Inflation in metro Atlanta cooled slightly in the past two months, although the rate of increase — like the national average — remains above the Federal Reserve’s target, according to government statistics released Tuesday.
The consumer price index (CPI), calculated from a weighted series of commodities and services, was up 3.3% from a year ago for the region, according to the Bureau of Labor Statistics.
Atlanta’s CPI measure was an improvement from December, when its yearly inflation had been 3.6%. That had been an increase from 3.2% in October, which spurred concerns about a reversal in inflation’s general downward trend.
An easing in prices of services has been key, said analyst Gargi Chaudhuri of BlackRock, financial and investment adviser, in an email. “February’s core CPI suggests that January’s hot print was a deviation from the longer-term disinflationary trend.”
Atlanta’s inflation rate peaked at 11.7% in mid-2022, significantly higher than the national average. However, as prices slid lower, Atlanta’s inflation rate has more frequently been similar to that of the overall United States.
The national average for February was 3.2%, according to the BLS.
“Early in the pandemic, we saw more housing inflation in Georgia than we saw in other parts of the country,” said economist Daniel Hornung, a member of the White House National Economic Council. “But now we are seeing how it’s come down more quickly there. There’s been significant new construction around Atlanta.”
While rents have largely leveled off or even declined, home prices and mortgage payments have risen. Over the year, costs of shelter in metro Atlanta’s inflation calculation are still up 6.1%, according to the BLS.
The Federal Reserve aggressively lifted its benchmark interest rate in an effort to tame inflation. Those higher interest rates add to costs for borrowers, including for businesses or those taking out auto loans and mortgages, as well as using credit cards. Tighter monetary policy should temper economic activity and help rein in prices, and the Fed has said repeatedly it is aiming at a 2% annual rate of inflation.
But Fed officials have said they are reluctant to lower interest rates until they are convinced that the target is in sight.
Inflation dropped convincingly for more than a year, raising hopes that the Fed would soon start cutting interest rates. But trimming price growth down to 2% has proven difficult. Wells Fargo economists said in an online post Tuesday they now expect the first cut will not come until summer.
The economy overall has sped forward despite the high rates, churning out jobs.
And while few paychecks kept up with inflation during late 2021 and 2022, for most of the past year, the average raise has been higher than inflation, according to the Atlanta Fed Wage Tracker.
Still, some households fell behind when inflation spiked and have not recovered. One sign of that struggle is the rate of delinquencies on auto loans which has jumped to its highest level since 2011, according to the Federal Reserve Bank of New York.
And while grocery food prices are 2.6% higher on average than they were a year ago, many items are dramatically more expensive than they were pre-pandemic.
Metro Atlanta prices, compared to year ago
Overall average: 3.3%
All food: 3.9%
-- Groceries: 2.6%
-- Cereal: -2.0%
-- Meat: 4.2%
-- Dairy: -4.4%
-- Fruits and vegetables: 3.5%
-- Dining out: 5.9%
Energy: 3.6%
-- Electricity: 14.0%
-- Gasoline: -4.0%
Shelter: 6.1%
Apparel: 0.4%
Tuition, child care: 4.2%
Household furnishings: -2.4%
Source: Bureau of Labor Statistics
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