Houston inflation continues to rise

The Consumer Price Index for All Urban Consumers (CPI-U) continued its historic rise in the two months ending in December 2021, increasing another 0.7% in the Houston-The Woodlands-Sugar Land area. The numbers calculated by the Bureau of Labor Statistics were influenced by higher prices for all items except food and energy.

Regional Commissioner Michael Hirniak, according to a release, said the December increase was influenced by higher prices for all items except food and energy, but an advance in the food index also contributed.

The CPI-U advanced 6.6% over the last 12 months, the largest rise since October 1990. Removing the rising costs of food and energy and the index rose 4.9% over the year. Energy prices alone ballooned 30.5%, while food prices increase 5.2%.

Prices for food at home outstripped the overall increase, with prices increasing 6.3% driven primarily by price increases for meats, poultry, fish and eggs.

The energy index, actually decreased 1.8% for the two months ending in December. The decrease was almost entirely due to lower prices for electricity (-4.2%), although prices for gasoline decreased 0.4%. The prices for natural gas services were unchanged for the same period. The latest index only put a dent in the year-long increase in energy prices caused mainly by the 58.9% rise in gasoline prices. Prices paid for electricity advanced 7.9%, and prices for natural gas service jumped 16.4% during the past year.

The index for all items less food and energy advanced 1.0% in November and December after rising 0.5% in September and October, according to the report. Higher prices for shelter (+0.9%), used cars and trucks (+6.0%) and household furnishings and operations (+2.3%) were the largest contributors to the rise.

Area indexes do not measure differences in the level of prices between cities. They only measure the average change in prices for each area since the base period. The Houston-The Woodlands-Sugar Land, Texas, Core Based Statistical Area includes the counties of Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller.

Over the year, the index for all items less food and energy increased 4.9%, the largest rise since August 1994. Higher prices for used cars and trucks (+36.3%) and new vehicles (+12.4%) fueled the surge, while household furnishings and operations (+12.3%) and shelter (+1.9%) also increased.