Office of the New York State Comptroller - Inflation in the New York City Metropolitan Area

Inflation in the New York City Metropolitan Area Last week, the U.S. Bureau of Labor Statistics (BLS) released new data indicating consumer prices grew by 8.5 percent nationally and 6.1 percent in the New York City Metropolitan Area (NYC metro area) in March 2022 compared to the same month a year ago.1 For over a decade following the Great Recession of 2008, inflation remained low, generally under 2 percent; however, price increases began to accelerate in the spring of 2021 and are now growing at the highest annual rate in 30 years in the NYC metro area.2 During this high inflationary period, increases in the NYC metro area have been less than those nationally and in other large metropolitan areas; nevertheless, price increases appear poised to outstrip earnings growth. Specifically, consumer costs in the NYC metro area have grown most steeply for energy, transportation, recreation and food. While some price increases may moderate in months to come, short-term expectations of persistent inflation remain high.3 Consumer spending habits have already shifted, and persistent inflation on essential household items, such as housing and food, will limit purchasing power and squeeze household budgets absent stronger wage growth. The Basket of Goods The most commonly used measure of household inflation is the Consumer Price Index (CPI), which has historically provided a reliable benchmark for price changes across a fixed basket of goods in the nation, regions and metropolitan areas.4 The basket contains goods and services classified into the general categories of food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services. The basket is developed from detailed spending information provided by individuals and families on the BLS’ Consumer Expenditure Survey. The survey provides a sense of local consumer spending habits, which look a bit different in each area. As consumer spending habits differ by geography, so does the basket of goods. For example, housing comprises the largest share of consumer spending (39 percent in the NYC metro area), but the second largest expense varies. In the NYC metro area, it is food (13 percent); in the Los Angeles metro area, it is transportation (16 percent). These consumer spending habits are important for understanding how the CPI is calculated, since price changes are weighted by the importance of an item in the spending patterns of a particular regional population.5 NYC Metro Area Prices Rising More Slowly Prior to the pandemic, the last major U.S. recession lasted from December 2007 to June 2009. In the period since, inflation remained low: annual price increases averaged 1.6 percent compared to the same month in the prior year from January 2009 to December 2019. As shown in Figure 1, during this period, consumer price increases in the NYC metro area generally tracked the nation, with prices rising slightly more nationally (22 percent) than in the NYC metro area (20 percent). FIGURE 1: Cumulative Increase in Consumer Prices from January 2009 to December 2019, NYC Metro Area and U.S. Sources: U.S. Bureau of Labor Statistics, Consumer Price Index; OSC analysis At the onset of the pandemic, consumer price increases slowed more nationally than in the NYC metro area, and began to rise beyond 2 percent nationally in March 2021 and in the NYC metro area in April 2021. As shown in Figure 2, consumer prices from the same month in the prior year have accelerated since then, but less so in the NYC metro area than nationally. In March 2022, the most recent month for which data are available, prices grew 8.5 percent nationally compared to 6.1 percent in the NYC metro area. FIGURE 2: Growth in Consumer Prices from the Same Month in the Prior Year, NYC Metro Area and U.S., January 2020 to⁠ March 2022 Sources: U.S. Bureau of Labor Statistics, Consumer Price Index; OSC analysis Slower Growth in NYC Metro Area Prices To Date Prior to the pandemic, annual growth rates in overall prices in the NYC metro area lagged behind many other large metropolitan areas. At the onset of the pandemic in March 2020, prices had been rising more in the NYC metro area than in other large urban areas and the nation. As shown in Figure 3, by March 2021, prices grew more sharply in almost all other large metro areas for which BLS issued reports. One reason is housing prices, the largest component of the basket, grew more rapidly in more sprawled metros between 2020 and 2021, as demand for more space took hold during the pandemic. For the most recent year, price increases in other large metro areas ranged from 7.3 percent in Boston to as high as 10.2 percent in Tampa in March 2022—compared to 6.1 percent in the NYC metro area. FIGURE 3: Annual Percent Changes in CPI, Select Metropolitan Areas and Nation, March 2019 to March 2022 Sources: U.S. Bureau of Labor Statistics, Consumer Price Index; OSC analysis Energy prices were the fastest growing item across all metro areas between March 2021 and March 2022. As shown in Figure 4, prices