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. University of Wyoming economist David Aadland agrees. He says these costs intensify what is already a high energy burden across rural areas. A 2018 report by the American Council for an Energy-Efficient Economy found rural Americans face disproportionately high energy costs.
Meanwhile, across the region, the home supply is failing to meet demand. This is exacerbated amid the work-from-home trend that has drawn high earners to Western states. 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.