(Bloomberg) — There are many reasons New Yorkers love their city. Cost of living is usually not one of them. Still, right now — amid a wave of inflation nationwide — prices in the city are rising at the slowest pace of any US metro area.
Prices in New York City rose 5.1% in February from a year earlier, while nationwide jumps from a decades-high of 7.9%, statistics Published Thursday by the Bureau of Labor Statistics.
City rates last month were also the lowest among large metro areas, continuing a clear trend since pandemic inflation began early last year: New York prices have been climbing at a much slower pace.
This does not mean that the famously expensive city suddenly became a cheap place to earn a living. It’s Still One of the Most Expensive Places to Live in America, According to statistics From the Missouri Center for Economic Research and Information.
The main reason for the inflation gap is New York’s housing market is not as hot as it is in much of the US.
“The difference between the US and the New York region in the overall CPI is largely due to differences in the index for shelter,” said Martin Kohli, BLS’s chief regional economist.
The city saw an exodus that drove housing costs down in the early months of the pandemic, as New Yorkers migrated from home to work elsewhere. According to data from brokerage Douglas Elliman Real Estate, they are making a comeback, and prices have risen for 11 consecutive months.
Yet, as of January, the recovery is still just short of its pre-Covid peak in Manhattan – while in other housing markets across the country, records have been broken.
And the inflationary gap with the rest of the country is exacerbated by the fact that housing accounts for a larger portion of the household budget for New Yorkers than the average American. Kohli said NYC shelters 37.5% of the price-basket, which is used to measure inflation, compared to 32.9% nationally.
U.S. cities with the hottest inflation — like Phoenix, which led the nation last month with 10.9% annual price growth, or Atlanta 10.6% — have generally been big property-market boomers. Overall, 22 of the 24 metro areas tracked by the Labor Department saw record increases in consumer prices. The rate in New York City is down 50 percentage points from its record.
gas prices
New Yorkers are also getting their share of an energy squeeze, which is set to worsen after rising global prices following Russia’s war on Ukraine.
The average price of gasoline in New York City has nearly doubled since the beginning of 2020 — above the national average of $4.47 a gallon — according to gasbuddy data, But this is offset by the fact that car usage is low in New York compared to most of the US, so relatively few people may feel the effects.
But it is killing residents like Faisal Ansari, a Queens resident. He said he has been driving full-time for UberEats for almost two years. Now, due to rising gas costs and low income from each trip, he is considering looking for other jobs.
“It takes a hit when you have to refill your gas every couple of days,” he said of the recent price hike at the pump. “We are being crushed from everywhere. it’s really bad.”
A consolation for New Yorkers: Many of them are still covered by commuting costs. Data from Kastel Systems shows that only a third of workers in the Greater New York area are coming into the office, which is well behind the national average.
And residents are enjoying relief at New York restaurants, which have raised their prices at a slower rate than the national average – perhaps to help revive demand, as the city’s diners were more likely to be pre-pandemic than Americans. Have been more reluctant to go back to habits. Overall according to Open Table data.
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