There are several reasons why New Yorkers love their city, and the cost of living is not one of them. Still, despite a wave of inflation nationwide, the city has seen the prices rising at the slowest pace compared to other metro areas in the U.S.
According to data published by the Bureau of Labor statistics on Thursday, New York City prices rose by 5.1 % in February compared to a year earlier and lower than the decade-high nationwide average jump of 7.9%.
As per Bloomberg News, NYC also recorded the lowest inflation among the big metro cities, a trend continuing since the pandemic-induced inflation began to lift off early last year.
The developments do not mean that New York City, famous for being pricey, has suddenly become a cheap place to live in. NYC remains one of the most expensive places in the U.S, as per Missouri Economic Research and Information Centre data.
Real Estate
The main reason for the inflation gap is that the housing market in the New York area is not as scorching hot compared to other places in the U.S.
As per Martin Kohli, the chief regional economist with BLS, the overall CPI divergence between the New York area and the rest is due to differences in shelter indexes.
The early months of the pandemic saw an exodus by workers in New York who left to work from home elsewhere, resulting in housing costs getting depressed. According to Douglas Elliman Real Estate data, the workforce has been returning, and prices have bounced back with continuous rise for 11 months.
While the other housing markets prices across the U.S. saws record being smashed, the median rents in Manhattan were still lower than the pre covid peak in January.
The inflation gap becomes larger as New Yorkers’ housing expense forms a significant part of their household budget compared to the average American. While shelter accounts for 32.9% of an average American price basket used to measure inflation, it is 37.5% for New Yorkers.
The U.S Cities saw the highest inflation with a 10.9 % annual increase and 10.6 % for Atlanta, which saw booms in the property market. The consumer prices rose in 22 out of the 24 metro areas while the New York City saw recorded a 50-percentage point below the highest level as per data tracked by the labor department.
Gas Price
The energy squeeze hit the New Yorkers with the average gasoline price almost doubled from early 2020 to $ 4.47 per gallon, above the national average as per data from GasBuddy. The only consolation is that one-third of workers are going to the office, sparing the rest from the cost of commuting. The Restaurants also helped New York residents by raising their prices lower than the national average.
