Salt Lake City—The Zions Bank Wasatch Front Consumer Price Index (CPI) increased 0.1 percent from November to December on a non-seasonally adjusted basis. Year-over-year, the Wasatch Front Consumer Price Index has grown 3.6 percent, while the National Consumer Price index has increased 2.1 percent since December of last year.
Although prices have remained relatively flat in recent months, the year-over-year inflation rate of 3.6 percent is a consequence of Utah having a strong, growing economy. Increases in housing and transportation costs, as well as in prices for education and for communication technology account for the majority of the overall increase.
On an annual basis, strong Wasatch Front housing demand continues to drive significant housing price appreciation, while rising technology prices, combined with increasing auto insurance rates account for much of the additional increase. According to Kiplinger, a DC-based business forecast publisher, auto insurance rates have risen 21.5 percent in the past 5 years — the largest five-year increase since the early 1990s. Increased repair costs for new car safety features, such as auto cameras and sensors, as well as recent natural disasters have contributed to these rate hikes.
“We have seen sustained economic growth in Utah, which continues to put upward pressure on prices, including in the housing market” said Scott Anderson, Zions Bank president and CEO. “The good news is that incomes are also rising, which is a positive for residents and for the overall state economy.”
Although prices in most sectors of the economy remained relatively unchanged from November, Utah did witness slight price increases in the following sectors:
- Utilities prices increased 0.7 percent in December as propane and fuel prices increased slightly
- Prices for other goods and services increased 0.4 percent in December as laundry and dry cleaning prices increased slightly
Price increases were largely offset by price decreases in the following sectors:
- Medical care prices decreased 1.3 percent as prices for prescription drugs decreased slightly in December
- Recreation prices decreased 0.8 percent as the prices for many veterinary services decreased slightly in December
“Although elevated year-over-year inflation rates statewide may cause concern among some consumers, statewide price stability in recent months suggests that prices are beginning to stabilize after a year of strong economic growth,” said Randy Shumway, chairman and partner at Cicero Group.