NYC Has The 5th Biggest Inflation Problem In The U.S.
I think we can all agree that no one likes inflation. And after the U.S. inflation rate reached a 40-year high following the pandemic, we’re fortunate it’s at least gone down a little since. And though our nation’s inflation rate has improved, New Yorkers should know that they’re dealing with the fifth largest inflation problem in the country, according to a new study from WalletHub
As of August 2024, the United States’ inflation rate is 4.2%, 0.2% above the target 2%. At this standard 2%, economies are supposed to be able to achieve price stability for prosperous growth. Labor shortages and the war in Ukraine are just some factors WalletHub believes the U.S. has surpassed this target rate.
But inflation doesn’t just differ by country, but by state and city as well. So to gain further insight, WalletHub analyzed 23 major Metropolitan Statistical Areas against two metrics regarding Consumer Price Index:
- Consumer Price Index Change (Latest month vs 2 months before)
- Consumer Price Index Change (Latest month vs 1 year ago)
Each metric was assigned a weight to land on a total score that demonstrates how inflation has changed, both short and long term, for each area.
Minneapolis-St.Paul-Bloomington, MN-WI leads the list for having the worst inflation problem in the country, with a score of 83.33. Other high inflation cities include Chicago-Naperville-Elgin, IL-IN-WI (77.81) in second place, followed by Detroit-Warren-Dearborn, MI (70.18) and Urban Honolulu, HI (65.79) in third and fourth. New York-Newark-Jersey City, NY-NJ-PA was declared the fifth worst area for inflation problems with a total score of 65.61.
So what makes inflation so different across cities? “Nationwide impacts like supply chain issues and interest rate expectations are still present, but housing prices seem to be a significant driver of price differentials among cities,” explains Malcom Kass, Assistant Professor at the University of Dallas. “Just looking at the year-over-year numbers, it is hard to determine much, except that NYC and some other cities are probably still not allowing enough housing to be built.” However, New York does have plans to build 33,000 new apartments.
WalletHub’s full study details a more in depth look at which areas are facing the biggest inflation problems.
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