By now everyone has heard plenty about the nine-letter word that’s on everybody’s mind these days — inflation. This reflects a rise in prices, for everything from gas and groceries and cars to health care, coupled with a decline in buying power.
In August, the U.S. inflation rate stood at 8.3 percent, according to the U.S. Bureau of Labor Statistics. That’s down from a four-decade high of 9.1 percent in June. For Houston consumers, though inflation remains above the U.S. rate. And it turns out, Houston is saddled with one of the highest inflation rates among major U.S. metro areas.
Houston’s inflation rate jumped 9.5 percent from August 2021 to this August, according to a new study from personal finance website WalletHub. That means prices for a host of goods and services climbed 9.5 percent from August 2021 to this August.
By the numbers, our near-term inflation rate inched up by 0.10 percent, per WalletHub.
Taking into account the short-term and long-term spikes in Greater Houston’s inflation rate, the region ranked 10th on WalletHub’s list of the metro areas where inflation is increasing the most. In all, 23 major metro areas appear in the ranking.
The Phoenix area ranks first. Its inflation rate in August reached 13 percent, the highest rate of any metro area in the WalletHub study. The short-term change in the inflation rate was 0.80 percent.
The only other Texas metro on the list is Dallas-Fort Worth, which sits at No. 5. In the DFW metro area, the inflation rate jumped 9.4 percent from August 2021 to August 2022. Residents in DFW have seen the inflation rate grow 1 percent in August compared with the previous two months.
WalletHub points out that several factors are pushing up the inflation rate, including the lingering COVID-19 pandemic, the Ukrainian war, and labor shortages.
“The government is hoping to continue to rein in inflation with additional aggressive interest rate hikes this year, but exactly how much of an effect that will have remains to be seen,” WalletHub notes.
John Harvey, a professor of economics at Texas Christian University in Fort Worth, tells WalletHub that he believes hiking interest rates is a bad approach to easing inflation.
“There is no logical reason that lowering the overall level of economic activity (the goal of the higher interest rates) actually helps in situations like this. Furthermore, the only kind of inflation it could possibly address is the good kind,” Harvey says.
This article originally ran on CultureMap.