Consumers feel the price is pinching almost everything they buy when local inflation rates hit 40-year highs in Southern California.
The March Consumer Price Index shows that the total cost of living jumped 10% a year in the Inner Empire while jumping 8.5% in the Los Angeles and Orange counties, the same as the US inflation rate.
The economic revolutions of the plague era created an amazing change. A year ago, when the economy shook off a chilling epidemic, inflation was measured at 3.6% in IE, 2.2% in LA-OC and 2.6% nationwide. And in May 2020, when closing was the norm, inflation was below 1% across Southern California and the state.
When my loyal spreadsheet looked at this inflation attack – the highest since 1982 for the long-running LA-OC index – it found widespread price increases, far more than just the pain in the fuel pump that drivers witness every day.
Let’s start with the same “goods”, the routine purchases of essential products like gasoline and groceries. The Consumer Price Index says that these prices have risen by 14.7% since March 2021 in the Inner Empire and by 13.4% in the Coastal Districts.
But it’s not much more than the rising cost of “sustainable products” – larger purchases of tickets, such as cars, sofas and clothes. These prices rose by 13% near the coast and by 11.2% inland.
And when you need help, the rise in “services” prices seems relatively moderate: a 7.3% increase inland and 6% near the coast.
How did it happen?
The twists and turns of the epidemic economy have fueled price increases. Lock-ups and a rapid recession When the Corona virus first hit, led to a disrupted but almost complete economic recovery.
This roller coaster has eliminated everything from factories to the supply chain to how workers think about their work.
Also, do not forget that cheap money pushed by the Federal Reserve acted as an incentive to continue buying from buyers while raising stock and real estate values. The great wealth added to many households allowed people to go on recreational trips.
Basically, today’s inflation amounts to too many dollars chasing too few products and services.
Traders and manufacturers faced increased material costs as they struggled to find workers as wages skyrocketed.
Unemployment in Southern California in February reached a low of the epidemic era, 4.95%. One federal wage index for Southern California, the labor cost index, shows that private sector wages rose 5.6% last year from 3.9% in 2020 and an average of 2.6% in the previous nine years.
Think about how all this economic turmoil has raised the local cost of living, by key parts of the consumer price index …
gasoline: An increase of 49.1% in the last 12 months in the coastal districts compared to 48.9% in the Inner Empire.
Used vehicles: An increase of 33.9% inland compared to 33.8% from the coast.
electrical power: An increase of 24.2% inland compared to 17.7% from the coast.
Natural gas: An increase of 22.7% on the coast compared to 18.8% inland.
Meats, poultry, fish, eggs: An increase of 16.4% inland compared to 10.3% from the coast.
Cereals and pastries: An increase of 10.9% on the coast compared to 10.7% inland.
New vehicles: An increase of 10.8% on the coast compared to 6.7% inland.
alcoholic drinks: An increase of 9.3% inland compared to 5.9% from the coast.
recreation: An increase of 11.1% on the coast compared to 3.8% inland.
dressed: An increase of 6.7% inland compared to 6.6% from the coast.
Outdoor food: An increase of 6.1% inland compared to 5.2% from the coast.
renting: An increase of 7.4% inland compared to 3.4% from the coast.
Medical Care: An increase of 6.5% on the coast versus 3.8% inland.
Tuition and childcare: An increase of 8.8% on the coast compared to 1.5% inland.
PS: Global view
The cost of living in a hot air balloon is not just an issue in the US.
Inflation among major countries, according to Trading Economics, ranges from the highs of Turkey’s 61% and 52% of Argentina to near-level increases in the US in Spain (9.8%), the Netherlands (9.7%), Mexico (7.5%) and Germany ( 7.3%) to the low of China (1.5%) and Japan (0.9%).
Jonathan Lansner is the business columnist for Southern California News Group. You can contact him at email@example.com