(The Center Square) – According to a new report, high inflation in the Chicago area is affecting the entire state of Illinois.
WalletHub found that the Windy City’s Consumer Price Index metrics changed 4.3% over the last year. The updated inflation numbers landed the Chicago metropolitan area at the top of the report’s rankings for cities with the biggest inflation problem.
WalletHub writer Chip Lupo said the effects are felt outside of Chicago area.
“Unfortunately, in the state of Illinois, pretty much how Chicago goes, the rest of the state goes. If there are signs of economic strife in Chicago, it’s going to trickle down in a bad way to the rest of the state,” Lupo told The Center Square.
Lupo said state and city budget deficits affect the economic landscape. He also cited regulations of building permits and startup businesses.
“Some key drivers that are plaguing Chicago are, of course, the region’s rising cost of living, which was already high to begin with, and that includes things such as higher housing and transportation expenses,” Lupo said.
Lupo added that Chicago’s poor job market conditions, consumer spending patterns and higher business costs have also driven prices up.
The WalletHub report said Chicago’s inflation metrics were more than four times greater than the numbers for Houston, Texas, which had the smallest inflation problem of the 23 metropolitan areas surveyed.
“Houston, being in Texas, there’s no state income tax. It’s a very business-friendly state. Housing in the greater Houston metro area is high, but it’s considerably lower than you would find in the Chicago area,” Lupo explained.
“Texas has got a lot going for it,” he continued.
“You’re going to see a steady stream of folks fleeing Chicago, Illinois, not just for states like Texas, but states like Tennessee and Florida that have no state income taxes and have more business-friendly climates,” Lupo said.
Using the December 2024 Consumer Price Index data release by the Bureau of Labor Statistics, the Joint Economic Committee (JEC) State Inflation Tracker estimates that the average household in Illinois is paying $1,149 more per month to purchase the same basket of goods and services as in January 2021. Cumulatively, the average Illinois household has spent $35,255 more due to inflation since January 2021.
