San Francisco Chronicle - (Sunday)
Clothes, food, gas particularly pricey
Biggest inflation spike in decades hitting Bay Area especially hard
It’s no mystery to anyone living here that pretty much everything is pricier in the Bay Area.
But recent data shows exactly what has been costing Bay Area residents a lot more in the past year, particularly as the country is experiencing the most intense inflation spike in decades.
According to the latest Consumer Price Index figures from the U.S. Bureau of Labor Statistics, prices for all consumer goods in the U.S. jumped 6.2% from October 2020 to October 2021 in the U.S. In the San Francisco area, which comprises Alameda, Contra Costa, Marin, San Francisco and San Mateo counties, the annual increase was 3.8%.
“It’s not going to be a great Christmas if you’re watching your wallet,” said Jamie Court, president of nonprofit Consumer Watchdog. “The good news is that people have more money in their pockets overall. Unemployment is coming down, people are going back to restaurants and spending their money. It’s a bit of a mixed blessing. People have more money to spend, but they have to spend more of it.”
The category with the biggest price change over the past year was gasoline prices, with the U.S. city average surging 49.6% and gas prices in the San Francisco metro area up 39.5%. In contrast, gas prices plummeted 33.8% in the U.S. and 30.3% in the San Francisco metro annually around the start of the pandemic in May 2020.
Court said while the U.S. city average gas prices are up more annually compared with the Bay Area, Californians are paying way more at the pump than the rest of the country. In fact, Bay Area drivers are paying the highest per-gallon prices in the nation, reaching an average of $4.86 per gallon in San Francisco on Tuesday, according to gas price tracking app GasBuddy. That’s compared to the state average of $4.73 and $3.42 national average.
Several global and local factors are playing a role in gas prices. Earlier in the pandemic, with shelter-in-place mandates, many people weren’t driving and gas consumption and crude oil prices fell. But recently, prices have gone up again, and experts say that refineries have not been able to catch up to the demand.
California suffers what Court calls the “Golden State gouge,” where even after accounting for environmental costs and taxes, state residents are paying $1 more per gallon than the rest of the country.
The prices of used cars and trucks is also much higher than a year ago, jumping 26% for both the San Francisco metro area and the U.S. average. Court said the cost of cars is high because there’s a shortage of computer chips that go into many of them, so many people who can’t get new cars are looking at used ones.
Many other categories of consumer goods have also increase in the past year: energy services are up 11.2% in the San Francisco metro area, apparel is up 10.3%, and food at home has increased 7.1% annually. The pandemic was partly to blame for the spike in grocery prices, as residents have on-and-off been forced to shelter at home.
So what does this mean for Bay Area residents as we move into the holiday season that is full of travel and giftbuying?
Court’s advice depends on what you’re looking to buy. If you’re planning a road trip, he suggests filling up at an independent, unbranded station where gas prices are often lower.
For groceries, he said to shop around and look at some of the bigger chain stores, such as Trader Joe’s and Costco, which have longer-term contracts for goods and supplies so they don’t have to raise prices at all. Looking to buy a new or used car? Court suggests waiting at least six months to jump into that market.
For everything else, shop early.
“If you see something and it’s reasonably priced, don’t wait to buy it now because it’s not likely to be around when you get closer to Christmas,” he said. “You’ve got to realize that supplies are scarce and the demands are great.”
“The good news is that people have more money in their pockets overall. Unemployment is coming down . ... It’s a bit of a mixed blessing. People have more money to spend, but they have to spend more of it.”
Jamie Court, president, Consumer Watchdog