Tampa Bay Area shows resilience to inflation, ranks lowest in impact among major U.S. cities

by | Jun 12, 2024

The Tampa-St. Petersburg-Clearwater area is showing resilience to inflation, ranking last among major U.S. metropolitan areas for inflation impact, with a slight CPI decrease over the past two months and a diverse economy cushioning inflation’s effects.

The Tampa-St. Petersburg-Clearwater area, is showing resilience to inflation, according to a recent WalletHub analysis, as the region ranked last among 23 major Metropolitan Statistical Areas (MSAs) for inflation impact over the past two months.

In May 2024, Tampa’s Consumer Price Index (CPI) showed a slight decrease of 0.10 percent compared to two months prior and an increase of 1.80 percent over the past year, a figure markedly  lower than the national year-over-year inflation rate of 3.3 percent.

Tampa’s diverse economy, which includes finance, healthcare, tourism, and technology sectors, has helped cushion the impact of inflation, according to the report. The city has also maintained a relatively moderate cost of living, mitigating inflation’s effects on residents and businesses.

“Inflation has slowed, largely due to a combination of higher price levels, which have reduced the real value of government bonds, and higher interest rates from the Fed,” said Eric Leeper, a Professor of Economics at the University of Virginia within the report. ”

The recorded resilience stands in contrast to previous reports identifying the region as a boon for rising costs. In October 2023, Tampa was identified as one of the top inflation hotspots in the nation, with a 6.7 percent increase in CPI over the previous year. The increases were largely driven by rapid population growth and rising housing costs.

Despite Tampa’s success, WalletHub notes that national and global economic challenges persist, and supply chain disruptions alongside geopolitical tensions, such as the war in Ukraine, continue to exert upward pressure on prices.

On a broader scale, U.S. inflation fell to 3.3 percent in May, slightly below expectations, providing a boost to markets and raising the likelihood of Federal Reserve interest rate cuts before the presidential election. Despite remaining above the target rate of 2 percent, the drop in inflation led to record highs for U.S. stocks and a decrease in Treasury yields.

Traders now see an 84 percent chance of a rate cut by September. Core CPI, which excludes food and energy, rose 3.4 percent. Month-on-month, headline inflation was unchanged, while core inflation edged up 0.2 percent.

“Prices are still too high, but today’s report shows welcome progress on lowering inflation, which was zero on a monthly basis in May and is down nearly two-thirds from its peak,” President Joe Biden said on Wednesday morning. “Core inflation is at its lowest level since April 2021, grocery prices have fallen for four months in a row, and gas prices are below $3.50 on average across the country.”


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