San Diego County’s inflation rate fell in July as gasoline prices temporarily dropped from highs related to the Iran conflict.
The region’s inflation rate fell to 2.7% in July, said the U.S. Bureau of Labor Statistics on Wednesday. That was down from 3.8% in May (data comes out every two months). San Diego County started the year with a 2.6% rate, so it essentially returned to where it started before the conflict.
The report shows a 10.1% decrease in gasoline prices, but this trend may be short-lived since prices began climbing again in late July. Fuel and crude oil prices started to rise after the U.S. and Israeli forces launched joint airstrikes on Iran on Feb. 28. The Iranian regime responded by choking traffic in the Strait of Hormuz, where 20% of the world’s oil exports traverse. Late July saw the end of a truce between the U.S. and Iran, sending worldwide oil costs up again.
Still, there were other signs San Diego County residents might be seeing relief in areas not directly related to gasoline. From May to July, the price of fruit and vegetables dropped 2.5%; transportation was down 2.3%; and cereal and bakery products were down 1.8%.
Also, the San Diego metropolitan area, which includes the entire county, was in the rare spot of having the third-lowest inflation rate in the U.S., according to the bureau data for the 12 metro areas. San Diego typically has one of the highest inflation rates in the nation, thanks to high fuel and housing costs.
Urban Hawaii had the highest inflation rate at 5.6%, followed by the metro areas of New York, at 4.6%, and Washington, D.C., at 4%. The only metro areas with slower-rising prices were Chicago, at 2.5%, and Tampa, at 1.9%.
Alan Gin, an economist at the University of San Diego, said San Diegans — much like all Americans — have felt the effects of sweeping tariffs (later repealed) and the Iran conflict.
“We’ve been buffeted with all these high prices for about a year and a half,” he said. “Any calm right now is a relief to San Diegans.”
Gin added that rising gas prices after the July report will likely mean inflation picks up again. However, he said gas prices are not surging as badly as when the war with Iran started.
The average price for a gallon of regular in the San Diego area has dropped four cents in the past week to $5.69 on Wednesday, according to AAA. Regular gas hit a peak of $6.21 a gallon in early May. Even with a recent decrease, gas is still up $1.13 in a year.
On an annual basis, here are the areas where prices changed in San Diego County:
Motor fuel: The price for unleaded regular was up 21.6%; unleaded midgrade was up 20.6%; and unleaded premium was up 20.2%.
Food: Cereals and bakery products were down 1.2%; dairy, up 2%; fruits and vegetables, down 1.3%; and meats, poultry, fish and eggs were up 1%.
Energy, including household energy and motor fuel, was up 20.5%.
Shelter, including rent and owners’ equivalent of rent, was up 2%.
Transportation costs, which include automobile maintenance, vehicle parts and car insurance, rose 4.4%. Used car and truck prices were down 3.2%.
Apparel, up 8%.
Medical care, which includes hospital and related services, drugs and medical equipment and supplies, was up 0.4%.
When volatile food and energy costs are removed from the overall inflation rate, so-called core inflation in San Diego County was 1.9%, below the nationwide average of 2.5%.
Nationally, inflation was highest in the Northeast at 4.1%. It was followed by the Midwest at 3.5%, the South at 3.2% and the West at 3%.
Inflation rate by metro area
Urban Hawaii: 5.6%New York-Newark-Jersey City, NY-NJ-PA: 4.6%Washington-Arlington-Alexandria, DC-VA-MD-WV: 4%Denver-Aurora-Lakewood, CO: 3.9%Boston-Cambridge-Newton, MA-NH: 3.7%Los Angeles-Long Beach-Anaheim, CA: 3.4%Minneapolis-St.Paul-Bloomington, MN-WI: 3.2%Riverside-San Bernardino-Ontario, CA: 3.2%Dallas-Fort Worth-Arlington, TX: 2.9%San Diego-Carlsbad, CA: 2.7%Chicago-Naperville-Elgin, IL-IN-WI: 2.5%Tampa-St. Petersburg-Clearwater, FL: 1.9%
Source: U.S. Bureau of Labor Statistics’ Consumer Price Index