Group of people at Churchill in Phoenix

Exploring inflation’s impact on the national and local economy

Published: 05/25/2023
Updated: 07/27/2023

Greater Phoenix and U.S. Inflation Trends Seen in the Economic Monitor

by Kristen Stephenson

In April, GPEC launched the Economic Monitor, a comprehensive web tool designed to provide timely, actionable insights into the state of the economy. Through an exploration of key economic indicators, the Economic Monitor offers a concise picture of health at both national and regional levels.

Each month I’m diving into one of the indicators from the Monitor to share in greater detail what the metric measures, why it matters to the economy and what the current numbers are telling us. This month, I wanted to look at inflation.

What does inflation measure?

  • Inflation is the general increase in the prices of goods and services in an economy between two time periods (usually year over year). This is most commonly measured by the change in the Consumer Price Index (CPI), which measures the price of a basket of goods and services consumed by households. Data for the United States is released monthly, while data for Greater Phoenix is released bi-monthly.

Why does inflation matter?

  • The inflation rate indicates the changing purchasing power of consumers and businesses. This metric affects many facets of the economy, from interest rates on home mortgages to national debt to business investments. Mild inflation (around 2% annually) is healthy for the economy, but large swings in the rate impact the economy negatively. And while a sharp increase in the inflation rate is unhealthy, that doesn't mean a large decrease (deflation) is good for the economy either, as it contributes to higher rates of unemployment and decreased consumer confidence.

What do the current numbers say?

  • National inflation reached a peak in June 2022 at a 9.1% annual growth in CPI and has been falling since then. Inflation as of April was 4.9%. This is still markedly above the long-term average but is down 0.1 percentage points from the previous month and was the lowest year-over-year increase since April 2021. Food and shelter continued to see large increases at 7.7% and 8.1%, respectively. However energy prices decreased 5.1%.
  • Greater Phoenix experienced an even more dramatic increase in inflation than the US over the last year. Inflation peaked at 13% in August 2022. As of April 2023, that had decreased to a 7.4% gain year-over-year. Much of the delta above the US rate can be attributed to the rapid increase in home prices in the region. As this has leveled off, expect to see local inflation rates more in line with the US rates in the coming months.

To see these inflation trends mapped alongside 14 other key indicators of health, visit We hope you find the Monitor a valuable tool in understanding the ever-changing economic landscape.