for food grew faster in the NYC metro area than in many metro areas; on the other hand, prices for housing grew more slowly. Transportation prices rose by double digits across all metro areas for which BLS issued reports; reliance on automobiles, which experienced sharp price increases in new and used markets from supply chain issues, likely fueled this growth. In contrast, there is widespread reliance in the NYC metro area on mass transit systems, which did not experience similar increases and likely moderated the growth in transportation prices relative to other metros. FIGURE 4: Annual Percent Change in Select CPI Categories, March 2022 Sources: U.S. Bureau of Labor Statistics, Consumer Price Index; OSC analysis Earnings Lag Price Growth Rising energy prices accounted for almost 59 percent of the increase in consumer prices in the NYC metro area in March 2022 over the prior year. As shown in Figure 5, NYC metro area price increases in March 2022 were greatest for energy (32.7 percent over March 2021), followed by transportation (14.7 percent), recreation (8.3 percent) and food (8.0 percent). Prices for housing grew more slowly (4.1 percent); nevertheless, the increase was greater than in the year ending in March 2021 (1.0 percent), and growth has picked up in recent months. More importantly, price increases in the last year may be outstripping earnings growth and squeezing household budgets. The most recent data through March 2022 are only available at the state level; while this is an imprecise comparison to the NYC metro area, it provides some insight given the disproportionate concentration of the state labor force in the downstate area. While prices grew 6.1 percent in March 2022 from the same month in the prior year, statewide hourly earnings grew merely 2.3 percent. The disparity suggests consumers may be losing their purchasing power. FIGURE 5: Annual Percent Changes in Major CPI Categories in the NYC Metro Area, March 2021 to March 2022 Note: Prices for recreation grew by 0.1 percent between March 2020 and March 2021. Sources: U.S. Bureau of Labor Statistics, Consumer Price Index; OSC analysis Conclusion Recent acceleration of inflation is attributed to a number of factors, including increased money supply from federal stimulus payments, supply chain disruptions and labor shortages. Consumer spending habits have already shifted in response to growing prices, as fewer households are making large purchases related to vacations, home repairs, home appliances, furniture, and vehicles.6 However, price increases on essential items, such as food and housing, will be difficult to avoid. As consumer expectations adapt to persistent inflation, workers are likely to demand greater wages; this may, in turn, lead to greater price increases. There are some signals inflation, at least on some items such as used cars, may be moderating. As the pandemic has abated, fiscal stimulus has tapered off and local supply chains have restarted. The Federal Reserve Board has also tightened monetary policy and begun raising interest rates. These forces are expected to ease the rise of inflation. However, global supply chain challenges and the effects of geopolitical instability on commodity prices are likely to continue to pressure prices upward. A tight labor market and increases in the cost of transporting items are also likely to remain. Changes to demand based on behavioral responses to a changing public health, economic and geopolitical environment may also have unanticipated effects on future sources of inflationary pressure. Tracking the rise of prices, and the consumer response to these changes, is necessary to understand New York State’s economic outlook and potential effects on its fiscal picture. Endnotes 1 U.S. Bureau of Labor Statistics (BLS), Consumer Price Index (CPI), March 2022, available at https://www.bls.gov/news.release/pdf/cpi.pdf and  https://www.bls.gov/regions/new‑york‑new‑jersey/news‑release/consumerpriceindex_newyorkarea.htm. 2 Annual rate refers to the change in prices in a given month compared to the same month in the prior year. 3 Federal Reserve Bank of New York, Survey of Consumer Expectations, Inflation Expectations, available at https://www.newyorkfed.org/microeconomics/sce#/inflexp‑1. 4 The U.S. BLS reports consumer price increases for the nation (U.S. city average), four regions, and 23 metropolitan areas (Atlanta, Baltimore, Boston, Chicago, Dallas, Denver, Detroit, Houston, Los Angeles, Miami, Minneapolis, New York, Philadelphia, Phoenix, Riverside, San Diego, San Francisco, Seattle, St. Louis, Tampa, Urban Alaska, Urban Hawaii and Washington). Monthly data are provided for the four regions and the Chicago, New York and Los Angeles metropolitan areas; bimonthly data are provided for all other metropolitan areas. 5 Some basket items, including food and energy, can exhibit greater volatility in prices over time. Therefore, some analysts tend to prefer the Core CPI, which excludes these goods. 6 Federal Reserve Bank of New York, Survey of Consumer Expectations Household Spending Survey, January 2022.

