Following a slight decline in December, consumer prices have risen for two consecutive months with a modest 0.2 percent hike in February. The Zions Bank Wasatch Front Consumer Price Index (CPI) has now increased 3.2 percent since this same time last year.
The annual increase has been driven by steadily increasing housing prices over the past 12 months, as well as rising clothing prices. The national Consumer Price Index rose 0.3 percent from January to February and has grown 2.7 percent over the past year.
The prices of other goods and services in Utah jumped the most from January to February, increasing by 2.4 percent, while housing prices rose 1.6 percent. Housing alone accounts for nearly 38 percent of the average Utah consumer’s expenditures, so rising housing prices have a significant impact on overall prices in Utah.
“A strong housing market translates to a stronger overall economy throughout the state,” said Scott Anderson, Zions Bank president and CEO. “As housing prices rise, residents are more confident in the value of their homes. They then become more confident in their purchasing power, which has positive repercussions across the economy.”
The rise in Utah’s overall CPI was also driven by higher prices in the following categories:
• Prices for food at home increased 0.7 percent in February as apples, citrus fruits, lettuce and seafood increased in price.
• Education and communication prices increased 0.6 percent as fees for some elementary and high schools increased.
• Clothing prices increased 0.4 percent as prices for men’s and women’s apparel rose.
Utah’s price increases were slightly offset by lower prices in the following sectors:
• Medical care prices decreased 3.4 percent as some medical care services and hospital services became less expensive.
• Food away from home dropped 1.6 percent as prices for both full-service meals and fast food and snacks fell.
• Transportation prices decreased 1.5 percent despite rising gasoline prices as airfare, vehicle rentals and car insurance prices declined.
• Utilities prices decreased 0.2 percent as sewer rates went down.
“We’re seeing price increases in the right places, like housing and clothing,” said Randy Shumway, chairman and partner at Cicero Group, a market research firm based in Salt Lake City that does data collection and analysis for the CPI. “Prices are increasing at a relatively slow pace, which gives consumers time to adjust, but the pace is also steady, which gives businesses time to ramp up and plan for the coming months. Overall, things are looking good for Utah’s economy.”