Which US regions have the highest inflation rates?

Inflation — the overall increase in the prices of goods and services in an economy — has been a consistent part of the national economic conversation over the past three years, as rates rose to levels not seen for decades.

Several indicators capture the causes and impacts of inflation, but one of the primary indicators is the Consumer Price Index (CPI), produced by the Bureau of Labor Statistics (BLS). The CPI, a detailed monthly measure of the change in prices for more than 200 goods and services, provides a weighted assessment of prices Americans pay across hundreds of categories.

The national inflation rate in the US, as measured by year-over-year change in the CPI, spiked last summer at 8.9%. While the national inflation rate in June 2023 was the lowest recorded since March 2021, national prices remain 3.2% higher year-over-year, after adjusting for predictable seasonal impacts on inflation.

Inflation rates often fluctuate across different categories of spending, depending on their inherent volatility. For example, in June 2023, energy costs declined while food costs increased. But Americans also experience inflation differently depending on several non-spending-related factors — including where they live.

Which regions of the country have been most impacted by inflation?

In addition to its national assessment, BLS also monitors how the CPI fluctuates in different areas of the country. The agency reviews the changes in CPI across the nine regional divisions as defined by the Census (but does not provide data on a state-by-state basis). This data helps illustrate how various parts of the country experience inflation differently.

Over the past year, the East South Central region, encompassing Alabama, Kentucky, Mississippi, and Tennessee, recorded the highest annual increase in consumer prices (4.2%); the neighboring South Atlantic region’s four states recorded the second-highest increase (3.9%). The West North Central region — including the seven midwestern states — recorded an annual CPI increase of 3.8% since compared to last October. On the other hand, the New England region’s six states collectively recorded a 2% increase in their CPI over the past year.

What cities have been most impacted by inflation?

Various macroeconomic factors such as overall cost of living and housing markets — particularly in areas where people are migrating in greater numbers — can impact how much people in different cities pay for things.

The Bureau of Labor Statistics provides inflation estimates for 23 metropolitan areas. Recently, consumer prices in these areas have increased by as much as 7.4%, as seen in Miami between October 2022 and October 2023.

The rate of price increases has been closer to what the Federal Reserve considers its target inflation rate of 2% in places like Minneapolis, urban Hawaii, Baltimore, Chicago and Los Angeles.

What this data says about inflation across the country

There is no single way that Americans experience inflation. Differences between locations as discussed above are just one factor to consider; there are many others, such as people’s age and household income, that contribute to the complexity of assessing inflation in the US, as well as the proposed solutions for managing it.

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