How does inflation in Utah compare with other states?
It’s a surprisingly tricky question to answer, despite all of the attention to inflation in recent years. Most authoritatively, inflation is tracked by the U.S. Bureau of Labor Statistics’ Consumer Price Index, or CPI. That’s defined as “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services” — or, in other words, a measure of how much the stuff people usually buy costs.
They release new numbers on inflation each month. On Wednesday, they announced zero national inflation for the month of July, but a sum increase of prices of 8.5% year over year for the nation. They also release numbers for individual regions. For example, the Mountain West region saw inflation of 0.4% from June to July, or 9.6% year over year — the highest in the country.
But the Bureau of Labor Statistics folks don’t release state-by-state numbers. That Mountain region pools together all of Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming. You, and everyone else, know that those states have pretty different economies.
Some further searching led to the Congress Joint Economic Committee’s “State Inflation Tracker,” which has a pretty state-by-state map of inflation costs. But further sleuthing indicates two things: First, the data is maintained only by the Republican wing of the committee, led by Utah senator Mike Lee. (As you’d expect, while the Republicans seek to make inflation a talking point through the “tracker” and their website, the Democrats’ page runs their own talking points.)
Second, the State’s Inflation Tracker’s methodology is simple to the point of being useless: they just take the regional inflation numbers reported by the Bureau of Labor Statistics and multiply them by average household spending in each state. Boo. They get a solid 2 out of 10 for usefulness there.
Zions Bank used to publish the “Wasatch Front CPI” monthly, keeping track of the cost of things locally, but their last publish date was September 2019 — frankly, an inopportune time to get out of the price tracking game.
In other words, we have to get a little creative to answer our question.
Enter the Cost of Living Index.
The Council for Community and Economic Research (C2ER) puts together a Cost Of Living Index, which compares the cost of living in one city vs. another for at least the top 250 markets in the United States, plus various other cities that choose to participate. In general, local chambers of commerce participate in the C2ER survey on a quarterly basis, reporting how much various things cost in their area — their last report compared the cost of a steak, a six-pack of beer, the average dentist visit, corn flakes, tennis balls, gasoline, and 50 other random goods and services.
Then, the C2ER puts it all together into one index, that they release quarterly. Each quarter, they set the average for the United States as a whole at 100.
To get to state-level data, the Missouri Economic and Research Center averages each of the participating cities in each state, then publishes it in their Cost of Living Data Series. It’s not perfect, because the average doesn’t seem to be weighted by city size... but we’ll take it. Why? Well, it’s because of this that the data is public at all: C2ER charges for access to their data, but the Missouri folks put these summarized versions online. We can look at their site to get quarterly state-by-state data back to the second quarter of 2019.
So here’s the idea for comparing state inflation: We’ll look at cost of living in each state in 2019, then look at cost of living in each state in 2022, and see which of the states have moved up relative to one another — even in the roughly 15% overall national inflationary environment that has occurred in that time period. Sound good?
This was the state of cost of living affairs in 2019 (averaged across all four quarters):
You probably could have guessed the most and least expensive states in the list: Hawaii, D.C., and California were most spendy; Mississippi, Oklahoma and Arkansas were cheapest.
In 2019, you can see, Utah’s cost of living generally was lower than the national average. In particular, housing, utilities, and healthcare were significantly cheaper here than in the U.S. generally. Meanwhile, grocery costs, transportation costs, and miscellaneous goods and services were at or just barely above national averages. All in all, Utah ranked as the 24th cheapest state to live in.
Let’s fast forward to the first quarter of 2022. Kind of a lot happened in those two years and change, you might remember.
Whoa, all of a sudden, Utah’s the 34th-cheapest state — higher than the national average! What’s going on?
Well, grocery prices, utilities, transportation costs have all gone up about a point. Miscellaneous goods and services have increased by a few index points. Healthcare costs, while going up in total, actually shrunk when compared to the rising national average — though I hope our local healthcare providers don’t see this and get the idea to raise prices more.
But housing prices exploded. Utah went from a 92 in the housing cost index to 110. In the space of just over two years, Utah went from a cheap place to own or rent housing to an expensive one, relative to the national average.
By the way, yes, housing prices are included in inflation calculations. The Bureau of Labor Statistics includes them as comprising about a third of the total Consumer Price Index; in the Cost of Living Index, housing counts as just over 28%. Both home sale prices and average apartment rents are considered in the calculations for both indexes.
Let’s see now: which states saw the biggest increases in the Cost of Living Index?
Utah saw the fourth-highest increase in the Cost of Living Index, along with New York, New Hampshire and Arizona. Fellow Mountain West region states Idaho and New Mexico also saw big jumps in cost of living, though Wyoming and Nevada saw significant decreases — again, relative to the national environment of inflation.
Also, Utah joined Arizona and Florida as the only states to jump from below-average cost of living to above-average between 2019 and the first quarter of 2022.
Note that what we can’t do here is add the two numbers. We can’t say “Well, there was 15% inflation nationally between 2019 and 2022, and then Utah’s status in the Cost of Living Index rose by 7%, so there was 22% inflation in Utah.” Because the Bureau of Labor Statistics Consumer Price Index and the Cost of Living Index are two different indexes, pegged to two different things, we can’t do that.
But we can say this: in most categories, Utah’s cost of living gains kept pace with or slightly exceeded national gains. However, because of the astronomic rise in Utah’s housing prices over the last three years, Utah has been among the states hit hardest by inflation.
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