The Labor Department released its July Consumer Price Index this morning. This is an important monthly government dataset because it helps everyone who needs to make decisions about the U.S. economy to get a fix on inflation. There hasn't been much inflation in the U.S. over the past few years, and that's driving pressure on the Federal Reserve to undertake another round of monetary stimulus. (Why worry about pumping potentially inflation-producing money into the economy if there inflation hasn't shown up when money has been pumped into the economy before?)
The July CPI was basically flat. In Los Angeles, however, we're keeping a close eye on gas prices, after the Richmond refinery disaster. Prices have spiked since last week, but at the moment they've leveled off. The average gallon of regular in L.A. is selling for $4.10, according to GasBuddy.com.
This has been a bit of an unfortunately blow for SoCal, given the gas prices had been trending down, according to the BLS. As you can see from the chart above, gasoline prices spike in February — most likely on worries about military conflict in the Middle East — but began to steadily declined from April through June. A modest uptick in July — just .3 percent — signals the onset of the summer driving season.
But nationally, there was no summer of discontent for gas prices.
This would have held for L.A. as well, even given that we pay more for our cleaner-burning Golden State gas.
So the Richmond fire and ensuing volatility in the wholesale gasoline market has introduced some local inflation that's going to hit Californians and Angelenos disproportionately.