Ole Miss professor says Jackson, Hattiesburg inflation numbers not as bad as they seem
While Jackson and Hattiesburg have landed on a list of cities where the cost of living has risen the most in the past year, at least one expert said it is likely much ado about nothing.
Inflation has put both Jackson and Hattiesburg on the list completed by SmartAsset, which compared economic data from the first quarter of 2023 and the first quarter of 2022 for 237 areas.
Jackson is No. 10 on the list and Hattiesburg No. 13.
The study used Cost of Living Index data from the Council for Community and Economic Research for Q1 2023 and Q1 2022.
However, University of Mississippi's Chair of the Department of Economics Joshua Hendrickson said there must be more than meets the eye.
"These cost-of-living changes are largely driven by inflation. The variation by location is typically determined by local conditions," Hendrickson said. "However, with regard to Jackson, there does not appear to be a particular component that is driving the cost-of-living higher."
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Inflation has pushed the cost of living in the U.S. higher over the past two years. But as inflation has abated in many places and Americans continue to migrate to different parts of the country, the relative expense of different areas may still change with demand.
The cost of living in Jackson rose 4.7% in 2023 relative to the national average, which was the 10th biggest jump across the study. Having said that, Jackson, the study also states, is still among the most affordable places in the nation. In Jackson, $85.02 goes just as far as $100 nationally, making this city the 17th most affordable of 237 areas.
"What is likely going on here is that places like Jackson and Hattiesburg have a lower cost-of-living than the average city in the U.S.," Hendrickson said. "When there is significant inflation, many prices of goods and services rise uniformly across geographic locations. These result in higher percentage increases in lower cost-of-living areas. This seems to be the case here since 13 of the 15 cities listed began below the national average."
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Hendrickson pointed to several statistics in regard to Jackson, Hattiesburg and Mississippi in general.
Personal income in Mississippi grew at a rate of 5.5% in the first quarter of this year in the most recent data. This compares to 5.1% growth for the nation as a whole.
Real GDP (a measure of total production in the state) rose by 1.7% in the first quarter, Hendrickson pointed out. This was slightly lower than the national rate of growth of 2%, but higher than all of its neighboring states with the exception of Tennessee.
According to the Bureau of Labor Statistics, Mississippi's unemployment rate is currently 3%. This ranks 24th in the nation. In the South, that is higher than Alabama (2%), Arkansas (2.6%), and Florida (2.7%). However, it is similar to South Carolina and Tennessee (3.1%) and Georgia (3.2%). It is also lower than North Carolina (3.3%), Louisiana (3.4%), Kentucky (3.8%) and Texas (4.1%).
"What all of this means is that Mississippi is doing slightly better than the national average and is currently one of the top-ranked states in terms of key aggregate economic statistics in the Southeast," Hendrickson said.
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Consumer prices overall increased 3.2% from a year earlier, up from 3% in June, according to the Labor Department’s consumer price index, a measure of goods and services prices across the economy. That rise in inflation was largely due to a technicality in the calculation of yearly price gains.
While Jackson and Hattiesburg are mentioned in the top 15, Plano, Texas, topped the list with a cost increase of 9.5%, followed by Kalamazoo, Michigan, (8.8%); Hampton Roads, Virginia, (8.6%); Tulsa, Oklahoma, (6.1%); and Terre Haute, Indiana, (6.0%) which rounded out the top 5.
Ross Reily can be reached by email at rreily@gannett.com or 601-573-2952. You can follow him on Twitter @GreenOkra1.
This article originally appeared on Mississippi Clarion Ledger: Are Mississippi economy inflation numbers skewed?
