WalletHub Analyst Jill Gonzales joins Yahoo Finance Live to discuss a new WalletHub report that found the U.S. cities where inflation is hurting the most.

Video Transcript

DAVE BRIGGS: Consumer prices rose less than expected in November, still, though, up 7.1% from a year ago. Much like Tip O'Neill famously said about politics, all inflation is also local. Here are the top five cities where inflation is rising the fastest, according to WalletHub-- Phoenix, Miami, Tampa, Atlanta, and Seattle rounding out the top five.

Let's talk about that with WalletHub Analyst Jill Gonzalez. Jill, nice to see you. So why are those top five cities-- what do they have in common? You may be on mute there, Jill.

JILL GONZALEZ: There we go.

DAVE BRIGGS: There you go.

JILL GONZALEZ: Inflation all over the country is based on supply and demand. Right now, it stands at around 7.1%. But in these five cities, it's up as high as 12% in the Phoenix and Scottsdale area, more like 10% in most of these other cities. And that really comes down to labor shortages.

So look at these places-- Phoenix, Scottsdale, Miami, Fort Lauderdale, West Palm Beach, Tampa, St. Petersburg, Clearwater-- these are metro areas that are right now in peak snowbird season. So they're kind of retiree havens year round, but even more so now.

So that's putting even more pressure on their ecosystems when it comes to the finances. That means that there are more people, therefore more demand, and still less supply because we're already seeing these labor shortages post-pandemic. So that's why these places are even more stressed financially right now when it comes to inflation.

SEANA SMITH: It's interesting, Jill. I wouldn't have guessed that. I guess then when it comes to the stickiness of this, the fact that so many people are moving to those cities, the fact that you mentioned snowbirds, I would think that would then increase over the next several months as it's become more and more attractive places to live. Does that mean that maybe inflation is going to tend to go even higher in some of those cities than where it is today?

JILL GONZALEZ: Well, the good news is that inflation overall seems to be slowing down. I do think that it will slow down nationwide. But in these particular cities, it's going to take a while to see that same slowdown that we might be seeing in other places like a New York or an LA. So I do think that things are going to be slowing down.

I mean, a lot of this does come down to the Federal Reserve. We have seen that their aggressive rate hikes have, seemingly, been starting to slow inflation. Certainly, by no means the amount that you might feel it in your wallet any time soon, but I do expect that to happen in these cities as well, just not at the same rate that we're seeing it across the rest of the country.

DAVE BRIGGS: Well, you surprised me, Jill-- I was certain that you were going to say it's all about real estate. Number one, two, and three are the top three housing markets over the last two years. They have been growing exponentially-- up somewhere around 20% in terms of their home prices. How does real estate factor in here?

JILL GONZALEZ: That, too. I mean, obviously, these markets are very well sought-after, especially after the pandemic. People want more space. People want to be outside working remotely. People are retiring earlier as well.

So we're seeing all of that, which, again, brings it back to more people, more demand, and not enough labor to accommodate these growing populations. So even housing costs are helping to slow that down. People might be now waiting a little bit with a recession looming. But either way, the populations have grown there over the past couple of years.

DAVE BRIGGS: Yeah. And those stand in stark contrast, though, to six, seven, and eight, which are Detroit, Anchorage, Alaska, and Baltimore, all three relatively struggling economies at this juncture. But I want to get to the cities where inflation is growing the slowest-- Chicago, Honolulu, Houston, San Diego, Minneapolis also really stand out. San Diego and Honolulu in particular, two of the most expensive cities in the country-- what stands out to you about the bottom end of the spectrum?

JILL GONZALEZ: So here we see cities in a lot of cases that had kind of the least room to grow in terms of inflation, right? Honolulu, one of the most expensive places. Everything you buy there kind of has an additional import tax tacked on to it. So things can't necessarily get that much more expensive there, especially when we're talking about imports.

I mean, when everything is coming in already paying for it, that's kind of what we're seeing here as well. Some of those other places-- again, more expensive to begin with, so less room to kind of go. But you are, regardless of where you are, especially in these places, even if you don't see inflation as much, you're still probably paying a little bit more for a little bit less, especially when we're talking about groceries or gas.

DAVE BRIGGS: No question about that. We saw some numbers skyrocket in produce last month. Jill Gonzalez from WalletHub, thanks so much.