Consumer prices are going down in South Florida, driven by dropping gasoline, housing and clothing costs.

Overall, local prices for consumer goods have fallen by the largest amount in 31 years, according to a federal Bureau of Labor Statistics report Wednesday.

The local measure of consumer prices fell 1.8 percent on an annual basis through August.
August was the sixth consecutive month in which inflation has been absent from the local economy, replaced by falling prices or deflation.

The rest of the nation is experiencing deflation, too. Atlanta’s prices are going down at the fastest rate, 3.8 percent, followed by Detroit, at 2.3 percent.

Nationwide, prices are falling, but not as rapidly as in those cities or in South Florida.

The national consumer price index has declined 1.5 percent on an annual basis, even though for the month of August, the CPI actually rose 0.4 percent.

When volatile energy and food costs are stripped out, the core CPI is going up at a 1.4 percent annual rate – the smallest rate of increase in more than five years.

The South Florida core CPI is also rising, but at a slight 0.3 annual rate.
In South Florida, “We are seeing acceleration in the decline that has been going on in Miami,” said BLS Economist Matthew Dotson.

Driving prices down was a 9.2 percent annual decline in transportation costs – including gasoline.

“Think about what you paid for gas last summer, “ Dotson said.

Housing costs, which haven’t fallen in South Florida since September 1986, came down 0.6 percent on an annual basis, the BLS said.

Apparel has plummeted by 14.9 percent since last year.

“With the loss of wealth form of home equity, the tremendous loss in investment portfolios and high unemployment, those take the wind out of consumer demand,” said Economist Sean Snaith of the University of Central Florida. “That’s why sales are showing up for apparel,”

The BLS measures inflation nationally every month and local inflation in ten cities every other month. It records prices in Miami and Fort Lauderdale, but not in Palm Beach County. Local economists say the price trends there are similar, however.

In Miami and Fort Lauderdale, consumer prices fell 0.3 percent in April, 1.6 percent in June and now 1.8 percent in August.

Those are the only decreases – other than a one-time dip of 0.1 percent in July 1986 – that the BLS has recorded since it began publishing local inflation figures in 1978.

That’s in sharp contrast to last year, when prices were growing at annual rates of 4.9 percent to 5.8 percent.

In recent years, the peak South Florida annual inflation rate was 6.1 percent at the start of 2006.