Inflation in the New York metropolitan area is outpacing the national average, according to new economic data released Tuesday by the Bureau of Labor Statistics. The latest Consumer Price Index (CPI) figures show that rising housing and energy costs are the main drivers behind the surge, reflecting continued pressure on residents’ wallets.

Story Highlights

• CPI in New York rose 3.2%, above national 2.7%.

• Rent climbed 4.7% in New York versus 3.9% nationally.

• Energy costs increased 3.9%, driven by natural gas and electricity.

• Tuition and child care fees rose 5.9% locally.

• Grocery prices up 3.5% in New York, above 2.2% nationally.

• Medical care inflation in New York remains below national levels.

• Since pre-COVID, New York inflation is 22.5%, slightly below the national 24%.

• Forecasts indicate New York will continue to outpace national inflation in 2025 and 2026.

Bruce Bergman, an economist at the bureau, said the CPI for New York City and surrounding areas increased by 3.2% over the past year, compared with a 2.7% rise nationwide. He emphasized that much of the local inflation is linked to rent increases. “Housing costs are a major contributor,” Bergman explained. “Rent in New York has gone up 4.7%, compared to 3.9% nationally. That difference alone has a significant impact on the overall cost of living in the region.”

While the cost of living remains higher than the national average, Bergman noted that the pace of growth has eased compared to the steep increases seen in recent years. “We saw rates as high as 6% in 2022, and over 4% through much of last year,” he said. “Recently we have seen those shelter numbers come down a bit, but we’re still at a point where costs are elevated compared to pre-COVID levels.”

The report also highlighted the mixed effects of federal trade policies, including tariffs from the Trump administration. Core CPI, which excludes the more volatile food and energy prices, rose at its fastest pace in five months, indicating underlying inflation pressures remain significant.

Energy costs in the New York area increased by 3.9%, a stark contrast to the national average, which fell by 1.6%. Bergman pointed out that the jump in energy prices was not from gasoline alone, which actually dropped 11.4% at local pumps, but from rising natural gas and electricity costs. “Overall energy expenses have pushed upward, even as gas prices have softened,” he said.

Education and child care expenses have also contributed to local inflation. Tuition and child care fees rose 5.9% in New York, outpacing the 3.5% national increase. Grocery prices climbed 3.5% locally, above the 2.2% rise nationwide. “Families are seeing higher costs across multiple fronts, from school fees to everyday groceries,” Bergman noted.

In contrast, some categories saw slower growth in New York than nationally. Medical care costs, for example, increased by less than 2% locally, while rising 3.5% across the country.

The city’s Economic Development Corporation (EDC) reported that New York City has experienced 22.5% inflation since pre-COVID times, slightly below the national rate of 24%. According to the agency, this positions the city “in the middle of the pack” among U.S. metropolitan areas. Local inflation has been higher than Boston, San Francisco, and Houston, but lower than Miami, Atlanta, and Dallas.

Looking ahead, forecasts from the city’s Office of Management and Budget suggest that New York will continue to see inflation outpace national levels. Inflation in the city is projected at 3.9% in 2025, compared to 3.2% nationally, and 2.8% in 2026, slightly above the national rate of 2.6%.

As New Yorkers continue to navigate rising rents, energy bills, and education costs, the city’s inflation trend underscores the ongoing challenges of urban living. While some expenses like medical care have moderated, overall costs remain elevated compared to pre-pandemic levels. Experts warn that the city is likely to continue outpacing national inflation in the coming years, keeping financial pressures firmly on residents’ minds.

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