As inflation cooled in July, prices rose more slowly in the Northeast. But not for energy.

Prices rose more slowly in the Northeast in July than the rest of the nation, helped by slowing housing costs, the U.S. Department of Labor reported Wednesday.

The Labor Department reported the consumer-price index rose 8.5% in July from the same month a year ago, down from 9.1% in June, which marked the fastest inflationary pace since November 1981.


In the Northeast, prices rose 7.3% in July, or 1.2 percentage points less than the rest of the country. Price changes varied among different items.

The CPI measures what consumers pay for goods and services.


The cost of food and beverages in the Northeast rose 10.1% vs. 10.9% in the U.S., apparel cost 4.3% more in the Northeast and 5.1% elsewhere in the country and paying more for transportation and medical care also took less from consumers in the Northeast.

The cost to heat homes and businesses in the Northeast went on a tear, rising by 24.1% from July 2021, while jumping 16.6% in the rest of the U.S.

Costly energy is not a surprise. The price of electricity per kilowatt hour is higher in New England than elsewhere, according to the U.S. Department of Energy.

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Cold winters drive up demand, and the cost, of natural gas to fuel power plants, transit costs are higher for natural gas pipelines that extend from the Northeast into New England and public policy is boosting costlier low- or zero-carbon power such as solar and nuclear.

Housing costs rose more slowly, up 5.5% in the Northeast vs. 7.4%. Economist Don Klepper-Smith said it was due, at least partly, to the region’s weak labor market.

Housing prices in the Northeast began rising at the start of the pandemic in 2020 as residents of New York and other large cities fled for New England and New York’s Hudson Valley in search of more space. A surge of home buying and building drove up costs.

The Northeast was on the “front end” of rising housing prices, Klepper-Smith said. Housing is linked to the strength of labor markets, which have been weak in parts of the Northeast.

“You’re not going to get traction in housing markets without traction in labor markets first,” he said.


In New England’s two states with the largest economies, Connecticut and Massachusetts, the unemployment rate in July was 4% and 3.7% respectively, exceeding the U.S. rate of 3.5%. Joblessness also was higher than the U.S. rate in New Jersey, New York and Pennsylvania.

Stephen Singer can be reached at