The cost of living in South Florida is rising faster than in any other major metropolitan area in the country.
The Consumer Price Index for the Miami-Fort Lauderdale area increased by a hefty 4.4 percent annual rate in May and June over the same two-month period last year. That’s a much sharper boost in consumer prices than the national rate, according to the U.S. Bureau of Labor Statistics.
While the rest of the nation recorded a subdued 2.7 percent annual increase in prices in June — the smallest monthly gain in inflation in five months — South Floridians were enduring eye-popping increases for staples such as food, rent, gasoline and even school supplies. The high rental and transportation costs are the biggest reasons prices are rising at a faster clip here than in other regions of the nation.
Have you noticed the price of milk lately at the supermarket?
“It’s ridiculous,” said Jim Vandenberge, of Hollywood, as he was grocery-shopping Wednesday at Publix on Andrews Avenue in Fort Lauderdale. Publix-brand whole milk in the downtown Fort Lauderdale store was running a penny under $5 gallon, while a gallon of McArthur brand whole milk cost $6.15.
“It’s milk, and you’ve gotta have it,” shopper Kathy Frederick said.The bureau does not include consumer prices in Palm Beach County in its regional index, but price trends there presumably are similar to Broward and Miami-Dade counties.
This isn’t the first time South Florida price increases have topped the U.S. city charts. Nor is the increase the highest. The Miami-Fort Lauderdale figures rose the most in the nation more than once last year, when area inflation rates were as high as 6.1 percent.
The current statistics show prices have heated up strongly this year. Back in March and April, South Florida inflation was growing at a 3.5 percent annual rate.
This report, which comes out six times a year, shows why pocketbook issues have become front-and-center in South Florida.
The largest jump came in the cost of housing, which is growing at a 6.7 percent annual rate largely because of the cost of rent. Rent in Miami and Fort Lauderdale has increased 9.1. percent since last year. Housing prices, on the other hand, have been falling.
“There’s no question rents have gone up,” said David Levin, of the Delray Beach real estate consulting firm David Levin & Associates. Florida’s previously hot residential real estate market drew in speculators, and the stock of rentals went down.
After housing comes the 4.2 percent annual gain in food and beverage prices. The milk price jump is especially noticeable in the last month, when the government raised the minimum price processors must pay for milk by 33 cents a gallon. One reason is the cost of corn, which has risen sharply because of the increased demand for corn to be used in ethanol. That’s driven up feed prices, which are about half the cost of producing milk.
And the way the federal milk price system is structured, nine counties in Florida pay the highest prices in the nation, said Bob Yonkers, chief economist of the International Dairy Foods Association.
Processors in Broward, Palm Beach and Miami-Dade pay an extra 37 cents a gallon because of the distance from here to the Upper Midwest, the nearest part of the country where there is excess milk production.
The Bureau of Labor Statistics also says South Florida had a strong 5.4 percent annual gain in an unusual category of consumer goods that combines the cost of education, books, school supplies, tuition and fees with the cost of telephone service and information-techology hardware and servers and personal computers.
High gas prices have contributed to higher transportation costs. South Florida’s gas and diesel fuel costs are rising at a 5.7 percent annual rate, higher than the nation’s 4.9 percent rate.
That may be the key to the whole picture, suggests economist William Stronge, a Florida Atlantic University professor emeritus.
“You have to ask yourself why should we be different than New York City or other cities,” he said. “It could be that transportation costs are somewhat higher.”
That contributes to the price of food and a host of other consumer goods.
Staff Writer Arlene Satchell contributed to this report.
Harriet Johnson Brackey | South Florida Sun-Sentinel