The Zions Bank Wasatch Front Consumer Price Index (CPI) increased 0.1 percent from April to May on a non-seasonally adjusted basis.
The index has increased 1.7 percent since this same time last year, which is very near the Federal Reserve’s national inflation target of 2 percent. The national Consumer Price Index increased 0.4 percent from April to May and increased 1.0 percent over the last year.
Utilities prices increased more than any other sector in May, rising 4.3 percent from the previous month as water and electricity utilities switched to higher summer rates. In spite of these increases, water rates in Utah remain low relative to those of other neighboring desert states. For example, an average household in Denver pays nearly twice as much as a Salt Lake household for water, sewer and storm water services. Similarly, Utahns pay relatively less for electricity, as the average monthly residential electricity bill in Utah is $79 compared to the national average monthly bill of $107.
Transportation prices offset the increases in prices for utilities, decreasing 2.4 percent in May in spite of rising gasoline prices as vehicle prices declined. Used vehicle prices have fallen particularly sharply in recent months due to rising supply as 2013 lease returns have started to flood the market.
The price of Brent Crude Oil, the international benchmark for oil prices, declined in the first week of May before recovering with increases through the rest of the month. Currently, futures register at about $48 per barrel compared to $64 per barrel a year ago. Gas prices in Utah are slightly higher than the national average of $2.36 per gallon, currently averaging $2.40 per gallon in the state.
Prices for food away from home increased 0.7 percent from April to May, and have increased 7.4 percent since this time last year. Food away from home prices have been pushed higher as labor costs rise and as restaurants continue to make larger investments in technology. Meanwhile, food at home prices remain relatively low. Food at home prices decreased 0.2 percent this month, and have decreased 0.3 percent since this time last year.
The housing market’s strong ongoing growth continued this month as apartment rental and hotel and motel rates rose. Housing prices increased 0.6 percent from April to May. Housing prices have increased 2.1 percent since this time last year and are expected to continue to rise through 2016. Accounting for 36.6 percent of the average Utahn’s consumption, increases in housing prices have a significant impact on the overall CPI.
Recreation prices increased 0.2 percent this month due to slightly higher rates for newspaper subscriptions. Prices for other clothing increased 1.1 percent, and prices for other goods and services increased 0.1 percent. With recreation, clothing, and other goods and services accounting for a combined 14.0 percent of a typical Utahn’s consumption, these three categories in aggregate contributed slightly to the increase in this month’s overall CPI.
Medical care prices declined 0.7 percent this month as both prescription and nonprescription drugs decreased in price. Education and communication prices decreased 0.2 percent this month as prices for personal computers and internet connectivity decreased.
“Rising rates for water remind us of the value of one of our most precious resources,” said Scott Anderson, Zions Bank’s President and CEO. “As Utah policymakers continue to find the right balance between necessary conservation measures and maintaining low prices for consumers and businesses, they are also ensuring the sustainability of Utah’s long-term economic growth.”
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.
