Rents in Atlanta rose faster than any other city, according to a survey by RealPage, which provides software to real estate owners. Housing construction has struggled to keep up with the area’s population growth, as more Americans continue to move from the north to the south.
Atlanta gas prices are up an average of $1.34 a gallon, compared to a $1.29-a-gallon increase nationally, according to Gas Buddy. It wasn’t immediately clear why prices have risen faster here than nationally since last month.
The rising CPI has topped 5% in the U.S. the last five months, stoking a high-volume national debate about government policy. It is also fanning doubt that inflation is largely a result of pandemic-related problems — like bottlenecks in the global supply chain — that are likely to ebb over the next few months.
Still, much of the recent inflation is due to price hikes that could be rapidly reversed, according to data collected by the Federal Reserve Bank of Atlanta. Among prices of items or services that can quickly change direction, there has been a 15.8% increase, according to the Atlanta Fed.
For example, much of the ascent in gasoline prices is a hangover from the depths of the pandemic when consumers were using much less gas and oil companies slashed production. Now, demand has surged and producers have not caught up. If they do, prices can fall as fast as the gas stations can change their signs.
In contrast, the prices that tend to influence company and consumer behavior are the ones that are not likely to reverse. And among those “sticky” prices, there is an increase of just 3.2%.
“Those findings are good news,” said economist Caroline Fohlin of Emory University. “That suggests that we have less to worry about in the next year.”
Moreover, inflation is not a one-sided story, since higher prices create both winners and losers across the economy, she said.
Lenders typically hate inflation, because it favors borrowers, at least those paying loans based on fixed rates, she said. That’s because the value of dollars used to pay back many mortgages, auto and student loans is decreasing.
On the other hand, anyone whose income is fixed is likely paying a greater share of it to cover necessities, Fohlin said. “Poor people spend almost all of their income on necessities — food, shelter, transport — so they get hit the hardest by inflation.”
Softening that blow is a general rise in wages, especially among lower-wage workers. According to the Atlanta Fed’s wage tracker, pay is up an average of 4.2% nationally. And for people who switch jobs, wages are up 5.4%.
With the economy growing, many large companies — especially those with little competition — have been passing along the price hikes to their customers. But not everyone can do that, Fohlin said. “Small business is likely harder hit due to their lower market power.”
As high as Atlanta’s current inflation rate is, it is far lower than in 1974, when the economy was staggered by rocketing oil prices and inflation here was 11.4%. A few years after that, inflation hit 14.1%.
The record for inflation came just after World War II, when millions of troops were returning to the economy, consumers were demanding goods again and inflation was nearly 15%.
Metro Atlanta, Consumer Price Index, year over year
Oct. 2016: 2.4%
Oct. 2017: 3.2%
Oct. 2018: 1.6%
Oct. 2019: 3.0%
Oct. 2020: 1.2%
Oct. 2021: 7.9%
Metro Consumer Price Index, year over year
St. Louis: 7.5%
U.S. average: 6.2%
Source: Bureau of Labor Statistics
Metro Atlanta consumer price increases, past 12 months
Source: Bureau of Labor Statistics