Last month, the Bureau of Labor Statistics shared data that looks at two areas of Anchorage’s economy: consumer expenditures and consumer prices.
Consumer prices refer to how much certain things cost in the city, and how those costs changed over a certain period of time.
Consumer expenditures refer to how much Anchorage-area households spent, annually. In this case, from 2017-2018 households in the city spent — on average — over $70,000.
Neal Fried, an economist with the Alaska Department of Labor, helped break down that number.
Interview Highlights:
Top expenditure: “The biggest item that people are spending on is housing. Which is almost a third, on average about $23,000. And that’s a pretty broad category, but not surprising.”
Spending highlights: “The second largest category is transportation. The one that probably surprises people, especially when we hear a lot about it, is healthcare is a smaller category at about $5,000 but that’s because most people have healthcare through their employer and that’s not necessarily an expenditure that’s coming directly out of their pocket.”
Cost of living: “The cost of living in Anchorage is generally…roughly about 25% above the national average. Our income, household income and family income in Alaska, and Anchorage specifically, is significantly higher than the national average. Not only do things cost more here, so that means people are spending more dollars. But also, people have more money to spend to some degree.”
Inflation: “We’re actually seeing what we call deflation. Or a drop in the cost of living by 0.3%. That’s a really unusual thing to happen. It’s true, since 2015, for three years, we had the lowest period of inflation in our history, where it was 0.5% or less. And then it popped up last year, and then it’s come down again significantly…we don’t know yet whether it’s going to be the calendar year number or not. But it sure looks like it’s going to come in pretty darn low, very different than the rest of the country.”
The housing market: “Housing has a huge weight in the consumer price index. Over 40%. And our housing story is vastly different from the rest of the country. And it has been now for four or five years. Ours has been relatively flat, stagnant, however you want to call it, but unchanged. The nation’s has been zooming upwards.”
