Inflation isn’t bad. Really.
Sure, gas prices have exploded recently. And trips to the grocery store inspire fear. But so-called “core” inflation -- the overall inflation rate minus volatile energy and food costs -- rose nationwide in March a moderate .5 percent from February.
The overall Consumer Price Index has risen 2.7 percent the past year, according to Friday’s Bureau of Labor Statistics release. In Atlanta, it rose 1.5 percent.
“The good news is that the core rate has doubled the last few months,” said Dorsey Farr, who advises investors for French Wolf & Farr in Buckhead. “That may sound odd, but it’s good because back in October and November the [Federal Reserve] was very worried about how close we were to outright deflation. So it’s good we’ve turned toward the other direction.”
The CPI tracks spending nationwide as well as in Atlanta and 26 other cities. It provides a cost-of-living snapshot for a “market basket” of consumer goods and services. It is also the most widely used measure of inflation.
Atlanta’s rate may be lower than the nation’s, but that’s not necessarily good news. Housing prices, for example, dipped .4 percent over the past year. Nationwide, they rose .8 percent.
While inflation overall has risen moderately, most Atlantans focus on gas and food prices and don’t like paying more month after month. But the Federal Reserve -- which impacts inflation by raising or lowering interest rates -- prefers some inflation instead of deflation, which can send the economy into a no-growth funk.
“These things put bees in peoples’ bonnets, but they don’t necessarily reflect the overall trend in prices,” Farr said. “I don’t see commodity prices going markedly higher. So we’re likely to see [inflation] drift upward a little bit more if these recent trends continue.”
Inflation in Atlanta
Percentage increase or decrease
December to February vs. a year ago
All items 1.6 (1.5)
Food and beverages 1.5 (2.3)
Housing .8 ( -.4)
Apparel 2.8 (-2.1)
Transportation 4.2 (9.4)
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