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New York Area Inflation Stuck At 6%

Meanwhile, office occupancy is mired at below 50%, which one research group estimates translates to a $12 billion annual loss in economic activity.

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Price changes at the Target in Herald Square on Friday, July 15, 2022.

Hiram Alejandro Durán/THE CITY

Prices in the New York City area increased 6.0% between January 2022 and January 2023, on par with the national Consumer Price Index of 6.4% over the same period. 

Inflation in the New York City area had been averaging 2 percentage points lower than the national rate, which economists attributed to New Yorkers’ reliance on mass transit rather than on gas-consuming cars and to lower increases in housing costs. But a decline in gas prices seems to have wiped out the difference between the local and national inflation rate. 

A rise in food prices was the biggest factor in the New York City area’s inflation bump, up 8.4% over the last 12 months. Energy prices rose 4.4%. So-called core inflation, which excludes volatile food and energy costs, rose by 5.7%.

To some local nonprofits, inflation has been very burdensome. Citymeals on Wheels has seen a 33% increase in the cost of the ready-to-eat meal boxes it delivers to homebound elderly New Yorkers. At the same time, that population, like all New Yorkers, are coping with higher food bills.

The latest data is also likely to fuel the debate over whether and how New York state should increase the minimum wage, an issue that has pitted Democratic Gov. Kathy Hochul against progressives in her own party.

With inflation rates where they are, the $15 minimum wage — which applied to all employers in 2020 — will be worth only $13 in purchasing power, according to a new report issued Tuesday by city Comptroller Brad Lander. 

The comptroller’s report also says that the governor’s proposal, which caps increases at 3%,  would increase incomes in New York City by about $400 million in 2024. The much larger increases in the progressive’s proposal, which would mandate a $21.25 minimum by 2026, would generate about $2 billion annually by 2026. 

The Cost of Missing Office Workers

Average workday office occupancy in the New York region remains stuck at just under 50% — and a new study shows that the lack of office workers is costing the city dearly.

The latest back-to-the-office barometer from the building security systems company Kastle released Tuesday showed office occupancy at 48.6%, essentially unchanged for the last several weeks.

Meanwhile, a report from WFH Research pegged the economic loss to New York City from the decline in in-office work to be about $12 billion a year, including spending on meals, transportation and and other spending.

The group, which has been studying remote work since the pandemic began, estimated the economic impact of remote work at $4,661 per worker. It multiplied that figure by the estimated 2.7 million people who worked in Manhattan in 2021.

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