Even though the cost of housing took its biggest drop in almost two years, the Zions Bank Wasatch Front Consumer Price Index (CPI) edged up 0.4 percent from July to August. Higher prices in the transportations and recreation sectors were mostly to blame.
In the past year, the CPI has grown 3.1 percent, while the national Consumer Price Index has increased 1.7 percent since August of last year.
Recreation expenses increasing 9.3 percent during the month due to a major jump in the price of cable and satellite TV. Transportation costs were driven up 0.9 percent by seasonal fluctuations in vehicle prices and the end of a year-long dip in insurance rates.
In a reversal of a recent trend, the housing sector saw a dip in prices in August, falling 0.5 percent — the largest single-month drop since October 2017. The decline was due primarily to a leveling-off of home prices and falling hotel and motel rates at the end of the summer travel season. In part because it’s the largest monthly expense for most Utahns, housing still remains the primary driver of the annual increase in the price index. The housing sector is up 4.5 percent since August 2018, with apartment rental rates up slightly more, at 5.5 percent year-over-year.
“It is not uncommon to see price spikes in a particular sector when providers adjust pricing for the new year,” said Randy Shumway, chairman and partner at Cicero Group, a Salt Lake City-based research firm that does data collection and analysis for the CPI. “We see this during the summer when auto companies transition to new model year cars. We see it in other sectors, such as entertainment and with technology sales as well.”
Utah’s current level of price growth is expected and points to a positive outlook for the state, according to Scott Anderson, president and CEO of Zions Bank.
“Utah has one of the highest job growth and labor force participation rates in the United States, along with a very low unemployment rate,” Anderson said. “Our moderate inflation continues to be a sign of a growing economy.”