday that fell .2 percent during the same period.
On the year, prices have increased 1.3 percent in Utah and 1.2 percent nationally.
"Falling gasoline prices will give Utahns some much-needed discretionary income, especially in the midst of the holiday spending season," said Scott Anderson, Zions Bank president and CEO. "An unexpected bump in spending during this critical season for retailers could be exactly what we need to propel our economic recovery to new heights and end the year on an extremely positive note."
AAA Utah reported that the average price for a gallon of gasoline in Utah was at $3.08 compared to $3.26 for the national average. There are places in the Salt Lake Valley where prices have dropped in recent days to as low as $2.93 per gallon.
If history is a gauge, those prices could go lower. Gas prices typically reach their lowest level at the end of January and then begin to rise, usually hitting highs in June during the busy summer driving season.
The report showed that rental car and airfare price jumped last month, a fact economists and studies show likely will push more Utahns into driving rather than flying to a holiday destination this year.
According to TripAdvisor's annual holiday travel survey, 52 percent of holiday travelers are planning to drive this year, up five percentage points from 48 percent last year. That report said the national average for airfare has increased from $401 in 2012 to $436 in 2013.
Of particular concern to many Utahns were the rise of utility prices by 2.2 percent from October to November. Electricity prices were up 2 percent and natural gas prices were up 7.6 percent.
The Zions' report said this is quite typical in November, when many utility companies switch residents from summer to winter rates. Demand for natural gas is lowest in spring and fall months, but utility companies typically charge a less expensive summer rate from April to October and a more expensive winter rate from November to March.
Those prices may be higher than years past this year.
The U.S. Energy Information Association is predicting that more than 90 percent of the 116 million households in the United States will pay more for heat this year due to rising natural gas, electricity and propane prices. The group said households using natural gas for heat will pay about $80 more this winter than last year.
Another concern for Utah consumers was that the price of food purchased for use at home rose .9 percent in November after falling the past two months. Restaurant food increased 1.1 percent, largely driven by increase in prices of full-service meals ahead of the holiday season.
Looking at other parts of the report, recreation prices increased .5 percent, largely due to rising cable television and video service prices. Prices for education and communication services increased .4 percent, largely due to the cost of personal telephones.
On the brighter side, clothing prices fell .2 percent after increasing the prior two months, housing prices were down .1 percent and prices for medical care fell .1 percent.
The Cicero Group collects and analyzes the data used in the report.
See more about comments here.