Here’s where the cost of living is rising the most

Here’s where the cost of living is rising the most (Courtesy of the Jacksonville Business Journal) — Inflation continues to be the biggest concern for small businesses, and new data shows just how much prices are rising and which cities are seeing the biggest hikes.

The latest Cost of Living Index data from the Council for Community and Economic Research shows the average cost of living increased 9.76% between the first quarter of 2019 and the first quarter of 2022.

The dramatic increases in the price of housing, fuel and other necessities has outpaced earnings growth for many employees, and it’s causing a variety of challenges for individuals and businesses alike.

The Cost of Living Index data shows housing has been a major factor. In the first quarter of 2019, the national average rent for a two-bedroom apartment was $1,146. By the first quarter of 2022, it climbed to $1,311 — a 16.2% increase. Rent accounted for 68% of the increase in the cost of living between 2019 and 2022.

The brunt of the recent surge in gas prices wasn’t accounted for in the report, but gas prices were still up nearly 50% in the first quarter of 2022 ($3.23) compared to 2019 ($2.17). Gas prices have since climbed to $4.71 per gallon, according to recent data from AAA. Grocery prices were up about 30% nationally, as well.

Which cities have been hit hardest by inflation?

Inflation has hit some metro areas much harder than others, as you can see in the gallery above.

Dayton, Ohio, had the highest increase in cost of living among cities within the nation’s 100 largest metro areas.

Among the nation’s largest metro areas, Chicago had the highest increase in total cost of living between the first quarter of 2019 and the first quarter of 2022. The cost of living rose 29% over the three-year period — a $1,077 jump to $4,845, making Chicago the 10th most expensive in the nation. About 85% of that increase is attributable to rent.

But it wasn’t just large cities that experienced huge cost surges. Bozeman, Montana; Cape Coral, Florida; and Dayton, Ohio; also ranked among the places with the largest jumps between 2019 and 2022.

In each of those areas, spiking housing costs — particularly when it comes to rent — were a significant factor in the increases.

In Dayton, for example, average rents rose from $810 in the first quarter of 2019 to $1,372 in the first quarter of 2022.

The priciest places in the U.S. in the first quarter of 2022 were New York City’s Manhattan ($6,332), Honolulu ($5,842) and New York City’s Brooklyn ($5,696).

Inflation’s economic impacts

Experts tell the Business Journals that rapid inflation is putting severe strains on small businesses, which are grappling with significantly higher costs for labor, materials and shipping, among other increases.

After barely registering as a concern in early 2021, inflation rapidly became small-business owners’ chief concern over the past six months — even outpacing labor availability in an intense market for talent.

The one-two punch of inflation and a tight labor market has curtailed growth and expansion opportunities for many businesses and also forced them to raise prices, which is having a domino effect on other businesses and customers. It’s also causing several headaches around how to approach pay.

Some business owners are concerned those trends could lead to a sales-slowdown in the second half that could eventually force businesses to pull back on hiring efforts.

Least affordable cities

Here’s a closer look at the 10 most expensive cities in the U.S. based on average cost of living in the first quarter

City, State	Average cost of living in 1Q 2022	Average cost of living in 1Q 2019	Percent change
New York City (Manhattan), New York	$6,452.94	$6,841.28	-5.7%
Honolulu, Hawaii	$5,842.93	$5,102.11	14.5%
New York City (Brooklyn), New York	$5,696.26	$5,210.99	9.3%
Boston, Massachusetts	$5,637.97	$5,404.71	4.3%
San Francisco, California	$5,633.16	$6,125.45	-8%
Los Angeles-Long Beach, California	$5,105.18	$4,618.86	10.5%
Seattle, Washington	$4,891.06	$4,593.10	6.5%
San Diego, California	$4,856.94	$4,124.34	17.8%
Oakland, California	$4,851.04	$4,295.29	12.9%
Chicago, Illinois	$4,845.55	$3,768.51	28.6%

Source: Cost of Living Index from the Council for Community and Economic Research