Inflation eased in the Bay Area during December as consumer prices moderated, although PG&E-linked electricity and gas utility costs remained stubbornly high at year’s end, a new government report shows.
Bay Area consumer prices rose just 2.4% in December on an annual basis as compared to the same month the year before, the U.S. Bureau of Labor Statistics reported.
This pace of inflation is a huge improvement from the pattern during 2022 and 2023, when consumer prices in the Bay Area were rising at a brutally high rate.
In June 2022, Bay Area consumer prices peaked at an annual increase of 6.8%. At the time, that was the highest annual increase for inflation in the region in nearly four decades, topped only by a 7.1% year-to-year increase that occurred in October 1984.
Since the spike in mid-2022, Bay Area consumer prices have slowly retreated from that sky-high yearly pace of inflation.
For most of 2024, the Bay Area inflation rate, measured on an annual basis, ranged from a high of 3.8% in April to a low of 2.4% over the final three months of last year.
In a further sign of hope, consumer prices in the nine-county region in December were down 0.4% compared with October. The federal labor agency releases an inflation report for the Bay Area only every other month.
Nationwide, inflation rose by 2.9%, the Bureau of Labor Statistics reported.
In the Bay Area, consumer prices were being fueled primarily by hefty increases in the cost of electricity such as that provided by PG&E and natural gas piped into the home, also a service the PG&E supplies.
Oakland-based PG&E, though, has estimated that starting with the billing cycles of this month, average monthly payments for residential customers who receive combined electricity and gas services should moderate from the soaring costs of recent years.
PG&E customers who had to grapple with a string of rate increases in 2024 were promised a respite early this year because combined monthly bills are poised to be only a bit higher compared to a year ago.
A typical PG&E residential customer who receives both electricity and natural gas services from the investor-owned utility could expect to pay about $295 a month starting with this month’s billing cycle.
This means the January 2025 average bill is just $1 higher than the $294 a month that typical PG&E residential customers were paying for combined electricity and gas services in January 2024. It’s also a dramatic turnaround from the increases ratepayers had experienced in recent years.
Food costs for items consumed at home in the Bay Area rose only a tiny amount during December, the federal government reported. This was primarily due to flat or falling prices for fruit, vegetables, dairy products, cereals, and bakery products.
Meats, poultry, fish and eggs were the exception to this pattern. These food products rose faster than the general inflation rate. Shortages have driven egg prices sharply higher.
Prices for food consumed away from home skyrocketed as dining out at restaurants became more expensive, the report found.
Gasoline prices, as measured by the cost of regular unleaded gas, fell in December compared with the year before.