MAYOR ADAMS’ STATEMENT ON REFORMING RIKERS ISLAND

 

 New York City Mayor Eric Adams today released the following statement on reforming Rikers Island:  

 

“This administration took control of Rikers Island amidst historic challenges, including deliberate disinvestment in the jail complex, an ongoing COVID-19 crisis, and huge staffing challenges. Since Commissioner Molina assumed office, in conjunction with the federal monitor, we’ve seen reductions in use of force and assaults on staff, increased searches for weapons and contraband, and sick leave that has dropped to levels not seen since before last summer’s horrendous shortages.  

 

“On the first day of my administration, I appointed Commissioner Molina to lead this work, and he is laying the groundwork for long-term change. As a corrections professional with a proven track record who worked successfully with a monitor and the U.S. Attorney’s Office for the Southern District to reform the Westchester County Jail, I know he is the right person to take on this extraordinarily difficult work. Fixing Rikers is critically important, a moral imperative, and we need to get it right. But to do that, we need the opportunity to implement our plan. These are generational challenges, deeply ingrained, and no administration can solve them in less than four months. We look forward to continuing our close collaboration with the federal monitor and all other stakeholders.”

Long Island Medical Doctor Charged as Part of COVID-19 Health Care Fraud Enforcement Action

 

 An indictment was returned yesterday in Central Islip charging Dr. Perry Frankel with three counts of health care fraud for an alleged scheme to defraud Medicare and Medicaid of over $1.3 million in claims that were billed during the COVID-19 health emergency in connection with COVID-19 testing. Frankel, a cardiologist and the owner and operator of Advanced Cardiovascular Diagnostics PLLC, allegedly caused the submission of claims to Medicare and Medicaid for office visits that were not performed for patients who received COVID-19 tests at Advanced Cardiovascular Diagnostics PLLC’s mobile testing sites across Long Island, including on dates when Frankel was not present in the state of New York. Frankel was arrested this morning and will be arraigned this afternoon before United States District Judge Joanna Seybert.

Breon Peace, United States Attorney for the Eastern District of New York, Kenneth A. Polite, Jr. Assistant Attorney General of the Justice Department’s Criminal Division; and Scott J. Lampert, Special Agent-in-Charge, U.S. Department of Health and Human Services, Office of Inspector General’s Office of Investigations (HHS-OIG), announced the charges.

“As alleged, exploiting a public health crisis by using patients who received COVID-19 tests at mobile testing sites to fraudulently bill Medicare and Medicaid for fictitious office visits is reprehensible,” stated United States Attorney Peace. “This Office and our law enforcement partners will vigorously prosecute those who take advantage of the pandemic to steal from taxpayer-funded programs."

“As alleged, Frankel took advantage of the COVID-19 health crisis to engage in a fraud scheme that undermined our health care system and the people it serves,” said HHS-OIG Special Agent in Charge Lampert. “Such scams waste taxpayer funds and drive up healthcare costs for all of us. HHS-OIG and our law enforcement partners will remain vigilant in our efforts to root out all related fraud schemes during the ongoing public health emergency.”

