Fueled by a drop in gas prices, inflation in the Seattle metro area finally slowed down in August. That’s been little relief to consumers, though, as food and shelter costs continued their relentless climb.
In August, prices of goods and services in the Seattle area remained unchanged from two months earlier, when inflation hit a four-decade high, according to figures from the Bureau of Labor Statistics released this week.
Nationally, the Consumer Price Index, a shorthand measure of the change over time in prices consumers pay, rose 0.1% in August, after reporting no change in July.
In the Seattle metro area, prices increased 9% over the past year and are still higher than the national average increase of 8.3% for the same period.
Compared with other major U.S. cities, the Seattle metro area reported the slowest growth in inflation, federal data shows. That’s a noticeable change from February, when the city recorded one of the highest increases among metros. Seattle’s inflation growth is still higher than metros like San Francisco, Los Angeles and Chicago, which saw greater declines in the price of gas.
Prices monitored in the CPI are those on a sample of everyday items, ranging from groceries to appliances, transportation to housing. These items are often referred to as a “marketbasket” of goods and services and are weighted against a household budget to measure how the increase in prices affects the average person.
Since August 2021, the rising prices of food and energy drove the rise in the cost of living in the Seattle area. Rocketing gas prices and persistent supply chain issues boosted the cost of goods with generally stable prices, like household furnishings and vehicles. Those less-volatile “core prices” rose, leading to a now more stubborn phase of inflation, undoing any wage gains recorded this year.
In the past two months the cost of fuel dropped nearly 12 percentage points in Seattle. Dairy products, medical care and used vehicles also reported minor dips. Those were offset by a rise in the cost of other less-volatile goods, particularly housing, durables — items such as appliances, electronics and jewelry — and vehicles. Even groceries and alcoholic beverages showed increases.
When measuring inflation, the Federal Reserve pays particular attention to these less-volatile items. The recent range of price increases has dashed hopes that core inflation will ease soon.
The latest figures have heightened fears of more aggressive interest rate hikes from the Fed and sent stocks plunging, with the Dow Jones Industrial Average falling more than 1,200 points earlier this week. They solidified worries that inflation has now spread into all corners of the economy.