Largest Cities Had Some of the Lowest U.S. Inflation Rates in September

September change in prices from a year earlier, regions and select metro areas

September change in prices from a year

earlier, regions and select metro areas

September change in prices from a year

earlier, regions and select metro areas

To measure prices, the CPI focuses on what urban consumers pay for a hypothetical basket of goods and services. Those items are weighted to reflect the relative importance of components for a consumer living in a U.S. city. Rent accounts for 7.9% of the basket, while private transportation, including new and used vehicles and gasoline, makes up 14.1%. In the New York City area’s weighting, rent represents 12.1% of the basket, and private transportation is 9.2%. The design of the baskets for how people in cities spend their money, and how much income they spend on eating out or renting a car, is based on information from the Consumer Expenditure Surveys of urban consumers.

We used the surveys to compare how residents in rural areas, central cities and other urban areas budgeted their money, and we found that some of the spending categories with big differences between urban and rural areas also had big price increases, according to the CPI. The Consumer Expenditure Surveys define urban areas as the central city and attached locations inside a metropolitan statistical area, as well as other places with 2,500 or more people.

Rural consumers’ mean expenditures on gasoline and used cars and trucks were well above those of urban-area consumers in 2020. Households outside urban areas spent 37% more than the U.S. average on used cars and trucks, while spending in central cities was 9% lower than the average. The spending category saw one of the largest price increases in September’s CPI, up 24.4% compared with a year earlier.

On the other hand, rent, a heavyweight in central-city consumers’ budgets, saw some of the smallest price increases in September.

Difference from overall average consumer spending in 2020, by geographic type

Consumers spent less and saved more as they lived through the Covid-19 pandemic, and stay-at-home orders altered spending habits last year. Apparel spending was down 24% in 2020, and spending on food away from home was 33% lower, according to the Consumer Expenditure Surveys. In 2021, as cities start to go back to their usual activities, price increases in those categories are likely to affect urban consumers more. In September, indexes for food away from home rose 4.7% from the same period a year earlier, compared with a 4.5% increase for food at home.

—Danny Dougherty and Gwynn Guilford contributed to this article.

Write to Max Rust at [email protected] and Ana Rivas at [email protected]