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The Zions Bank Wasatch Front Consumer Price Index (CPI) increased 0.5 percent from April to May, 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. Over the last 12 months, the Zions Bank CPI has increased 2.6 percent, while the U.S. CPI has increased at a slower rate of 1.7 percent. Food at home and transportation prices both increased approximately 1.0 percent, driving the majority of the inflation in May.
Increases in the costs of transportation have been a consistent driver of the inflation since February. May saw a 1.2 percent increase in the price of transportation across the Wasatch Front, compared to 1.0 percent decrease nationally. Unlike previous months, gasoline prices were not responsible for the growth in this area. Instead, car insurance rates drove transportation prices upward. Car insurance prices rose in May after falling considerably at the beginning of the year.
Gasoline prices in Utah remained relatively unchanged from April, increasing only 0.3 percent. Stable prices at the pump are a positive sign for the economy moving forward. While Utah currently has higher gas prices than the national average of $3.54 per gallon, falling gasoline prices across the United States suggests that rates peaked this spring.
Prices for food at home also swelled 1.0 percent in May, their largest increase since January. Fresh produce and meat products make up the majority of food at home, and both experienced notable price increases. Conversely, the price of dairy products fell, offsetting some of the inflation in this area.
Continuing a trend from last month, housing prices rose again in May. Prices in the housing sector increased 1.0 percent in April, the largest surge in housing value in over a year. May's increases were at a more modest 0.2 percent rate with most of the inflation driven by hotel prices and home furnishings. The cost of a night's stay at a local hotel increased 2.1 percent locally, while furniture, bedding and appliance prices all rose by more than 2.0 percent. National housing market data parallels this local trend. With housing prices increasing nationally by 0.1 percent in May, combined positive news in the sector continues to support the belief that the U.S. housing market is recovering.
Prices in all other areas, except recreation, experienced modest increases. Most notably education, medical care and clothing increased 0.6 percent, 0.9 percent and 1.1 percent respectively. A 1.8 percent rise in college tuition costs drove education prices higher. Increasing costs of nonprescription drugs and medical services propelled medical care prices higher. A 2.4 percent rise in the price of men's apparel drove clothing prices higher.
"Growth in the Utah economy continues to outpace the rest of the nation," said Zions Bank President and CEO Scott Anderson. "Utah has a stronger job market and higher levels of consumer confidence, so it's not surprising that consumer demand remains healthy across the Wasatch Front. Furthermore, it appears that gasoline prices are coming down from their peaks nationally, indicating that we may see some relief at the pump this summer. Zions Bank will continue to monitor economic conditions in the state of Utah, and will provide relevant updates to the community."
Analysis and data collection for the Zions Bank CPI and the Utah Consumer Attitude Index, to be released June 26, are provided by the Cicero Group, a premier market research firm based in Salt Lake City.