CA Cities Where Inflation Is Rising Most, Least

ACROSS CALIFORNIA — While one California metro area was among the top 10 places in the United States where inflation is rising the most, another Golden State metro area was among the cities where it has risen the least, according to findings released Wednesday by WalletHub.

The personal-finance website's report on the U.S. Cities Where Inflation is Rising the Mostcompared 23 major Metropolitan Statistical Areas — MSAs — across two key metrics involving the Consumer Price Index, which measures inflation.

"Americans are still dealing with sky-high inflation, which hit a 40-year high last year," the report's authors wrote. "Though inflation has started to slow slightly due to factors like the Federal Reserve rate hikes, the year-over-year inflation rate was still a whopping 4.9% in April."

To get a snapshot of how inflation has changed in the short term and long term in each of the metro areas, WalletHub compared the Consumer Price Index for the latest month for which BLS (Bureau of Labor Statistics) data was available with the statistics from two months prior and one year prior.

Here are the report's findings.

U.S. Cities Where Inflation Is Rising the Most

1. Miami, Florida

2. Detroit, Michigan

3. Phoenix, Arizona

4. Tampa, Florida

5. Seattle, Washington

U.S. Cities Where Inflation Is Rising the Least

19. Honolulu, Hawaii

20. Philadelphia, Pennsylvania

21. Riverside, California

22. Minneapolis, Minnesota

23. New York, New York

Inflation In California

Among California cities, the study found that inflation was rising the most in the San Diego-Carlsbad metro area, while it was rising the least in the Riverside-San Bernardino-Ontario metro area.

There are four MSAs in California; here is how they fared on the inflation rankings.

San Diego-Carlsbad metro area

• Overall rank No. 9
• Overall score 42.45
• Consumer Price Index change (latest month versus 2 months before) 1 percent
• Consumer Price Index change (latest month versus 1 year ago) 5.30 percent

Los Angeles-Long Beach-Anaheim metro area

• Overall rank No. 14
• Overall score 24.98
• Consumer Price Index change (latest month versus 2 months before) .80 percent
• Consumer Price Index change (latest month versus 1 year ago) 3.80 percent

San Francisco-Oakland-Hayward metro area

• Overall rank No. 17
• Overall score 18.85
• Consumer Price Index change (latest month versus 2 months before) .40 percent
• Consumer Price Index change (latest month versus 1 year ago) 4.20 percent

Riverside-San Bernardino-Ontario metro area

• Overall rank No. 21
• Overall score 12.71
• Consumer Price Index change (latest month versus 2 months before) 0.00 percent
• Consumer Price Index change (latest month versus 1 year ago) 4.60 percent

What The Experts Had To Say

What are the main factors currently driving inflation?

According to commentary provided to WalletHub by Robert Hockett, a professor at Cornell University, the initial cause was the presence of acute supply shortages owing to decades of offshoring production followed by pandemic-wrought supply chain disruptions.

"These grew especially problematic as more people stayed home during the first 18 months of the pandemic, raising demand for home products and appliances we were no longer producing but instead importing from China and elsewhere," Hockett said. "The Russian invasion of Ukraine then worsened this by raising food and fuel prices. At this point the main driver appears to be opportunistic price-gouging by firms acting under cover of the aforementioned causes, hoping we will keep blaming price rises on the war and other supply chain disruptions. The fact that corporate profit margins are the highest on record, combined with CEO shareholder calls in which corporate executives are boasting about how they are using prior price rises as cover for further price hikes, lends further credence to this prospect."

Another expert who provided commentary, Karen Kunz, an associate professor at West Virginia University, said the unexpected severity and persistence of supply-chain delays continue to impact inflation. The war in Ukraine has impacted that as well and demand has not diminished, Kunz said.

"More jobs were created in the last couple of years than in the previous administration: low unemployment and rising wages have kept demand strong," Kunz said. "Strong demand for fewer goods is the basic recipe for higher prices."

What does the current inflation rate tell us about the future of the economy?

"Traditionally, high inflation brings with it fears of recession as borrowing costs drag the economy down," Kunz said. "Unemployment increases and demand decreases as consumers are no longer able to afford to spend as much. That's beginning to peek through now, as spending is starting to slow and layoffs increase, and reports of corporate earnings are often not as robust as analysts expect. However, high inflation does not always lead to recession. In 2006 inflation got as high as 4.7% but was not followed by a recession (the 2008-9 crash was a stock market/housing market greed-related event)."

Is raising interest rates a good or bad solution to control inflation?

"It is exceedingly BAD for the present inflation," Hockett said. "Rate hikes operate by causing unemployment, and lowering demand in the macroeconomy. But the present inflation is more saliently supply- than demand-rooted. You can see this in the numbers. Prices are rising more rapidly than wages and salaries while rising more slowly than profits. One need not be Jacob Bernoulli or any other renowned statistician to understand that when one indicator leads and another indicator lags, it is the former indicator that operates as a cause rather than an effect. In this case that's profits."