Overall inflation held steady at 2.7% on an annual basis, according to the July consumer price index. Core inflation — that’s prices excluding food and energy — rose to 3.1% per year.

But that’s the wide-angle picture of the whole country. Zoom in on your local slice of the economy and the picture may look very different, depending on where you live. In San Diego, for instance, inflation is running at 4%. In Dallas, it’s less than 1%.

It’s pretty normal for inflation to vary across the U.S., because it’s normal for prices to vary. Especially for housing, which makes up about a third of the CPI.

Of course, housing trickles down into many other parts of the index.

“People have to get paid more to live in some of these more expensive cities and so services that require a lot of labor also tend to be more expensive,” said Jed Kolko, a senior fellow at the Peterson Institute for International Economics.

But there might be some other forces behind the differences in price changes. Like tariffs.

“West Coast imports are largely coming from Asia. Asian imports right now are being hit with harder, higher tariffs than other places in the globe,” said Matt Colyar, an economist at Moody’s Analytics.

Proximity matters to both goods and to specific types of workers, said Caroline Fohlin, an economist at Emory University. 

“If you have a big immigration crackdown and you’re in an area that depends heavily on immigrant labor, for example, hospitality industry, meatpacking, agriculture, those prices for labor are going to go up,” she said.

Big picture though, Fohlin said local spikes in inflation are often short-lived.

“When you look at the metro areas you’ll see that there’s a lot of volatility in the inflation rates across cities,” she said.

Because swings in the economy — with housing, tariffs and the labor force — hit different places in the economy at different times. And usually, at some point, they make their way through all the other regions.

Jed Kolko at the Peterson Institute said that’s why macroeconomists keep an eye on regional data.

“They look at price trends, they look at labor market trends, they look at everything happening with local housing markets,” he said.

They can use that data to try to understand what’s coming to the rest of the country. 

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