Will the Iran conflict end a 17-month inflation low for Los Angeles and Orange counties?
The regional slice of the Consumer Price Index rose at a 2.9% annual pace in February, the lowest since September 2024. By the way, local inflation averaged 3.5% last year and peaked at 8.6% in June 2022.
The good news for shoppers’ wallets may be temporary, given a key driver of the inflationary chill: Gasoline was 2.3% cheaper in the 12 months ending in February.
If you drive, you know that the U.S.-Israeli hostilities with Iran have ballooned crude oil prices. Typical California pump prices surged 60 cents to $5.33 in a week, according to AAA. That also means gasoline prices are 15% higher than a year ago.
Much of the force behind recently tamer inflation is an overall weaker economy that’s throttling consumer demand. Ponder price swings in some key consumer spending segments from February’s CPI report, ranked by size of cost movements …
– Recreation: Off 0.5% in a year. Tight budgets cut discretionary spending.
– Vehicles: Off 1%. High sticker prices are making folks drive older cars longer.
– Household goods/operations: Up 0.5%. Fewer home sales and relocation demand.
– Apparel: Up 2%. Thin gains likely tied to tariffs.
– Groceries: Up 2.9%. Little relief at the supermarket.
– Dining out: Up 3.1%. Restaurants can’t charge much more.
– Rent: Up 3.3%. This increase should dip as landlords begin to compete.
– Medical care: Up 3.7%. Seemingly never-ending upswing.
– Tuition/child care: Up 3.9%. And you wonder why young adults skip parenthood.
– Other goods/services: Up 6.4%. Labor shortages and higher wages add up.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com