As the economy hums along at a healthy rate, cost of living is increasing for Americans.
According to the Department of Labor, consumer prices increased by 2.9% over last year’s numbers. This indicates that while the economy appears to be strong, Americans are earning less than they were a year ago.
On of the key drivers of the increase was home prices, which are rising steadily and in some areas, skyrocketing. Cost of healthcare and other services actually decreased, though housing and food increased along with used cars. The current rate of inflation is the fastest pace in 10 years.
With costs increasing and an economic generally flourishing, it’s difficult to imagine the Federal Reserve will not increase short-term interest rates. Two increases have already occurred in 2018 and another two are scheduled for early 2019. There’s no reason to assume these will not occur.
If interest rates do increase, it will likely slow down economic growth while at the same time reigning in inflation. Both elements will make it difficult to achieve the sustained 3.0% GDP growth that President Trump has stated is his goal.
Cost of Living Impact
The price of gas, housing, and groceries have fluctuated this year. Gas prices surged by 25.4% in the last year although dipped in July which may indicate prices are stabilizing.
It remains to be see what the full impact of the recent tax overhaul will have on the economy as a whole. Growth has continued to increase, however wages have been slow to keep up.
As cost of living changes, some areas are becoming increasingly difficult to live in. In California for example, home prices have skyrocketed in recent years. Bu that doesn’t mean there aren’t still plenty of places to live without the high cost.
For that, there City vs City.
City vs City
City vs City is a powerful cost of living app which uses real, local data to determine the cost of living in your city. The app considers home prices, state and local taxes, transportation costs, and more.
Use City vs City to compare your cost of living against another city you might be thinking of moving to. You’ll see a side by side breakdown of costs and be able to know if the move is right from a cost of living perspective.
Speaking of California, let’s take at an example. How would your costs change if you were to move from Santa Barbara, California to Cape Cod, Massachusetts.
City vs City seeks to answer the question: if you move to another city, how much do you have to earn in pre-tax income in order to maintain the same standard of living? While Cape Cod isn’t exactly cheap, Santa Barbara is no picnic either.
On average, Cape Cod would require about 21% LESS in pre-tax income in order to maintain the same standard of living you enjoyed in Santa Barbara. Of course, all cities are not created equal; so if you’re thinking of moving: download City vs City and start comparing today!