The “Looking Glass” ponders economic and real estate trends through two distinct lenses: the optimist’s “glass half-full” and the pessimist’s “glass half-empty.”
Buzz: Yes, Southern California inflation rate has cooled in the past half year. But it’s still a pain in the wallet.
Source: My trusty spreadsheet created a Southern California inflation rate composite, using Consumer Price Indexes for Los Angeles and Orange counties (through February) and Riverside and San Bernardino counties (through January).
Debate: So what cost-of-living increase is tolerable?
Glass half-full
My composite Southern California inflation measurement is up 6.2% in the past year – a significant bite.
But the good news is that local CPI had only a 1.6% increase over the last six months after a 4.5% jump the previous half year. And don’t forget that inflation ran 8% for 2021.
What’s cooling the cost of living’s surge? Ponder these key CPI slices where inflation in the past six months isn’t as painful as the previous half year:
Groceries: It’s hard to sugarcoat the 8.8% jump of the past year, but it’s up only 2.4% in the last six months after a 6.2% surge in the previous half-year. And it rose 7.8% for 2021.
Apparel: The rush to buy for back-to-school and the office ended. Yes, clothing’s up 6.2% in the past year but only 0.8% in the last six months after 5.3% in the previous half year and 5.9% for 2021.
Recreation: There was modest cooling in the cost of fun, which was up 6.2% past year, 2.5% last six months and 3.5% in the previous half year – vs. 5.9% for 2021.
Education/communication: Thank ongoing price wars among cellphone providers. Up 2.9% past year – but only 0.1% last six months after rising 2.8% the previous half year and 0.9% for 2021.
New vehicles: Factories finally delivered enough cars so price hikes could chill. Up 2.3% past year – only 0.9% last six months after 1.4% in the previous half year – vs. 10.6% for 2021.
Gasoline: Prices are down, yes, sliding 2.7% over a year. That’s a 19% drop in the last six months, reversing the 20% gain in the previous half-year. Pump prices rose 38% for 2021.
Used cars: What a turnabout as dealers finally got new cars on their lots! Inflation is down 11% in the past year, including a 13% plunge in the last six months. That followed a 2.4% jump in the previous half-year after 39% gains for 2021.
Durables: Big-ticket items like appliances and furniture are back in stock, just as folks don’t need more. So prices are down 1.7% in the past year and off 3.3% in the last six months. That compares with 1.6% gains in the the previous half-year and 13.1% for 2021.
Glass half-empty
There’s still some bad news out there.
Natural gas: You got the bill, so you know the story. CPI says this fuel’s up 86% in a year and 63% in the last six months after 20% previous half-year after 25% for 2021.
Housing: There’s a cooling market for rents that should impact this CPI slice soon as landlords begin to compete for tenants. It’s up 7.9% in the past year – 4.8% in the last six months after 2.9% in the previous half-year – vs. 6.6% for 2021.
Services: Worker shortages mean labor-intensive work remains pricey. The cost of getting somebody to do something jumped 8% past year including 4.3% in the last six months. That’s after a 3.5% gain in the previous half-year and 6% for 2021.
Medical care: This is the same old story: a constant rise. Up 4.9% past year after 4.8% for 2021.
Bottom Line
Inflation may have cooled locally but it’s still too hot for the household checkbook of most Southern California families.
And it’s a similar cost-of-living pattern nationwide. A 6% jump in the past year came from 2.1% gains over the past last six months after a 3.8% surge in the previous half-year. And, remember, inflation rose 8% in the 12 months ending in February 2022.
It makes for tough choices for U.S. shoppers as well as the inflation fight of the Federal Reserve.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com