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The Zions Bank Wasatch Front Consumer Price Index (CPI) increased 0.5 percent from May to June, on a non-seasonally adjusted basis. The U.S. CPI, which is an aggregation of all prices throughout the nation, decreased 0.1 percent on a non-seasonally adjusted basis. Since June of last year, the Zions Bank CPI has increased at a healthy rate of 3.3 percent, while the U.S. CPI has increased at a slower pace of 1.7 percent.
Medical care costs increased considerably in June, and the price of food —both at home and away — also increased notably for the second straight month.
The price of medical care increased 2.5 percent in June after being relatively stable this year across the Wasatch Front. Most medical services reported price hikes in June, which contributed to the largest increase in the cost of medical care since October of 2011. Medical care costs in the U.S. have escalated 4.0 percent over the last year, much faster than the rate of inflation. The Wasatch Front has experienced a much smaller 0.5 percent increase in medical costs over the same period.
A relatively healthy population and an efficient health care system help explain stable medical care prices in Utah. The United Health Foundation ranks Utah as the seventh healthiest state, and Utah is one of only a few states to have an effective health insurance exchange.
Food costs along the Wasatch Front increased for the second month in a row, as food at home and food away prices both rose 0.6 percent. Increases in the price of meat products, including beef and poultry, continue to drive food at home costs higher. The drought in the Midwest has severely affected crop production this summer. Smaller harvest yields mean that meat producers have to pay more for corn and grain to feed their livestock, and the increase in the price of production gets passed on to the consumer. Meat prices are likely to maintain an upward momentum as the price of corn and other inputs increase.
Another price trend that continued to rise in June was the price of housing. Housing prices climbed 0.2 percent along the Wasatch Front, compared to 0.5 percent nationally. The price of renting an apartment and the price of a staying at a hotel in the area increased more than 0.4 percent and 2.2 percent respectively. Continued growth in housing prices is a positive sign for recovery in the economy.
Overall, transportation costs across the Wasatch Front rose 0.6 percent in June, driven primarily by escalating car rental and car insurance fees. The relatively modest price increase in this area represents the slowest growth rate since February 2012. Additionally, the price of gasoline fell for the first time in the last four months. While, gasoline prices in Utah only fell two-cents on average from May to June, prices at the pump decreased from the first week of June to the last week of June approximately 10 cents. The price for a gallon of gas should continue to fall in the short term signaling a substantial financial relief for consumers.
“It’s important to remember that even though the recovery has been tepid, the economy is in a much better place now than it was 12 to 18 months ago,” said Zions Bank President and CEO Scott Anderson. “In Utah, unemployment is lower and consumer confidence is higher than they were at this time last year. While policy makers struggle to steady international markets, Utah is positioned to lead the recovery here in the U.S. Zions Bank will continue to track the economy and deliver the most relevant information Utahns.”
Analysis and data collection for the Zions Bank CPI and the Utah Consumer Attitude Index, to be released July 31, are provided by the Cicero Group, a premier market research firm based in Salt Lake City.