Can You Guess Where In America Inflation is the Highest?

According to the Bureau of Labor Statistics, consumer prices rose 0.3% in June, putting year-over-year growth in prices at a little less than 2%.

When looking at the core inflation, which extracts out food and energy, consumer prices just barely surpassed the 0%.

Overall, both measures of consumer prices are still floating in “low” territory, with both in the lower quartile of prior inflation rates.

Consumer Prices by Sector

Before going into the geographic view of inflation, here’s a look at consumer prices by sector.

Before looking, can you guess in which sector CPI has been the strongest since 2013?

The highest inflation sector since August 2013 isn’t Medical care, it’s Services (it’s easier to see when looking at the table following the line graph).

Since August 2013, Services is up 4.58%, followed by Medical care at 4.42%, and Housing at 4.32%.

On the other end, Transportation (mostly because of the drop in the price of oil) is down 5.95%, followed by Nondurables at -2.45%, and Commodities at -2.27%.

Where is Inflation Showing Up?

With some brief background established, do you think you can guess where inflation in the U.S. is the highest?  Lowest?

Here’s a map view of inflation by MSA since 2009.

The map is color-coded.  The darker the green, the less the inflation.  The darker the red, the less the CPI.

Perhaps surprisingly, inflation is strongest in the middle of the country and in certain west coast locations.

With this map, can you guess where is inflation is the highest?

Here’s the answer.

The MSA with the highest inflation experience since 2009 is San Jose-Sunnyvale-Santa Clara, California, at 23.30%.  The technology bubble is alive and well.

Other areas with high inflation rates include Bismarck, North Dakota at 22.68% (the oil industry), Santa Barbara-Santa Maria-Goleta, California at 20.10%, Owensboro, Kentucky at 19.35%, and Fairbanks, Alaska at 19.02%.

On the other end, the best inflation area (lowest inflation) is Carson City, Nevada at 1.82%.  The housing crisis, unsurprisingly, had an outsized effect on this Vegas-related town.

Other areas with low inflation include Naples-Marco Island, Florida (2.64%), Reno-Sparks, Nevada (3.19%), Jacksonville, Florida (3.46%), and Lake Havasu City-Kingman, Arizona at 3.47%.

If you’re looking for a specific location, here’s the inflation picture sorted alphabetically.

Conclusion

Overall, inflation is the highest in technology areas of California, such as San Jose and Santa Barbara, and oil-boom driven areas such as Bismarck, North Dakota and Fairbanks, Alaska.

The areas with the lowest inflation experience include areas hardest hit by the housing crisis, including Carson City, Nevada (up just 1.82%), Naples-Marco Island, Florida at 2.64%, Reno-Sparks, Nevada at 3.19%, Jacksonville, Florida at 3.46%, and Lake Havasu City-Kingman, Arizona at 3.47%.

Overall, inflation exhibits a lot of the same characteristics as housing – location, location, location.