The inflation rate in the Bay Area as measured by consumer prices rose at a faster pace in April compared with the last several months, a disquieting sign that the bouts of elevated costs have yet to run their course.
Costs for electricity and natural gas delivered by utility behemoths such as PG&E soared skyward, the federal government reported Wednesday.
Consumer prices hopped higher by 3.8% in the Bay Area in April compared with the same month the year before, according to the report from the U.S. Bureau of Labor Statistics.
The Bay Area’s annual inflation rate of 3.8% as reported by the federal labor agency was well above the year-to-year readings for the closely watched consumer price index for the region in recent months.
Over six months going back to last October 2023, annual inflation had been averaging about 2.6%.
The last time the region’s yearly consumer price index had topped 3% was in August 2023.
In February, the Bay Area inflation rate rose by just 2.4% on a yearly basis.
The nationwide consumer price index rose 3.4% in April, an indication that inflation is running hotter in the Bay Area than it is in the United States overall.
Despite the faster pace of price increases, the current inflation rate in the Bay Area is far less than it was in June 2022, when the region’s consumer prices jumped by a brutally high 6.8%.
The cost of electricity and natural gas supplied to consumers by a utility company such as PG&E both rose far faster than the overall inflation rate in the Bay Area.
Electricity costs soared by 24.4% in April compared with the year before, the new report shows. For more than a year, PG&E monthly bills have been rising far faster than the overall inflation rate in the Bay Area.
Utility-supplied natural gas expenses jumped 14.4% on an annualized basis in April. Natural gas is now becoming more far expensive after a few months of yearly price declines that occurred in the winter.
Gasoline is again becoming more expensive. Prices for regular unleaded gasoline zoomed higher by 12.3% in April compared with the same month the year before.
Food prices rose at less than the overall inflation rate, although food consumed away from home at places such as restaurants rose at a much faster pace than food consumed at home.
Here are examples of how prices have changed for some categories of food have changed over the most recent one-year period ending in April:
— Cereals and bakery products, up 4.1%
— Dairy products, up 3%
— Meat, poultry, fish and eggs, up 1.3%
— Fruits and vegetables, down 0.3%
Over the one year ending in April, food consumed at home rose in price by 2.5% in the Bay Area.
The cost of food consumed away from home jumped 4.4% in the region during the last 12 months.
The Federal Reserve has kept interest rates at elevated levels as a way to curb the sharp rise in consumer prices.
However, the most recent government reports suggest that the Central Bank has yet to tame inflation in any meaningful way, in the view of Brian Wesbury, chief economist with First Trust Advisors, an Illinois-based investment firm.
“It looks clear that the progress against inflation made from mid-2022 to mid-2023 has stalled,” Wesbury wrote in a research note that he co-wrote with First Trust Advisors deputy chief economist Robert Stein.
Federal Reserve officials have hinted that the Central Bank might be able to start reducing interest rates sometime this year. Wesbury suggested that this hope might prove elusive.
“Baseline inflation has remained stubbornly sticky above 3%, casting doubt on the Fed’s ability to cut rates in 2024,” Wesbury wrote in the research note.