By Chris Melore
With inflation hitting a 40-year high in 2022, Americans around the country are finding it harder to make ends meet. However, a new study finds some areas are feeling it much more than others.
Researchers from personal-finance website WalletHub compared 23 major Metropolitan Statistical Areas (MSAs) to find out where inflation is rising the most. To do so, they looked at two key markers of inflation: the Consumer Price Index for the latest month versus two months prior, and one year prior.
Results reveal Americans in Phoenix, Arizona have seen their wallets take the biggest hit in 2022. While the Consumer Price Index has only increased by 0.80 percent over the last two months, prices have skyrocketed by 13 percent versus one year ago. Rounding out the top five are Atlanta, Miami, Tampa, and Baltimore. The Consumer Price Index has increased by more than 10 percent in those cities over the last year.
In the short term, current prices have skyrocketed faster in Atlanta, Boston, San Diego, and Honolulu over the last two months.
On the other side of the spectrum, residents in several major cities have been spared the worst of the inflation crisis. At the bottom of the list, prices are rising the least in Anchorage, Alaska. The Consumer Price Index now versus two months ago has actually dropped by four percent in Anchorage. Over the last year, however, it’s still up by 7.6 percent.
Other cities seeing slower rates of inflation include San Francisco (22nd), Washinton (21st), New York (20th), and Denver (19th) — all of which have a year-over-year change of less than eight percent.
How can the country slow inflation?
“This is the primary responsibility of the Federal Reserve, the monetary authority of the US. The Federal Reserve must signal its credible commitment to pursuing anti-inflationary policy by raising interest rates aggressively. It must also aggressively signal that it will not pay for new debt issued by the Government of the United States by printing money. Increases in the interest rates will likely result in reduced income and economic growth for the immediate future, however, this is the necessary but difficult cost of reducing inflation and inflation expectations going forward,” says Harlan Holt, a visiting assistant professor at Union College, in a statement to WalletHub.
“The consumer can save more, though rising prices lead to behavior to spend now because expectations of inflation are rising, but mainly it is increasing interest rates and moderating fiscal spending in such a way as to not provide other reasons for consumers to spend. Unfortunately, the cost of higher interest rates is to slow business spending and investment, including as much hiring. We should expect workers to lose their job and the number of job openings to drop over the next 12 months. Much of this is a reaction to both rising prices and wages and now rising interest rates,” warns Robert Eyler, a professor at Sonoma State University.
Cities Where Inflation is Rising The Most
|Overall Rank||MSA||Total Score||Consumer Price Index Change
(Latest month vs 2 months before)
|Consumer Price Index Change
(Latest month vs 1 year ago)
|2||Atlanta-Sandy Springs-Roswell, GA||91.10||1.30%||11.70%|
|3||Miami-Fort Lauderdale-West Palm Beach, FL||75.76||0.40%||10.70%|
|4||Tampa-St. Petersburg-Clearwater, FL||73.44||0.30%||10.50%|
|6||Dallas-Fort Worth-Arlington, TX||66.43||0.50%||9.20%|
|7||Houston-The Woodlands-Sugar Land, TX||64.71||0.10%||9.50%|
|8||San Diego-Carlsbad, CA||63.35||0.90%||8.20%|
|12||Los Angeles-Long Beach-Anaheim, CA||56.84||0.50%||7.80%|
|13||Riverside-San Bernardino-Ontario, CA||56.23||0.00%||8.40%|
|17||St. Louis, MO-IL||51.95||0.20%||7.50%|
|18||Urban Honolulu, HI||51.45||0.80%||6.60%|
|20||New York-Newark-Jersey City, NY-NJ-PA||44.93||0.40%||6.20%|
|22||San Francisco-Oakland-Hayward, CA||33.02||-0.50%||5.70%|