Despite a jump in housing costs, overall inflation in the Vancouver-Portland metro area remained tame through the end of 2015, according to a new federal report.
The overall cost of household goods and services increased just 1.1 percent in the 12 months through December, said the Western Regional office of the Bureau of Labor Statistics in San Francisco.
The metro area – Clark County and five Oregon counties – inflation rate was higher than the U.S. average of 0.7 percent, but compares favorably with the 3.2 percent inflation in San Francisco and 2.2 percent in Seattle last year, Todd Johnson, BLS economist said.
“We don’t really compare city to city since each metro area has a unique set of goods and services but it is fair to say that both San Francisco and Seattle are seeing higher inflation than Vancouver-Portland,” Johnson said.
Rising housing costs – skyrocketing rental apartment rates and increasing single-family home prices – are driving up household costs in all three West coast cities.
“Rising housing costs are pretty driving inflation in metro areas such as Vancouver-Portland that are now making a strong comeback from the Great Recession,” he said.
In Vancouver, apartment rent rates jumped 6 percent or more in the past 12 months because of the tight rental market where low vacancy rates have put landlords in the driver’s seat. Average rent in the city has increased to about $1,400 per month. A two-bedroom, one-bath apartment now rents for more than $1,500.
Medical care costs also showed increases, up 5.2 percent last year, the report said.
Food costs remained relatively tame when purchased at the grocery store, but food purchased away from home increased 2.1 percent.
Johnson said that the Vancouver-Portland 1.1 percent overall inflation rate in 2015 is down from annual rates of the past several years. Annual inflation here in 2014 was 2.3 percent and 2.8 percent in 2013.
“And until the recession, annual inflation had been running at a much higher rate of over 3 percent,” he said.
Lower energy prices in general and much lower gasoline prices are the single most significant factor in holding down overall household costs in the Vancouver-Portland metro area. At the end of 2015, gasoline prices were down 24 percent from the prior year.
Meanwhile, the inflation outlook remains tepid unless oil prices and related fuel costs see a big rebound.
According to numbeo.com, the cost of living in Vancouver is 27 percent lower than in New York.
Tracking changes
2015 Vancouver-Portland CPI
Sector Price change (past 12 months)
Rental housing +6%
Medical care +5.2%
Food at home 0%
Food away from home +2.1%
Apparel -0.8%
Motor fuel -24%
All items +1.1%
Source: Bureau of Labor Statistics, San Francisco
