Mountain West stands out with inflation spike, unemployment dip
Prices in the Mountain West are soaring. The Labor Department reported this week a year-to-year inflation rate of 8.5%, the highest rise in consumer prices since 1981. Broken down by region, the Mountain West stands out with a 10.4% spike. South Atlantic states saw the second-highest increase at 9.2%.
“Part of the reason is that the Mountain West states have in general been the strongest growth states coming out of the recession,” said Richard Wobbekind, senior economist at University of Colorado Boulder. “There are 11 states in the country that have regained their formal level of employment, and there’s a nexus of them in the Mountain West region.”
Utah leads that list with a jobless rate in February of 2.1%, the lowest in the country, and Montana and Idaho aren't far behind, according to Bureau of Labor Statistics data. Meanwhile, Nevada reported the largest unemployment rate decrease of 4.7%. New Mexico is the region's outlier, as its 5.6% unemployment rate is among the highest in the country.
In addition to a strong economic rebound across Mountain West states, Wobbekind points to soaring energy and housing prices. People living in the West could be disproportionately affected by rising energy prices given much of the region sees cold temperatures for multiple months of the year forcing people to crank thermostats. Meanwhile, the West’s rural expanses of land mean longer commutes that guzzle more gas.
Wobbekind says the home supply across the region is failing to meet demand, especially amid the work-from-home trend that has drawn high earners to the region. According to the Federal Housing Finance Agency, the Mountain West saw a 23% rise in housing prices between January of this year and last year – higher than any other region and five points above the national average.
Economists expect inflation rates to slow down in the coming months, but Wobbekind says it will take longer for home prices to follow suit, deepening the region's housing crisis.
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