Economic commentators have highlighted fears that the US economy is in the midst of an inflationary period throughout the second half of 2021. Due to ongoing supply issues caused by the COVID-19 epidemic, prices in a number of key consumer expenditure categories have risen. Throughout the pandemic, aggressive federal stimulus efforts have infused additional money into the economy. Wages are rising for workers, especially at the lowest end of the wage spectrum, as many businesses struggle to attract and keep workers.
These variables have resulted in inflationary conditions, in which the amount of money available in the economy exceeds the amount of products available to spend it on. As a result, consumer prices have risen faster than typical in recent months, rising 5.4 percent in September, 6.2 percent in October, and 6.9 percent in November, as assessed year-over-year from 2020 to 2021. Earlier in 2021, various economists, including the Federal Reserve of the United States, predicted that this period of inflation would be temporary and would be resolved once supply chain issues were resolved. The consensus currently is that this phase of inflation will have a long-term effect on prices, raising the cost of living for Americans, and the Federal Reserve has lately dropped the label “transitory.”
Inflation has reached alarming levels, in part because the rate of price increases is significantly faster than in recent years. The Federal Reserve usually sets monetary policy in the United States to aim for a 2% annual inflation rate, and inflation has been below that level for the majority of the decade since the last recession. However, since June 2021, the rate of year-over-year price rises has above 5% every month, and the rate of month-to-month price increases shows no signs of slowing down.
In terms of the spending categories that have been driving inflation overall, the recent inflationary period appears different from former years. Between 2010 and 2020, the most expensive items were housing and food and beverage, with rises of 25.7 percent and 21.2 percent, respectively, while transportation had a much lower 4.1 percent increase and energy had a 6.8 percent decline. However, transportation and energy have witnessed some of the most rapid rises in recent months. Supply chain concerns have impacted the transportation sector, raising the cost of new and used automobiles, while supply and demand volatility throughout the epidemic has contributed to the current surge in energy costs.
Another distinction between this period of price increases and previous years is the geographic location of price increases. Many of the regions where the cost of living increased the highest over the last decade were economically prosperous states that saw an increase in high-paying occupations and attracted more residents to their major metros, such as Washington (Seattle), Oregon (Portland), and Massachusetts (Boston). However, price rises now appear to be a statewide phenomena, and in areas where employment and income growth is slower, home expenses may account for a larger part of employees’ wages.
The data utilized in this research comes from the most recent Regional Price Parities Dataset (RPP) from the US Bureau of Economic Analysis, which was released in December 2021. Researchers at Filterbuy evaluated the percentage change in RPP between 2010 and 2020, adjusted for the US Personal Consumption Expenditures Price Index during the same time period, to discover the regions with the highest rises in living costs over the past decade. If a tie occurred, the area with the higher RPP in 2020 was given the upper hand. Regional pricing parities are used to compare price disparities among places to the national average. They’re calculated every year using a variety of commodities from the Consumer Price Index and housing data from the American Community Survey.
According to the study, the cost of living in the Winston-Salem metro area increased by 11.2 percent between 2010 and 2020. Winston-Salem has the 7th least increase in the cost of living among all midsize U.S. metros over the last decade. Here’s a rundown of the facts for Winston-Salem, North Carolina:
Cost of living change in percent (2010–2020): +11.2 percent
Overall cost of living (as a percentage of the national average): -11.0 percent
Cost of products (as a percentage of the average): -4.3%
Housing costs (as a percentage of the national average): -36.4 percent
Utility costs (in comparison to the national average): +1.0 percent
Here are some statistics for the entire United States as a point of reference:
Change in living costs as a percentage of GDP (2010–2020): +16.2 percent
Overall living costs (in comparison to the national average): N/A
Cost of products (in comparison to the national average): N/A
Housing costs (in comparison to the national average): N/A
Utility costs (in comparison to the national average): N/A