Fri, Dec 16, 2022 1:00 PM
By Merrilee Gasser, The Center Square
Amidst 40-year high inflation rates, Honolulu is experiencing a decrease, a new report found.
In personal finance website WalletHub’s report "Cities Where Inflation is Rising the Most," Honolulu showed a Consumer Price Index change of -0.6% over the last two months. Its change compared to a year ago versus the latest month available still shows an increase of 5.8%, according to the report.
Some cities are experiencing inflation worse than the national year-over-inflation rate of 7.1%.
The report compared 23 major metropolitan statistical areas across two key measures related to the Consumer Price Index.
Phoenix, Mesa, and Scottsdale in Arizona are experiencing the highest rate of inflation at just over 12% compared to a year ago. The change in Florida’s Consumer Price Index for Miami, Fort Lauderdale, and West Palm Beach over the past year was 10.10%, the report found.
Only six of the 23 areas evaluated showed small decreases in inflation rates over the last two months, including Honolulu. All areas evaluated saw increases compared to a year ago, according to the report.
The U.S. Federal Reserve announced another rate hike of half a percentage point this week in another attempt to tackle inflation.
“Raising interest rates is a textbook solution to control inflation and most importantly, it helps to stabilize inflation expectations in the mid to long run, which has already been observed in the recent May and June data on inflation expectations,” said Liang Wang, an economics professor at the University of Hawaii at Manoa.
Wang said some of the “extensive quantitative measures” the Fed has taken in the last decade has played a big role in the current inflation problems. While government officials have repeatedly cast blame on the war in Ukraine and supply chain problems, trillions in federal spending during COVID-19 also set the stage for the inflation Americans are currently experiencing.
Wang said he feels optimistic about the U.S. economy if timely measures are used to stabilize consumer expectations.
“After all, we have not seen any abrupt, imminent, and detrimental factors that will freeze the economy such as the 2008 financial crisis or covid-19. If a recession was coming, it would be slow and gradual,” Wang said.