Inflation slowed to 3 percent in June, 0.3 percentage points lower than the month before, but high prices continue to impact Americans struggling to afford groceries, gas, housing and more.
Not every area sees the same effects from inflation, however, with certain cities seeing significantly higher inflation than others.
In a new WalletHub report, the following Metropolitan Statistical Areas were the top 10 for worst inflation: Dallas-Fort Worth-Arlington, Texas; Honolulu, Hawaii; New York-Newark-Jersey City, New York-New Jersey-Pennsylvania; Detroit-Warren-Dearborn, Michigan; Boston-Cambridge-Newton, Massachusetts-New Hampshire; Riverside-San Bernardino-Ontario, California; St. Louis, Missouri-Illinois; Washington-Arlington-Alexandria, D.C.-Virginia-Maryland-West Virginia; Seattle-Tacoma-Bellevue, Washington; and San Diego-Carlsbad, California.
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WalletHub calculated this by analyzing the consumer price index compared to two months as well as a year before.
The Dallas-Fort Worth area saw an inflation rate of 5 percent compared to a year ago, while Honolulu residents experiencing prices that surged 5.2 percent compared to a year ago (with slower inflation more recently). In the New York City-metro area, inflation stood at 4.2 percent year over year.
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Inflation originally reached a 40-year high after the coronavirus pandemic. Despite its slowing in recent months, it still remains above the Federal Reserve's target rate of 2 percent.
Furman University professor Kailash Khandke said inflation continues to persist because demand for services and goods remains high while external forces in foreign countries remain.
"When you couple these factors with external shocks, such as the Israel-Gaza, and Russia-Ukraine conflicts, these have contributed to high energy, gasoline, and oil prices, and this translates to inflation well above the Federal Reserve Bank's often-stated target rate of 2 percent inflation," Khandke said in the report.
To curb inflation, Devika Hazra, associate professor at California State University Los Angeles, said increasing savings should inevitably lower consumer spending.
"From a policy perspective, the higher interest rate is expected to do just that and historically raising interest rates has tamed inflation," Hazra said in the report.
"However, this has not been the case since the early 2020s. When interest rate hikes are not achieving the intended purpose, what might be helpful is improving financial literacy and resources so that individuals are aware of various financial tools and the merit of savings and financial investments."
If inflation rates continue at high levels, it could likely create barriers to homeownership, Hazra added.
"It could also have implications for wealth inequality," Hazra said. "Typically, higher-income households have relatively more financial freedom as well as financial literacy than those in lower-income groups. This allows higher-income households to cushion themselves from higher inflation."
Alex Beene, financial literacy instructor at the University of Tennessee at Martin, said areas like Dallas have a strong inflation problem, as they saw a boost in population during the pandemic, and, therefore, experienced a rise in pricing.
"Ultimately, it's going to take a cooling not just in spending, but in the white hot job market," Beene told Newsweek. "As long as these cities are producing high-paying jobs that can produce paychecks that fuel continued higher spending, we'll continue to see prices stay higher."
Kevin Thompson, finance expert and founder/CEO of 9i Capital Group, has a front-row seat to inflation, as a Fort Worth native. Thompson said the population surge of 150,000 people from 2022 to 2023 has pushed infrastructure spending and demand to even higher levels.
"The supply and demand curve needs to reach a higher price when it gets out of balance," Thompson told Newsweek. "Thus, with demand reaching ever higher levels in the metro areas of the country, prices need to adjust which typically means higher cost."
He said the rise of remote work was also integral in the inflation seen in some of the metro areas.
"With the advent of remote work, people are finding it more conducive to move from places like California to suburbs of large metro areas in the mid-west and South," Thompson said. "To be honest, there is very little anyone could truly do to bring down inflationary pressures ..."
He added: "The impact has been tough. You cannot drive anywhere without seeing significant infrastructure spend with roads and bridges. The influx of people has brought possible higher pollution rates and traffic to the area, and with continued growth, I do not see this trend abating anytime soon."
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Suzanne Blake is a Newsweek reporter based in New York. Her focus is reporting on consumer and social trends, spanning ... Read more
