Inflation rate in San Diego is one of highest in nation
Speaker 1: (00:00)
San Diego has one of the highest inflation rates in the nation. According to data released by the U S bureau of labor statistics is consumer price index. For the month of September. The increased inflation rate is indicative of the heavy economic toll of the years, long pandemic. As the holiday season approaches higher prices and a greatly stressed supply chain are uncovering what experts are calling a greatly overstimulated economy. One where consumers end up paying the price. Joining me with more is the San Diego union Tribune, senior business reporter, Phillip Molnar, Philip. Welcome back to the program.
Speaker 2: (00:37)
Thank you so much for having me. So can
Speaker 1: (00:39)
You give us a snapshot of this increased inflation rate what's causing this jump and why are things particularly bad in San Diego? Okay,
Speaker 2: (00:47)
So we've seen inflation really rising throughout 2021 across the entire nation, but San Diego typically is hit a little bit harder because in Western markets, especially in California, we have higher housing costs and gas prices. So that's why we're always sort of at the top end of inflation. But what's been sort of interesting this year is, you know, a lot of the experts, especially even the federal reserve were saying that inflation rate is going to go really high up as soon as we're out of all these pandemic restrictions. And then just everybody calmed down. Cause after that's over, it's going to level out. What we've seen is the inflation rate keeps going up and that's why I've been reporting on it like every two months. So last month was 6% inflation rate, which is pretty wild to begin with. And then this month was 6.5%. So it's, it's growing and it's, it is a cause for concern.
Speaker 1: (01:44)
So where are some of the biggest areas where consumers are feeling the effects of inflation?
Speaker 2: (01:49)
So we're consumers are feeling it most is for gas, unleaded. Regular is up 40.4% in a year. It's a huge jump. And other jumps are for used cars and trucks up 23.4% and energy in general, which is up 31.3%.
Speaker 1: (02:07)
And you note that we're seeing some of the highest prices in all of the pandemic is that expected to drop anytime soon,
Speaker 2: (02:15)
Most experts I talked to for this article do not anticipate a major drop, which is sort of frustrating because it really, when there's these high price gains, the people that are always hit hardest are the low income workers in San Diego. We have to pay more out of pocket because in general they just make less money. So there's a lot of things going on. There's a really stressed supply chain right now, which is creating more demand for products which rises the prices. Uh, one of the things is that a lot of people that do need all that stimulus money that was pumped into the economy. Now they're doing much better. Their, their financial pictures better, especially if you were a stay at home worker. So a lot of those people have more money than they did at this time last year. And that really a lot of spending power for all these goods that we're talking about, that drives up the price. Cause everyone's got money to buy them.
Speaker 1: (03:06)
Are these rising prices causing employers to consider permanently raising wages?
Speaker 2: (03:11)
Well, you know, it's funny whenever I report on the inflation, I always ask the same question. Like, is it employer are going to read this article or listen to this radio program and say, oh dang, I got to raise all my rate. My, my wages right now, or my employees are going to be really hurting. And what I've kind of found, even though it might not be the case at whatever business you're at when you're reading this story or listening, but wages are significantly up in San Diego. So it might not be necessarily that employers see this inflation and say, yo, I need to really raise my wages. The fact is it's already happy. For instance, the latest data I have is for May, 2021, where the average wage in San Diego and keep in mind it's average. So it's going to be weighted to really high wages are going to change things. But the average wage was 34 point 95 cents an hour. That is an 18% increase in two years. So things are really up.
Speaker 1: (04:10)
And even in normal circumstances, metropolitan areas in California have higher than average inflation rates than the rest of the nation. How has the added pandemic stress making that worse?
Speaker 2: (04:21)
Well, gas prices is probably the biggest thing that moves the market one way or the other California gas prices are always higher. So if you see a big jump in gas prices, that's definitely gonna affect our inflation rate. One of the things in the past, just about uniformly across most coastal California markets is higher housing costs. So that that often pushes the needle for inflation. But in this case right now, what we're seeing, where the big surge is is these price for used cars and back to gas prices. That's really what's affecting right now. But in general, typically when you get these numbers, San Diego and Los Angeles and Riverside, we're usually up at the time.
Speaker 1: (05:05)
What do these high inflation rates signify for consumers in the longterm?
Speaker 2: (05:10)
Um, for right now, it's rough. If you're trying to do a few things, let me give you a scenario. So say you're sort of a low income worker and you've just reentered the economy. You got a new job, but you need a car to get there. And your last car broke down. Well, it's going to be a really hard to get a used car because they're super expensive right now. And new car prices earn up as much as used cars, but then again, that's a way bigger expense. So that's something you need to consider. There. Also food prices are way up, you know, but one of the things you can kind of see from the inflation data is where you could make a mistake. So for instance, for food and beverage costs, food prices are up 7.6%. But when we break that down a little bit, food prices at home are up 5.7%, but food costs at restaurants are up 10.1%. So you might want to looking at all this data, if you want to make an informed decision, maybe not eat out as much.
Speaker 1: (06:04)
And now inflation is bad enough for consumers, but a less considered aspect of this is how a jump in prices can affect costs for businesses as well. What can you tell us about that,
Speaker 2: (06:14)
Uh, businesses? This could have a long-term effect on the economy here in San Diego, because the cost for materials is going way up. And as we just spoke about the wages, you have to have wages higher to keep workers in San Diego right now. So all those costs are going to cut into the bottom line of businesses. I mean, there's a lot of evidence that business is good right now because there is, as we spoke about a lot more spending power, but it's kind of tough when you break it all down and we'll see sort of by the end of the year that the costs are really increasing for businesses, especially smaller ones. And it might be a question of whether or not they survive these next few months.
Speaker 1: (06:50)
Is there a historical precedent for inflation numbers right now?
Speaker 2: (06:55)
Sort of, except we haven't really seen much of a precedent in the last 20 years. If you go back 20 years, the average inflation rate jump has been around 2.6%, but we've had some really high points in San Diego history about 11% in 19 74, 13 0.5% in 1981. And it did get up to 6% in 1990, but that was sort of an outlier year. So what that means is that most millennials alive today have not yet experienced a high inflation environment. They haven't really lived through it. So it's funny. I talked to some economists, uh, yesterday and I would say, well, how are all these millennials? I'm a millennial, how are all these millennials going to deal with? You know, this, how are they going to weather this? And one of the economists I spoke to was like, well, I don't think they have a choice and he's right. So yeah, w we're all, a lot of us are living through this for the first time and it's sort of unique.
Speaker 1: (07:51)
Um, I've been speaking with the San Diego union Tribune, senior business reporter, Phillip Molnar, Philip. Thanks for joining us. Thank
Speaker 2: (07:59)
You so much.
Speaker 3: (08:02)
San Diego has one of the highest inflation rates in the nation, according to data recently released by the U.S. Bureau of Labor Statistics’ Consumer Price Index for the month of September.
The inflation rate for San Diego County was the second-highest in the nation at 6.5% compared to the national average of 5.4%.
The report indicated that gas prices in particular are up in the western region, with prices at the pump up by nearly 40%.
The increased inflation rate is indicative of the heavy economic toll of the now years-long pandemic.
As the holiday season approaches, inflation-induced higher prices and a greatly stressed supply chain are highlighting what experts have called a “greatly overstimulated economy.”