Housing and recreation prices lift Wasatch Consumer Price Index

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The Zions Bank Wasatch Front Consumer Price Index (CPI) increased 0.7% from October to November on a non-seasonally adjusted basis. Year over year, the Wasatch Front Consumer Price Index has grown 3.5%, while the national Consumer Price Index has increased 2.1% since November of last year.

Rising prices within the housing sector caused most of the price growth in November as apartment rental rates and hotel and motel prices ticked up. Housing prices grew by 1.2%, the largest single-month increase since May 2018, ending a five-month streak of slowing 12-month price growth. Year over year, housing prices have increased 3.6%.

Increasing prices in the recreation and transportation sectors also contributed to higher prices along the Wasatch Front. Prices in the recreation sector rose 3.2% in November due to increases in prices for cable and satellite TV, while higher gas prices drove up transportation prices by 0.6%.

The 12-month price growth for the recreation sector has risen for four-consecutive months and is now at 16.7% — the highest level ever recorded in this index. It is now the second-largest factor contributing to year-over-year price growth along the Wasatch Front.

“Utah’s economy remains strong and unemployment is low. This naturally leads to some inflation as consumer demand remains strong,” said Randy Shumway, chairman and partner at Cicero Group. “Given that much of the growth is coming in our housing sector, this price growth positively affects the wealth of homeowners in the state.”

On a broader scale, the U.S. Bureau of Labor Statistics announced that national unemployment decreased to 3.5% in November, while the U.S. Bureau of Economic Analysis reported that the national gross domestic product increased at a rate of 2.1% in the third quarter of 2019.

“We’re seeing some positive economic developments around the country,” said Scott Anderson, president and CEO of Zions Bank. “Nationally, third-quarter GDP growth was higher than expected. This signals that the U.S. economy is faring well, even as some parts of the world are seeing more slowing.”

Analysis and data collection for the Zions Bank CPI and the Zions Bank Consumer Attitude Index are provided by Cicero Group, a Salt Lake City-based management consulting firm. The Zions Bank Utah Consumer Attitude Index will be released Dec. 31.