Region's consumer prices fell in 2008
It was the first drop since 1956 and was led by apparel and energy. But prices rose for health care, education.
Consumer prices in the Philadelphia area fell last year for the first time since 1956 - finally, a dose of good news in a recessionary economy battered by job losses, falling housing prices and a credit squeeze.
The 0.4 percent decline for 2008 was led by lower prices for apparel and energy, the U.S. Bureau of Labor Statistics reported yesterday.
"Inflation is way down on the list of worries right now," said David Wyss, chief economist at Standard & Poor's in New York. "The worry right now is getting the economy to rebound."
The bureau report also said Philadelphia-area prices fell 3.1 percent in the November-December period, the largest two-month drop since October-November 1940.
For the year, Philadelphia's drop in consumer prices ranked fourth among 14 major metro areas - with Atlanta posting the biggest decline at 2.9 percent, followed by Detroit and Chicago.
While prices in the Philadelphia area fell in most major categories in the November-December period, a drop in transportation led the way. That category fell 14.6 percent - mostly because of a decline in gasoline prices, which dropped 43 percent in the two-month period.
The area also had price declines over the two months for housing, apparel, food and recreation. Within the apparel category, which fell 8.6 percent, prices dropped especially for girls' clothing, women's suits and separates, and women's footwear, the bureau said.
For all of last year, apparel prices locally fell 4.1 percent.
In the latest two months, the report said, prices rose in two categories: medical care and education/communication.
The local area consists of Bucks, Chester, Delaware, Montgomery and Philadelphia Counties in Pennsylvania; Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester and Salem Counties in New Jersey; New Castle County in Delaware; and Cecil County in Maryland.
Nationally, consumer prices rose 0.1 percent last year, the bureau report said.
They fell 0.7 percent in December, paced by declines in apparel, transportation, energy and recreation. The December decline was slightly smaller than the 0.9 percent economists expected.
The bureau calculates the U.S. consumer price figures monthly, but reports on Philadelphia bimonthly.
The December decline nationally marked the third straight month of lower prices and closed out a year in which inflation rose at the slowest rate in more than a half-century.
That is a marked change from just six months ago, when soaring energy prices threatened to trigger a widening inflation problem that many analysts believed the Federal Reserve would have had to fight by raising interest rates. Instead, the Fed has cut rates to virtually zero in an effort to pull the nation out of a recession, now 13 months old.
Excluding volatile food and energy prices, so-called core inflation was unchanged last month.