Inflation Rate Matches National Level
By Jared Kadry CoStar Analytics February 14, 2022 | 1:43 P.M.
After reaching 7.1% in December, inflation in Southern California has risen again. The inflation rate for January was 7.5%, the highest level locally since June 1982 and the sixth consecutive increase. Prior to this month, price jumps were lower than the nation, but the January level matched that of the U.S. average for the first time since December 2020.
Transportation costs continue to lead the charge in Los Angeles and Orange counties. Transportation costs were up 19% year over year, similar to the level recorded in December, with prices for used cars and trucks increasing by 38.5% and motor fuel jumping by 39.2%. Supply chain disruptions at the ports and chip shortages have resulted in a lack of new cars, thus driving higher demand for used vehicles.
Supply chain bottlenecks and record-high demand for e-commerce goods have led industrial tenants to seek out large warehouses close to the ports in last-mile locations. The result has been record-low industrial vacancies in both Orange County and Los Angeles.
Fuels and utilities were up 18.7%, a rise from the 14.2% recorded in December. Household energy and energy services both rose by 23.5%, and utility gas services saw a 33.3% increase. The number of employees working remotely has driven higher energy usage at home, especially in multi-person households. Apartment rents in Orange County are up 17% year-over-year, compared to 7% in Los Angeles. Apartment vacancies are near record lows in both markets.