Price hikes hit Southern California where it hurts

Forget all the chatter about what the latest Consumer Price Index dip might mean.

Ignore the high-profile sticker shock for furniture, used cars or plane tickets.

Simply put, 2022’s inflation hurts so badly because it has bloated the cost of everyday expenses that can’t easily be substituted or put off. You can clean the couch instead of replacing it. Or drive the ol’ beater one more year. Or skip the vacation.

The big reason checkbook balances are shrinking across Southern California is that the price of everyday sustenance continues to explode.

Here are 36 reasons why California’s so darn expensive

The mess inflation made of your household budget has yet to be cured, no matter the small decline in August’s inflation index. Plus or minus a percentage point or two, this is still the worst bout of inflation in four decades.

The broad yardstick of consumer prices for Los Angeles and Orange counties showed the cost of living was up 7.6% in the year ending in August. Yes, that’s a modest improvement from June’s 8.6% — a high last witnessed in 1982. The Inland Empire’s inflation rate was 9.2% in July, the last data available, down from 10% in March. And national inflation was 8.3% in August, down from its 40-year high of 9.1% in June.

Yet focus on where the real pain lies. Consider what my trusty spreadsheet found within four slices of local CPIs reflecting essential spending by families in August.

At the market

Let me start with what August’s CPI report told us about the cost of food you eat at home.

Grocery shopping in L.A.-O.C. cost 12% more this August vs. a year earlier. And to think you might have been miffed in 2021 when grocery inflation averaged only 4.6% a year.

Supermarket trips are a tad worse in the Inland Empire, with food at home costs inflating 12.6%, a high this year and painfully above last year’s 5% jump.

Then think of folks elsewhere. Grocery prices run 13.5% above August 2021 nationally — almost quadruple last year’s 3.5% rise.

The monthly rent check

Once the grocery bills are paid, there’s rent. Yes, many of you are lucky to own your home. But it’s one measure of the cost of shelter — and the economic impact of inflation.

The pandemic changed how people thought about their living arrangements, upping demand for rental units.

The CPI’s survey shows August’s rent spending in the Inland Empire up 8.7% in a year. For all of 2021, the monthly check only grew by 3.2%.

Rent hikes are somewhat less painful in L.A.-O.C. where landlords upped costs at a 4.9% annual pace in August — but that’s 2022’s high. That’s four times the 1.2% average increase in 2021.

And this isn’t just a byproduct of Southern California’s often-crazed real estate market. National rents are up 6.7% in a year — the 2022 high and triple last year’s 2.2% rise.

Zapped by electricity

So you’ve got pricier food and rent. You’d probably need to turn on the lights and power some electronics.

The checkbook winces again. Electricity prices have soared as the economic rebound — not to mention an awfully hot planet — has created record needs for power. And, yes, fuel is a big part of this pricing formula.

That’s why electricity costs in the Inland Empire are up 15.5% over 12 months — and sadly that’s the second-best report in a year with a 24% peak. And that followed last year’s 17.5% jump.

L.A.-O.C. power is up by only 10.4% — off the year’s 19.7% high and last year’s 12.5% increase.

This is no regional outlier. U.S. consumers’ electricity costs are up 15.8% — more than triple last year’s 4.3% rise.

Natural gas heats up

You’ll want to cook that expensive food. Or run the gas dryer or eventually heat your home.

Like most fuels, the cost of natural gas has soared. In fact, it’s jumped more than most energy sources.

Gas utility bills are up 31% in L.A.-O.C. and that’s only the third-worst for the year, down from 2022’s 39% peak. That follows last year’s 14.7% increase.

Inland Empire? Up 29% and off a 37% year’s high but double last year’s 14.2% jump. And nationally, natural gas is 33% pricier than August 2021.

Hope at the pump?

One underlying force behind inflation’s surge has been the huge upswing in gasoline prices.

Oddly, less pain at the pump is August’s “good news” — a dip that could significantly ease transportation costs for consumers and corporations alike in coming months. Just ponder what the CPI tells us about gasoline.

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The CPI says filling the tank in L.A.-O.C. is 23% pricier since August 2021. But that’s “good news” because it’s the lowest inflation rate for gasoline in 2022— off the year’s 51% high. Of course, this smaller gain is on top of the 30% increase seen last year.

It’s no different in the Inland Empire — the same gasoline inflation, off from similar highs and 2021 jumps. Nationally, gasoline is 26% pricier in a year.

That’s what improved inflation looks like in August 2022. Did anyone notice?

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com