The inflation rate in the Bay Area, which has crushed consumers beneath the weight of sky-high prices, cooled off in a big way in October, rising at its slowest annual pace in more than two years. But not everyone’s noticed the difference.
“Things are costing me a lot. I’m not seeing much improvement,” said Arnufo Martinez, a San Jose resident.
The consumer price index in the Bay Area rose at an annual rate of just 2.8% in October, according to Tuesday’s report from the U.S. Bureau of Labor Statistics. That marks the slowest rate of annual increase since February 2021, when the region’s inflation rate rose 1.6%. The cooling trend is also welcome news for some consumers shopping for the upcoming Thanksgiving holiday, especially with the price of some grocery items leveling off.
Bay Area gasoline prices fell and costs for many kinds of foods eaten at home, including meat, either declined or rose by just a tiny amount, when measured on a yearly basis.
The nationwide inflation rate rose at a yearly pace of 3.2% in October, the federal labor agency reported.
Still, the easing of the pace of increases in Bay Area prices for goods and services provided only cold comfort for several consumers this news organization spoke with Tuesday.
“Oh my gosh, food prices are shocking,” said Patrick Bumb, a San Jose resident who was filling up his vehicle at a South Bay gasoline station.
Electricity services — such as those provided by utility behemoths like PG&E — have skyrocketed in cost in the Bay Area, a grim counterpoint to the otherwise hopeful trends in overall inflation, the report shows.
Over the one-year period that ended in October, the cost of electricity provided by a utility like PG&E soared at a pace that was an eye-popping five times faster than the overall Bay area inflation rate.
And the ominous report on electricity costs arrives just ahead of an anticipated decision this week by state regulators to authorize — yet again — a big increase in PG&E monthly bills for the company’s customers.
Prices for an array of food items consumed at home, including meat, dairy, poultry, fish, eggs and cereal, all showed declines or moderate increases. Food away from home, though, continues to become more expensive and rose at an annual pace that was nearly double the overall inflation rate in the Bay Area.
Here are the goods and services categories that showed increases over the past 12 months. The figures all represent an annual rate of increase measured over the one-year period that ended in October.
— Electricity delivered by utility companies such as PG&E, up 14%.
— Food consumed away from home, up 5%
— Apparel costs, up 2.9%
— Rental of apartments or houses, up 2.8%
— Food prices, both at home and away from home, up 2.8%
— Cereals and bakery products, up 2.8%
— Meat, poultry, fish and eggs, up 2%
— Food consumed at home, up 1.9%
— Medical care, up 1.1%
— Household furnishings, up 1.1%
— Tuition, educational fees, childcare, up 0.1%
Nationwide, food prices have increased for 39 straight months, First Trust Advisors, an investment firm, stated Tuesday in a research note.
Even with the cost of food leveling off, price tags remain sky-high compared to where they were just two years ago.
Compared to October 2021, overall consumer prices in the Bay Area have hopped higher by a stunning 8.9%. Over the same two-year period, prices have soared 13% for food, 21.2% for unleaded gasoline and by a shocking 35.7% for electricity provided by a local utility such as PG&E.
“Meat is really expensive for sure, gasoline, of course, produce is bad, too,” said Kathy Armstrong, a San Jose resident. “Things that we need are just costing too much.”
For that reason, even with the easing of inflation on a one-year basis, some consumers are still feeling the pinch with the holiday shopping season looming.
“The holidays are coming up so there’s not going to be any relief,” Armstrong said.
To combat inflation and slow down economic growth, the Federal Reserve has shoved interest rates higher. But this effort could choke economic growth so much that a severe downturn could become the consequence of the Central Bank’s quest.
“We continue to believe that a monetary policy tight enough to bring inflation down is also tight enough to induce an eventual recession,” Brian Wesbury, chief economist of First Trust, wrote in the research note to investors. “As for the economy, we continue to believe a recession is on the way.”
