How inflation in the Philly area compares with the rest of the region and country

The cost of living in the Philadelphia area is no longer rising as sharply as it was this summer — and that inflation rate is now in line with the rest of the broader region.

Prices rose nationwide by 6.5% from December 2021 through December 2022, down from a historic high of 9.1% in June, according to U.S. Labor Department data released Thursday

The agency released data for prices in the Philadelphia five-county area as well as Burlington, Camden, and Gloucester Counties in New Jersey. And for the first time since October 2021, the latest numbers suggest Philadelphia has similar inflation on average to the rest of the broader Mid-Atlantic and Northeast regions.

Inflation is a key measure of how the economy is impacting consumers. A decline in inflation means prices still rose from December 2021 to December 2022, but not as quickly as they did from July to July.

Declines were especially pronounced in energy and transportation in Philadelphia and the surrounding area. But food and beverages, housing, and medical care were more expensive in Philadelphia than the region overall.

Here’s what the latest data say about inflation in Philadelphia.

As inflation has decreased from historic highs, Philly’s inflation rate now matches the rest of the region’s

Inflation is usually provided as a single national number, like Thursday’s news of a 6.5% rate.

But the cost of living varies across the country, and it changes at different speeds. As of December, Philadelphia’s inflation rate is 6.4%, compared with 6.3% in the mid-Atlantic region, which the Bureau of Labor Statistics defines as Pennsylvania, Delaware, Maryland, Virginia, West Virginia, and Washington, D.C. The rate was 6.1% in the broader Northeast region, which includes those states and New England.

While Philadelphia saw higher inflation than the rest of the region starting in October 2021, continuing through inflation’s June 2022 peak, it appears its numbers are coming back down to line up with the rest of the region.

Philadelphia has seen a larger decline from peak inflation in July than the surrounding region

For the gap in inflation rates to shrink, Philadelphia’s rate had to decline faster than the rest of the region’s.

From its June peak of 8.8% to December’s 6.4%, Philadelphia’s inflation rate decreased by 2.4 percentage points, compared with 1.2 percentage points across the mid-Atlantic and 1.5 percentage points across the Northeast.

Philadelphia’s decline is on par with the nation for that same time period, which saw inflation slow by 2.6 percentage points.

Philadelphia’s overall inflation rate matches the nation’s, but there are wide differences across categories

The overall inflation rate is based on changes in prices across many different categories of goods and services.

And there’s a lot of variation in Philadelphia across goods.

In December, the city saw 10.9% inflation for food and beverages, 8% inflation for housing, and 4.7% inflation for medical care — all higher than was seen in the rest of the mid-Atlantic and Northeast.

Philadelphia’s food and beverage, transportation, medical care, and energy price increases also exceeded national averages.

In December, energy prices were up 11.8% in Philadelphia, 13.6% in the Mid-Atlantic, and 14.6% across the Northeast. But nationwide, energy prices are only up 7.3% versus a year prior. The average gas price in Philadelphia was $3.51 as of Jan. 12 — around 24 cents more than the national average, according to the American Automobile Association.

Food and beverage inflation remains stubbornly high in Philadelphia

Food and beverages was one category that saw the gap grow between the inflation rate in Philadelphia and the rest of the region in 2022.

From February through June, Philadelphia food and beverage inflation was on par with the Northeast, Mid-Atlantic, and nation as a whole. By December, though, food and beverage prices were up 10.9% in Philadelphia over a year ago, compared with 9.4% in the mid-Atlantic area overall and 10.1% nationwide.

Those rising food costs, along with other rising costs and a reduction in federal aid, are leading to an increase in hunger throughout the region and the country, poverty experts say.

Inflation is lower in Philly for some categories. Education and communication prices are lower than a year ago here — while they're up nationwide

Education and communication prices in Philly were down 0.5% in December from a year prior, a bigger drop than the surrounding area.

Nationally, education and communication prices were up 0.7%, compared to 1% for the mid-Atlantic and 1.1% for the Northeast.

The education and communication category includes tuition, school fees, and child-care costs. Some universities in the city, including Temple University and the University of Pennsylvania, have increased tuition to help account for rising expenses due to inflation.