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Thursday, July 19, 2012 - Page updated at 06:00 p.m.
Seattle's inflation rate steeper than nation's in June
By Karl Baker
Seattle Times business reporter
A Bureau of Labor Statistics report, released Tuesday, showed that the increasing costs of housing and gasoline in the past year helped to make Seattle's inflation rate in June more than 60 percent higher than the national figure.
Prices in the Seattle-Tacoma-Bremerton area were up 2.7 percent in June from the year before, compared with a more modest increase of 1.7 percent nationwide.
This trend will continue, says the Washington State Economic and Revenue Forecast Council. In a report released last month, the council said Seattle's consumer-price index will outpace the country's as a whole until at least 2015.
"Rents are rising," said Desiree Carson, the council's operations manager. She did note that while Seattle's cost of living will climb more steeply than in the rest of the country, it will still be relatively in line with historical inflation rates.
Housing costs will continue to rise, but oil prices are expected to move in the opposite direction, adding friction to upward price movements, she said.
"A drop in oil prices will constrain inflation," she said.
The annual U.S. inflation rate averaged 2.42 percent from 2002 through 2011. That includes the tumultuous recessionary period of 2009, when prices actually fell.
Gas prices in the state followed the nationwide trend until about April. That's when the cost at the pump began to decrease for most of the country, but in Washington, prices continued upward, peaking at $4.21 a gallon in May for regular unleaded, according to AAA.
They have since dropped to $3.60.
Overall, gas prices went up 5.2 percent for the Seattle area from June 2011 to last month.
Steven Turnovsky, an economics professor at the University of Washington, said the inflation rate nationwide is relatively low because the economy has yet to gain real traction.
"It's a very deliberate and slow recovery," Turnovsky said.
Karl Baker: 206-464-2046 or email@example.com
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