Advisor to the Treasury Secretary Joe Lavorgna discusses a report on why inflation is higher in the blue states in “The Evening Edit.”
FIRST ON FOX: An analysis by the White House Council of Economic Advisers shows that inflation has been lower in conservative-run states than in liberal-run states over the past year, with the largest differences in energy and transportation costs.
Because there is no official state-level CPI, the CEA used regional inflation data and adjusted it based on each state’s population.
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The inflation gap widens at the city level, with metropolitan areas in conservative states experiencing 1.9% annual inflation compared to 3% in metropolitan areas in liberal states.
Energy inflation is one of the biggest drivers of higher headline inflation in liberally run cities. In major metropolitan areas such as Baltimore, Chicago, Los Angeles and New York, energy prices rose much faster than in cities in conservative states.
Energy and transportation costs together account for much of the inflation gap between urban areas.
When essentials like electricity, gas and commuting become more expensive, households quickly feel the impact – even if prices rise only slightly.
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In the meantime, housing Inflation remains high nationally. Still, prices are rising slightly faster in liberal-run states than in conservative-run states.
White House Economic Director Kevin Hassett said Sunday that the Trump administration is taking an “all on deck” approach to addressing the housing affordability crisis.
According to CEA data, house prices remain high across the country. (Matthew Busch/Bloomberg/Getty Images)
He said the government is preparing a sweeping proposal aimed at easing the burden on homebuyers, details of which are expected early in the new year.
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The CEA’s findings come as inflation remains one of voters’ top concerns and state and federal leaders debate the energy, housing and transportation policies that directly impact the cost of living.
