Dallas-Fort Worth’s May inflation rate of 4.7% was the smallest increase since March 2021 when consumer prices started to rise and peaked last summer.
Local rent prices continue to push the cost of living higher, and while grocery price increases moderated, taking the family out for dinner cost an average of 11.5% more than last year, according to new government data released Tuesday. Local utility and gasoline prices posted declines.
The local consumer price index year-over-year increase was higher than May’s U.S. CPI which moderated to a 4% increase.
“We’re heading in the right direction with the deceleration continuing and we actually saw some declines in prices,” said Julie Percival, Southwest regional economist for the Bureau of Labor Statistics.
The closely watched measure increased only 0.1% from April — continuing the steady decline in U.S. price growth. The D-FW CPI, which is reported every other month, increased by 0.8% from March.
Locally, the average basket of groceries increased 5.6% in May from a year ago. Egg prices fell 13.8% in May as the hen supply recovered from the deadly avian flu. The egg price drop was predicted and was the lowest decline since 1951.
“We’re not seeing double-digit percent increases in food prices anymore,” Percival said.
But restaurant prices are taking that lead as businesses deal with still higher costs for some foods while wages and rents are going up.
Cereal and baked goods are the stubborn grocery aisles where the largest food increases were recorded in May. Dairy products posted a small decrease from last year. The meat, poultry, fish and eggs category was up 2.7% from a year ago May.
Over the past couple of years, consumers saw shrinkflation in some products. That’s where sizes shrink to hide the item’s inflation in prepared foods. That may still be happening: A broad food category that includes frozen foods, snacks and canned soups, was up 11.8% from a year ago in May.
Residential rents were up 9.1% from a year ago and continue to post some of the highest category increases in the CPI. May utility prices dropped 2.8% from a year ago mostly from a 17.7% drop in natural gas service.
Rents are stubbornly high in Dallas-Fort Worth, Percival said.
“There’s a lot more demand here. We saw it rising at historical levels starting in January 2021 and even sharper in November 2021,” she said. “That’s when we saw a lot of companies and individuals move to D-FW because it was or perceived to be less expensive than other areas.”
Still, there were some expectations that by May rent increase would start to moderate because so many college students were either home for the summer or graduating, said Jack Leps, staff economist in the BLS Southwest office. “That didn’t happen and shows what a red-hot housing market Dallas is in.”
Lower gasoline prices, down 25.5% from a year ago in May, also contributed to subsiding inflation. It was easy to beat year-ago prices at the pump that hit record highs last summer.
Used car and truck prices increased 7.6% from two months ago as more of the supply is coming into balance, Leps said, but are still down 3.6% from a year ago.
Overall U.S. online prices in May fell 2.3% from a year ago and were down 1.2% from April, according to the Adobe Digital Price Index. That was the most significant decrease since the pandemic started and was the ninth consecutive month of year-over-year price decreases, Adobe said. The biggest decreases online were in computers, electronics and appliances.
Online grocery price increases decelerated for the eighth consecutive month, but remain high rising 8.2% in May from a year ago, according to Adobe index which is modeled after the government’s CPI and uses data from 85% of the top 100 internet retailers in its network.
The rate of U.S. inflation has been lower for 11 consecutive months and while that’s progress underlying inflation is still too high from the pre-pandemic 2% level. All eyes are on the Federal Reserve Bank and whether there will be a pause in interest rate hikes.
Twitter: @MariaHalkias
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