Inflation eased in Alaska in August, but prices sharply higher than year ago

Inflation eased in Southcentral Alaska this summer although living costs were still up sharply from a year ago, according to the latest data from the U.S. Bureau of Labor Statistics, or BLS. Anchorage and the Matanuska-Susitna regions are the sole points in Alaska where the BLS gathers statistics, so the index, called “urban Alaska” by the BLS, serves as a kind of proxy for the state.

The data, published Sept. 14, measures costs in August and showed a 4 percent decline in living costs from June, the last time the BLS surveyed living costs. However, August costs were up 7.6 percent increase from a year ago, or August 2021.

The federal cost of living index is important because many wage and salary scales, particularly for public employee contracts, are linked to it. The index also affects payments under many public support services, such as child support, unemployment compensation, many rental agreements and other contracts, said Neal Fried, an economist with the state Department of Labor and Workforce Development.

“This is the one economic indicator that has the most practical effect on peoples’ lives,” mainly because of the links with wage contracts and services, Fried said. On a national level, social security is linked to the nation’s CPI.

The decline in August was influenced by lower gasoline prices and costs of food away from home, such as in restaurants. Gasoline prices fell 10.9 percent from June although still up 33.6 percent from a year ago; prices for natural gas rose 2.1 percent in August compared with June and about 2.2 percent year-over-year.

Electricity costs, which are mainly driven by the price of natural gas used as fuel, rose 1.5 percent in July and August but were down 2.6 percent compared with a year ago.

On an annual basis, prices for food at home, reflecting mainly grocery prices, rose 8.2 percent with increases in five of six food categories surveyed. Food away from home, mostly restaurants, cost 4.5 percent more year-over-year, according to the BLS data.

Minus food and energy the inflation index declined 0.1 percent in August compared with June; prices for household furnishings and operations down 2.2 percent and recreation costs were down 0.7 percent. Apparel (clothing) costs rose 2.7 percent and shelter (housing) was up 2.1 percent.

Over the year, the index for all items less food and energy rose 6.7 percent. The annual increase for Alaska, or August 2022 against August 2021, was driven mainly by higher housing costs, up 10.1 percent, according to the BLS.