Today’s entry: Is there any way to know how high SFL’s inflation rate is?
Bottom Line: Yes, and you're liable to be surprised. The Government’s Bureau of Labor Statistics creates monthly regional reports that are part of the overall calculation for the national Consumer Price Index, which is the inflation rate that’s commonly reported. South Florida’s CPI includes the entire tri-county as it tracks the Miami-Fort Lauderdale-West Palm Beach metros. I mentioned you might be surprised... Let’s see if I’m right. If I asked you if you thought South Florida’s inflation rate was higher, lower, or in line with the national average what would you guess? If you said lower, you’re right.
According to the most recent Consumer Price Index the real inflation rate, the cost increase year over year for all goods, has averaged 4.2%. While high, it’s significantly below the 5.3% rate nationally. So, believe it or not, we’re a lot better off than most. The highest increases in cost in South Florida have come from a couple of likely sources. Energy and housing. Energy costs have risen by an average of 7.2% in South Florida this year with housing costs has risen by an average of 6%. The reason Florida’s overall inflation rate isn’t higher and is below the national average is due to food costs. While many individual products may be more expensive than a year ago, the overall cost of food is actually lower than this time a year ago in South Florida. The reason why even below-average inflation is proving to be as challenging as it is for South Floridians is due to our already above-average cost of living.
The cost of living in South Florida is well above the state average which is already above the national average. The average cost of living in Florida is 2.8% more expensive than the country as a whole. That balloons to 23.1% above the national average. Our relatively high cost of living is driven by housing, which is 42.7% above the national average, and transportation costs which are 44.5% above the national average. What all of this means is that a dollar already only goes 77% as far in South Florida as it does anywhere in the USA. Add 4%+ inflation to the mix and it likely feels much worse than it is because many South Floridians are already stretched ordinarily. Incidentally, there are two categories where we have below-average healthcare and utility costs, so those are silver linings to our otherwise expensive lifestyles.
In yesterday’s Q&A, I talked about the potential for still higher inflation coming through a devaluing of the dollar and still more artificial demand should the so-called infrastructure packages pass in Congress. It disproportionately would hurt South Floridians because of our already above-average cost of living. The single best thing that could happen to help reduce the impact of inflation would be nothing in Washington.
If you’d like to try to make a difference, it’s a good time to contact your Congressional representative in the House and tell them to oppose the passage of both “infrastructure” packages in Congress. It’s not just that we can’t afford all of the additional spendings, it’s that the additional spending would make everything else that we’re already struggling to afford even less affordable.
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