Inflation in Atlanta, U.S. improving, federal data shows

Housing prices in Atlanta have been climbing, but the region has benefited more than many others from aggressive new apartment construction, said Mark Vitner, chief economist at Piedmont Crescent Capital, an investment advisory firm.

“In Atlanta, we’ve seen rents go down significantly,” he said. “I think that’s the biggest variable. The largest CPI increases were in places where housing costs fell the least.

National Rent Rises were highlighted Tuesday by Jerome Powell, Chairman of the Federal Reserve, as a key factor in maintaining high inflation.

Although home prices have risen significantly over the past five years, they have stabilized since the fall, said Phil Vinson of Georgia Gwinnett College. “And we are currently building new housing in Atlanta, but not as fast as we would like.”

Inflation was also driven by various types of services, he explained. “You need contractors and barbers. You have to be a place that can attract people who work in the service industry and Atlanta is well positioned in that regard.

Atlanta has the second lowest inflation rate among the 23 largest metro areas, according to calculations by WalletHub, an online financial site. The highest inflation was recorded in Dallas, where price increases reached an annual pace of 4.9%, according to WalletHub and government data.

Prices for most products are higher than they were five years ago. Lower inflation simply means that prices rise less quickly. Over the past year, average incomes for many workers have risen faster than prices, even though rising debt means some people have fallen behind and haven’t caught up, economists say .

Since the CPI is an average, the impact on households depends on their own spending habits and whether or not they get increases.

However, food is part of every budget, and there’s some good news there.

Metro Atlanta residents have seen a dramatic deceleration in the overall price of food at home, up just 1.7% over the past year. The price of dairy products has actually fallen. But other products increased: the price of fruits and vegetables increased by 4.4% and that of cereals by 5.1% compared to last year, the government said.

Other benefits for consumers were prices for new vehicles – down 1.1% annually – and used cars and trucks, whose prices fell an average of 8.1%.

Gasoline, one of the few publicly announced prices, increased 2.6% in one year.

Inflation in Atlanta peaked in mid-2022 at an annual rate of 11.7%, evoking visions of the late 1970s and early 1980s, when it reached nearly 20% and increases in inflation Federal Reserve rates have put the brakes on the economy to bring rates down.

The Fed’s rate hikes triggered two deep but relatively brief recessions, during which the unemployment rate reached 10.8%.

This time, the Fed is aiming for a “soft landing,” in which it will cool the economy and reduce inflation without pushing the economy into the ditch. The Fed raised interest rates to their highest level in more than two decades, but so far growth has remained strong and inflation has fallen.

Powell said Tuesday that the economy “is different this time” because many Americans refinanced their mortgages at very low rates before the Fed began raising borrowing costs in March 2022. Many large companies also set low rates at that time.

“It may be,” Powell said, that the Fed’s rate policy “may not hit the economy as hard as it would have if those two things weren’t the case.”

Despite this, inflation remains consistently above the Fed’s 2% target.

The Fed has delayed expected rate cuts while keeping one eye on various price measures and the slowing labor market with the other.

Inflation may not reach the 2% target until 2026, but the effects of the Fed’s policies are not immediate, Vitner said.

“I think the rate of decline in the CPI will probably slow,” he said. “I think they could cut rates in September. They don’t need to wait for rates to drop to 2%.

–The Associated Press contributed to this story

Credit: AP

Credit: AP

Credit: AP

Credit: AP