The Zions Bank Wasatch Front Consumer Price Index decreased 0.2 percent from October to November on a non-seasonally adjusted basis.
The index has increased 0.5 percent since this same time last year. The national Consumer Price Index, released today by the Bureau of Labor Statistics, decreased 0.5 percent from October to November on a non-seasonally adjusted basis and has increased 1.3 percent over the past twelve months. Inflation continues to remain below target levels nationally and statewide.
Transportation prices dropped for the third month in a row, declining 1.2 percent from October to November. Gas prices alone decreased 7.2 percent in November. Gasoline has been the largest driver of the transportation price index decline for the past two months and has been declining for the past four months in a row. Gasoline prices have a major effect on inflation, in part because they are consistently a part of the average person’s purchase decisions. The average price per gallon of gasoline in November was $3.11, down from $3.35 the month prior and $3.55 the month before. Utah gas prices are now at $2.64 per gallon compared with $2.50 nationally.
While a portion of the gasoline price change is due to typical seasonal declines, falling oil prices have also contributed. Global oil prices are hovering around $60, down from $105 a year ago, and are expected to continue to drop as global production remains steady and demand remains weak. With a weak Eurozone and Japanese recession, among other frail economies, oil purchases are not expected to increase in the short term. Oil prices began declining in June and have plunged since September. Lower prices have not encouraged equally higher consumption, although consumers appreciate the lower prices.
In contrast to falling oil and gasoline prices, airfare increased significantly in November just in time for the holiday season, jumping 13.7 percent from October. Vehicle rental prices also increased in November but only slightly. Prices of used vehicles dropped while new vehicles increased. Public transit, vehicle maintenance, and car insurance experienced negligible changes.
Housing prices declined 0.3 percent from October to November. The housing price index reflects fluctuations in such areas as apartment rental prices, hotel and motel prices, and maintenance prices. November’s price decrease is reflective of lower hotel and motel prices, although they will likely increase slightly in December heading into the winter holiday season. Maintenance prices increased marginally.
Medical care decreased 0.2 percent from October to November. The drop in the medical care price index in November was driven by changes in prescription drug prices as nursing home prices, eyeglasses and eye care, hospital services, and others remained steady.
Food at home prices, which are comprised of food items purchased at the grocery store, accounted for the largest increase in the consumer price index this month and increased 0.7 percent from October to November. Fluctuations in food prices are often a result of seasonal food price changes. Prices of meat, beef, poultry, and eggs, as well as some citrus fruits and produce increased. Apple prices fell slightly while most other food prices remained steady.
Recreation prices increased 0.3 percent as a result of higher cable, satellite television, and video rental prices. Several price indices did not change from October to November, including food away from home, utilities, clothing, education and communication, and other goods and services.
“Savings at the gasoline pump continue to make consumers more confident going into the holiday season,” said Scott Anderson, Zions Bank president and CEO. “This should lead to increased holiday spending, which will be a boon to Utah’s retail economy and have positive results for consumers and businesses alike.”
Analysis and data collection for the Zions Bank CPI and the Zions Bank Consumer Attitude Index are provided by the Cicero Group. The Cicero Group is a premier market research firm based in Salt Lake City. The Zions Bank Utah Consumer Attitude Index will be released December 30, 2014.