Inflation in the Atlanta area continues to outpace the nation, rising 9.8% in 2021

 Calendar year increase largest since beginning of local series in 1998

Consumer prices in the Atlanta area rose 1.9 percent for the two months ending in December 2021, according to new information released by the U.S. Bureau of Labor Statistics. The two-month increase rose at twice the pace of the nation, which posted a 0.8 percent increase.

For the 12 months ending in December 2021, consumer prices in the Atlanta area increased 9.8 percent, the largest calendar year increase since BLS began posting calendar year data for the Atlanta area in 1998. Nationally, consumer prices rose 7.0 percent over the year.

Index components

Food prices in the Atlanta area increased 0.9 percent over the past two months, moving up 2.6 percent over the year.

Consumer prices for energy rose 2.2 percent over the two-month period, increasing 28.6 percent since last December.

All items excluding food and energy increased 2.0 percent over the two months and rose 9.3 percent over the 12 months ending in December, the largest increase for that index since 1998.

Housing costs rose 1.8 percent over two months, as rental costs increased 1.6 percent and owners’ equivalent of residential rent moved up 1.7 percent. For 2021, housing costs in the Atlanta are rose 7.4 percent as rental costs increased 8.1 percent and owners’ equivalent of residential rent moved up 7.5 percent.

Consumer costs for gasoline increased 1.5 percent over two months. For 2021, costs for gasoline in the Atlanta area increased 55.7 percent.

Impact on consumers

For Atlanta area consumers, increases in prices without a corresponding increase in the value of the items being bought causes a drain on consumer finances. Various items in the Consumer Price Index for All Urban Consumers in the Atlanta metropolitan area (CPI-U, Atlanta) have different impacts depending on what percentage of their budget is devoted to each item.

For example, food represents approximately 15 percent of the average Atlanta area consumers’ purchases with 8.7 percent going to food at home and 6.3 percent to food away from home.

Housing costs including rent or mortgage, as well as utilities, represent 35.7 percent of the average household’s budget.

Transportation costs amount to 13.9 percent of the budget for the average household.

Atlanta inflation rate increases but not yet above trendline

The Consumer Price Index for All Urban Consumers in Atlanta-Sandy Springs-Roswell, Ga., increased 1.6 percent from February to April, the U.S. Bureau of Labor Statistics reported today. The index for food declined 0.2 percent, while the energy index increased 6.6 percent. The index for all items less food and energy rose 1.6 percent from February to April.

For the 12 months ending in April, the CPI-U for All Items increased 6.0 percent. The index for food declined 0.2 percent over the past 12 months, while the energy index rose 30.0 percent. The index for all items less food and energy increased 5.0 percent.

Considering inflation rates over a 24-month period

While the most recent 12-month increases appear to be large, they come a year after the economy suffered a sharp setback as consumers changed their buying habits and companies saw drop-offs in their business. These resulted in some significant slowdowns in the rate of increase for some inflation measures, while other indexes actually declined over the year. For example, the CPI-U for All Urban Consumers in Atlanta-Sandy Springs-Roswell, Ga., declined 0.3 percent from April 2019 to April 2020.

Because of the sharp slowdown in the economy in 2020, there is good reason to consider inflation not over the past 12 months, but over the past 24 months. In that context, the current inflation rate is in line with inflation in some prior years.

From April 2019 to April 2021, the Consumer Price Index for All Urban Consumers in Atlanta-Sandy Springs-Roswell, Ga., increased 5.6 percent compared to inflation rates of 5.4 percent from 2017 to 2019 and 5.2 percent from 2015 to 2017.

The index for all items less food and energy increased 6.2 percent from 2019 to 2021 compared to inflation rates of 5.1 percent from 2017 to 2019 and 6.9 percent from 2015 to 2017.

Conclusion

While the percentage change over the most recent 12 months may seem to imply higher rates of inflation in the future, once the impact of lower price inflation in 2020 is taken into account, the inflation rates over the most recent 24 months seem in line with past experiences as the economy recovered from the 2007-2009 recession.

Economists will have to wait until later in 2020 to see if retail prices continue to increase at the current rate, accelerate, or actually moderate as the economy recovers from the 2020 downturn.

Georgia Labor Day 2020 by the Numbers

Georgia Private Sector Nonfarm Jobs, January 2019 - July 2020

Statewide employment 

Number of private sector nonfarm jobs in Georgia in July 2020: 3,734.000 

Number of private sector nonfarm jobs in Georgia in July 2019: 3,922,300 

Change from a year ago: - 188,300

 

Number of public sector jobs in Georgia in July 2020: 657,700 

Number of public sector jobs in Georgia in July 2019: 664,600 

Change from a year ago: - 6,900 

Statewide unemployment 

Initial claims 

Number of people filing for Georgia unemployment insurance benefits in the week ending August 22, 2020: 56,758 

Number of initial claims for the same week in 2019: 4,440 

Change from a year ago: + 52,318 

Insured unemployment 

Number of people receiving Georgia unemployment benefits in the week ending August 15, 2020: 553,713 

Number of people receiving benefits for the same week in 2019: 25,549 

Change from a year ago: + 528,164

 

Statewide costs for unemployment insurance benefits 

Amount of regular Georgia UI benefits paid in the past 24 weeks: + $3 billion 

Amount paid in the previous 7 years combined: $2.852 billion

 

Georgia metro areas private sector nonfarm jobs

(As of July 2020 / Change from July 2019)

Albany: 48,200 / - 2,400 

Athens-Clarke County: 67,100 / - 1,500 

Atlanta metro area (Atlanta-Sandy Springs-Roswell): 2,381.800 / - 134,800 

Augusta-Richmond County, GA-SC: 182,800 / - 13,500 

Brunswick: 30,200 / -6,400 

Columbus, GA-AL: 93,000 / - 5,300 

Dalton: 55,600 / - 3,800 

Gainesville: 79,800 / - 3,000 

Hinesville: 13,400 / + 200 

Macon-Bibb County: 83,600 / -5,100 

Rome: 35,900 / - 300 

Savannah: 152,200 / - 10,300 

Valdosta: 42,900 / - 400 

Warner Robins: 44,600 / - 5,100

 

Inflation in the Atlanta metro area (Atlanta-Sandy Springs-Roswell)

(Percentage change in retail prices for the 12 months ending in June 2020)

All Items: + 0.9% 

Food: + 4.3% 

Housing: + 2.3% 

Electricity: - 14.3%               

New vehicle: + 2.4% 

Used cars and trucks: - 1.9%

 Gasoline: - 25.4%