Prices in the Southeast are starting to rise more rapidly than prices elsewhere, after several months of declining more rapidly. The U.S. consumer price index, or CPI, rose 0.1 % last month, the Bureau of Labor Statistics reported this week. The CPI in the Southeast rose 0.2 %, which is a small but significant difference. The CPI is a widely used measure of inflation. Inflation in both the Southeast and in the U.S. as a whole is still down slightly from last year.
The recent price increases in the Southeast are driven by increases in apparel and transportation prices. Prices in the apparel industry rose 1.2 % in October, and prices in the transportation industry rose 1.4 %.
A few areas are experiencing high inflation in the Southeast even though the overall inflation level is quite low. The prices in the category of other goods and services, which includes tobacco and smoking products and personal care products, rose 9.8 % since last year. Education and communication rose 2.6 %, and prices in the medical care industry have risen 2.9 %. The price of new and used cars rose 1.4 % last month, the biggest one-month increase in 28 years. The price increases are largely due to the cash-for-clunker program expiring.
Inflation in these industries has been offset by deflation in the fuel and the housing industries. The slow recovery of the housing industry will likely keep inflation low. However, the increase in the money supply of 15.5 % since last year could cause concerns about inflation once the housing industry begins to recover.