Inflation cools off further in Bay Area as consumer prices ease

Consumer prices in the Bay Area rose at a much slower pace in June than in prior periods, a sign that the brutally high inflation rate of the last two years has begun to cool off — finally — the government reported Wednesday.

The Bay Area cost of living rose 2.9% in June on a yearly basis, the U.S. Bureau of Labor Statistics reported. That was the smallest annual increase for the region’s inflation rate in more than two years.

In February 2021, consumer prices rose 1.6% on a yearly basis.

The peak for the current bout of sky-high consumer prices appears to have occurred in June 2022, when the Bay Area inflation rate skyrocketed by 6.8%.

Since then, the successive reports for the inflation rate in the Bay Area showed an overall trend for steadily smaller annual increases in the pace of inflation.

But there’s one key caveat to assessing the June pace of inflation. The current price levels are still far higher than in recent years.

Two examples: June’s consumer prices are a whopping 9.9% higher than the same month two years ago and 13.3% above the prices of three years ago.

Bay Area food costs remain elevated and are running hotter than the overall inflation for the region. Food prices rose by a yearly basis of 5.4% in June.

The cost of food consumed at home rose 4.7% while the cost of food away from home such as at a restaurant hopped 6.6% higher compared with a year ago.

In contrast, motorists are getting a huge break at the gas pump. Prices for regular unleaded gasoline plummeted by 25.1% in June compared with the year before, the federal agency reported.

Gasoline prices in the Bay Area began falling in December 2022 and have declined ever since, according to government reports.

Consumers also enjoyed a big improvement in one of the two components of their monthly utility bills, which essentially are what PG&E charges people for electricity and gas.

Natural gas piped into the home — essentially the gas component of the PG&E bill — plunged by 22.9% in June compared with the year before.

Electricity prices, however, rose more than twice as fast as the regular inflation rate. The cost of utility electricity jumped 6.1%, an indication that this component of the PG&E bill continues to pinch consumers.

Meat, poultry, fish and egg products, whose prices have soared in recent years, posted a welcome decline of 0.6% in June compzred to the year before.