Inflation increased to a headline 9.1 percent in June—a 40-year high—giving the Biden administration a prolonged headache. But for many areas of the U.S., double-digit inflation is now the norm.
A month ago, there were only four urban areas with inflation above 10 percent. Now there are eight, with Seattle, Miami, Houston and Baltimore all registering inflation in double-digits for the first time. The other four cities with above 10 percent inflation are Atlanta, Phoenix, Tampa and the metropolitan area of Riverside-San Bernardino.
Urban Alaska has the highest inflation at 12.4 percent. The highest in mainland United States is Phoenix, with 12.3 percent. For all cities, these are the highest figures available data from the U.S. Bureau of Labor Statistics (BLS), which goes back to 2002.
Monthly urban inflation data is not available for all areas—some areas have data every two months. This makes it hard to track which area is experiencing the biggest increase. Chicago has seen one of the highest increases, whether viewed over one or two months, going from 7.2 percent in April and 8 percent in May to 9.4 percent in June.
This Statista chart shows the year-on-year change in the Consumer Price Index for all urban consumers in the U.S.
The area with the highest increase in inflation over the last two months is Urban Alaska, which jumped nearly 5 percentage points from 7.5 percent to 12.4 percent. The cities with the lowest inflation in the breakdown are New York with 6.7 percent, and San Francisco with 6.8 percent.
Overall in the U.S., the consumer price index for all urban consumers increased 1.3 percent in June after rising 1 percent in May, the BLS reported. The largest contributors were gasoline, shelter and food. The energy index rose 7.5 percent over the month and contributed to nearly half of the all item increases, with the gasoline index rising 11.2 percent.
Gas prices have been one of the main contributors to inflation, with every U.S. state now experiencing average prices of over $4 per gallon. A year ago, only two states had gas over $4, according to data from the American Automobile Association. The state with the highest increase is Arizona, which has seen average prices go up 57.6 percent.
The high levels of inflation have led the U.S. Federal Reserve to raise interest rates in an effort to curb spiraling prices, with further rate hikes expected in 2022. However, indicators from various sources, including the Federal Reserve Bank of Atlanta, show the U.S. economy is heading for a recession, which would raise the prospect of so-called stagflation—a period of economic stagnation coupled with spiraling prices.
The Atlanta Fed's latest forecast predicts -1.2 percent GDP growth in the second quarter of 2022.
However, there are reasons for the Biden administration to be optimistic. The latest job figures show non-farm payrolls increasing by 372,000 in June, and the oil price (WTI crude) falling from around $120 per barrel in mid-June to around $96.
