Amid inflation and other economic pressures, WalletHub took a look at which of the 23 major metropolitan statistical areas in the country are getting hit the hardest versus a year ago.
Leading the list on a year-over-year basis was the Miami-Fort Lauderdale-West Palm Beach, FL area, which saw inflation rise 6.9% from a year ago. A second metric ranked cities by overall inflation, combining long-term (year-over-year) and short-term (month-over-month) changes in pricing pressure. By that measure, the Denver-Aurora-Lakewood, CO area was ranked as the city with the biggest inflation problem overall, scoring an 89.22 on a scale of 1 to 100.
CPI shows inflation is slowing, but pressures remain
Although inflation has slowed after hitting a 40-year high in 2022, due partly to the Federal Reserve's series of interest rate hikes, pressures remain. The Consumer Price Index (CPI) rose 3.2% on an annual basis in July, according to a recent report from the Bureau of Labor Statistics, after rising 3.0% in June. That July number is 1.2% off of the Fed’s target inflation rate of two percent.
The Consumer Price Index (CPI) is a record of overall price changes measuring inflation on items like food, energy and shelter. Excluding volatile food and energy prices, so-called "core" CPI rose 4.7% in July from a year ago and 0.2% from the previous month.
Multiple experts shared with Kiplinger (in a recent story on July CPI) a generally encouraging outlook on the effects of the Fed’s sustained rate hikes on inflation. A number of the experts suggested rate cuts may come as soon as early 2024 after the Fed weighs a pause on rate movements. For the time being, pricing pressures remain.
How inflation impacts big cities
WalletHub's study showed that while many high population areas have CPIs outpacing national inflation, there are also locations trending below the national average. The areas with the highest year-over-year CPI rate change include:
- Miami-Fort Lauderdale-West Palm Beach, FL: 6.90%
- Tampa-St. Petersburg-Clearwater, FL: 5.90%
- Denver-Aurora-Lakewood, CO: 4.70%
- Detroit-Warren-Dearborn, MI: 4.70%
- Atlanta-Sandy Springs-Roswell, GA: 4.60%
- Seattle-Tacoma-Bellevue, WA: 4.60%
In these places, consumers would feel the sting of increased prices even more. On the other end, some metro areas are seeing inflation stabilize or even decrease compared to the previous year. These are the areas with the lowest inflation rates:
- Anchorage, AK: -3.30%
- Minneapolis-St. Paul-Bloomington, MN-WI: 1.00%
- Houston-The Woodlands-Sugar Land, TX: 1.70%
- Washington-Arlington-Alexandria, DC-VA-MD-WV: 1.80%
- Urban Honolulu, HI: 2.10%
WalletHub also looked at cities with the most overall inflation, combining long-term and short-term CPI statistics to assign a numeric score of 1 to 100, with the higher the number, the greater the inflationary pressure. The areas with the highest overall inflation were:
- Denver-Aurora-Lakewood, CO: 89.22
- Atlanta-Sandy Springs-Roswell, GA: 85.15
- Detroit-Warren-Dearborn, MI: 82.07
- St. Louis, MO-IL: 81.37
- Seattle-Tacoma-Bellevue, WA: 78.01
The areas with the lowest overall inflation were:
- Anchorage, AK: 17.86
- Washington-Arlington-Alexandria, DC-VA-MD-WV: 25.0
- Boston-Cambridge-Newton, MA-NH: 29.90
- Chicago-Naperville-Elgin, IL-IN-WI: 30.53
- Minneapolis-St. Paul-Bloomington, MN-WI: 38.94
