Housing joins gas to drive up consumer prices

Just like the past several months, gasoline prices continue to contribute to a rise in the cost of living along the Wasatch Front. But in April, housing costs added to the 1.1 percent hike in the Zions Bank Wasatch Front Consumer Price Index (CPI), which increased 1.1 percent from March to April. The index has increased 2.1 percent since this time last year. 

Just like the past several months, gasoline prices continue to contribute to a rise in the cost of living along the Wasatch Front. But in April, housing costs added to the 1.1 percent hike in the Zions Bank Wasatch Front Consumer Price Index (CPI), which increased 1.1 percent from March to April. The index has increased 2.1 percent since this time last year.

Meanwhile, the national Consumer Price Index increased 0.5 percent from March to April and has increased 

1.1 percent over the last year.

Transportation prices were the primary driver of the increase in Utah’s April CPI, rising 3.6 percent from the month before as airfare and gasoline prices increased. The price of Brent Crude Oil, the international benchmark for oil prices, increased nearly 20 percent in April despite volatility stemming from a failed OPEC deal in the middle of the month. Rising crude prices and increased demand pushed gasoline prices higher in April. However, gasoline prices remain low compared to previous summers due to a decline in oil prices year-over-year. Gas prices in Utah were slightly higher last week than the national average of $2.23 per gallon, averaging $2.42 per gallon in the state.

“Rising gasoline and housing prices may seem like unwelcome strains on tight budgets,” said Scott Anderson, Zions Bank’s president and CEO. “But rising oil prices from historic lows lead to greater stability in the global economy, and a strong housing market signals promising returns and financial security for Utah homeowners.”

Prices for food away from home increased 1.6 percent from March to April and have increased 6.6 percent since this time last year. Food away from home prices have been pushed higher as labor costs rise and as restaurants continue to make larger investments in technology. Meanwhile, food at home prices remain relatively low. Food at home prices decreased 0.1 percent in April and have decreased 4.4 percent since this time last year.

Education and communication prices increased 1.4 percent in April as tuition and fees for colleges, elementary and high schools rose. Bolstered by a strong housing market, apartment rental and hotel and motel rates rose also, driving housing prices up 1.0 percent from March to April. Housing prices have increased 4.8 percent since this time last year and are expected to continue to rise through 2016. Accounting for a combined 43 percent of the average Utahn’s consumption, increases in housing and education and communication have a significant impact on the overall CPI.

Recreation prices increased 0.8 percent in April due largely to slightly higher rates for subscription television services. Prices for medical care increased 0.5 percent. With recreation and medical care each accounting for 6.1 percent of a typical Utahn’s consumption, these two categories in aggregate contributed slightly to the increase in April’s overall CPI.

In spite of rising oil prices, utilities declined more than any other sector in April as providers switched to lower summer rates for gas. These lower rates, along with decreased prices for propane, offset slight increases in rates for water, causing utilities prices to decline 2.3 percent for April.

Prices for other goods and services also declined as prices for personal care products decreased. Prices for other goods and services declined 0.6 percent, but only account for 3.0 percent of the average Utahn’s consumption, resulting in a marginal impact on the Wasatch Front’s overall CPI.