After topping the nation for inflation, Phoenix is experiencing a cooldown

A cooling housing market and overall lower gas prices are helping starve off inflation that hit 13% last year in Arizona's largest city. Sarah Robinson reports.
Published: Sep. 26, 2023 at 10:38 AM MST
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PHOENIX (3TV/CBS 5) -- Last year, the United States saw the highest spike in inflation in nearly four decades, which was a significant burden for many households, putting a strain on individual and families’ financial planning.

Phoenix topped the charts for any U.S. city, with local inflation peaking at 13%, which was 3.5 times that of the national average. Inflation here spiked rapidly due to a scorching housing market. More people moved to Maricopa County than any other U.S. metro last year.

Since the Federal Reserve raised interest rates, the housing market has cooled substantially, which helped to bring inflation down. Now, the Valley is seeing inflation at 3%, holding steady with the country’s falling average.

The Fed’s target rate is 2%; but it’s unclear how soon that number could be reached. Although falling inflation means your dollar goes farther, experts say it’s hard to forecast how much you can save, and trends can change on a whim.

“I’ll caution that the last month of data we have recorded, which is July, shows the first real slip in incomes in quite a while. That was driven by a cooling labor market. So we are seeing a dip in labor demand from businesses and a bump in labor supply,” said Jackie Benson, an economist with Wells Fargo.

It’s important to note prices remain high. However, the soaring prices at the pump are unrelated to inflation. Gas prices typically drop in the fall but are up nationwide due to oil cuts and flooding in Libya.

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