“The Department of Justice’s Health Care Fraud Unit and our partners are dedicated to rooting out schemes that have exploited the pandemic,” said Assistant Attorney General Polite. “Today’s enforcement action reinforces our commitment to using all available tools to hold accountable medical professionals, corporate executives, and others who have placed greed above care during an unprecedented public health emergency.”

The charges filed in Central Islip are part of a coordinated health care fraud enforcement action across nine federal districts, led by the Medicare Fraud Strike Force, that resulted in criminal charges against 21 defendants for their alleged participation in health care fraud schemes related to COVID-19 involving more than $149 million in false and fraudulent claims.

HHS-OIG is investigating the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. Trial Attorneys Kelly M. Lyons and Patrick J. Campbell of the Fraud Section are in charge of the prosecution.

The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

Governor Hochul Updates New Yorkers on State's Progress Combating COVID-19 - APRIL 21, 2022

 

18 Statewide Deaths Reported Yesterday        

 Governor Kathy Hochul today updated New Yorkers on the state's progress combating COVID-19.   

"By using the tools, we can protect ourselves from subvariants and keep both ourselves and our loved ones healthy," Governor Hochul said. "Make sure to keep up to date on vaccine doses, get the second booster as soon as you are eligible, and make sure your children are fully vaccinated. Remember to get tested before traveling and ask your doctor about treatments if you test positive."   

Today's data is summarized briefly below:   

• Cases Per 100k - 34.77  
• 7-Day Average Cases Per 100k - 31.36  
• Test Results Reported - 93,758  
• Total Positive - 6,794  
• Percent Positive - 7.42**  
• 7-Day Average Percent Positive - 5.94%**
• Patient Hospitalization - 1,453 (+49)  
• Patients Newly Admitted - 267
• Patients in ICU - 168 (-2)
• Patients in ICU with Intubation - 59 (-7)
• Total Discharges - 294,173 (+235)
• New deaths reported by healthcare facilities through HERDS - 18
• Total deaths reported by healthcare facilities through HERDS - 55,348 

** Due to the test reporting policy change by the federal Department of Health and Human Services (HHS) and several other factors, the most reliable metric to measure virus impact on a community is the case per 100,000 data -- not percent positivity.  

The Health Electronic Response Data System is a NYS DOH data source that collects confirmed daily death data as reported by hospitals, nursing homes and adult care facilities only.   

Important Note: Effective Monday, April 4, the federal Department of Health and Human Services (HHS) is no longer requiring testing facilities that use COVID-19 rapid antigen tests to report negative results. As a result, New York State's percent positive metric will be computed using only lab-reported PCR results. Positive antigen tests will still be reported to New York State and reporting of new daily cases and cases per 100k will continue to include both PCR and antigen tests. Due to this change and other factors, including changes in testing practices, the most reliable metric to measure virus impact on a community is the case per 100,000 data -- not percent positivity.  

• Total deaths reported to and compiled by the CDC - 70,622        

This daily COVID-19 provisional death certificate data reported by NYS DOH and NYC to the CDC includes those who died in any location, including hospitals, nursing homes, adult care facilities, at home, in hospice and other settings.      

• Total vaccine doses administered - 38,092,465
• Total vaccine doses administered over past 24 hours - 31,933 
• Total vaccine doses administered over past 7 days - 194,811
• Percent of New Yorkers ages 18 and older with at least one vaccine dose - 92.3%  
• Percent of New Yorkers ages 18 and older with completed vaccine series - 83.6%  
• Percent of New Yorkers ages 18 and older with at least one vaccine dose (CDC) - 95.0%  
• Percent of New Yorkers ages 18 and older with completed vaccine series (CDC) - 86.6%  
• Percent of New Yorkers ages 12-17 with at least one vaccine dose (CDC) - 82.9%  
• Percent of New Yorkers ages 12-17 with completed vaccine series (CDC) - 72.9%  
• Percent of all New Yorkers with at least one vaccine dose - 81.8%  
• Percent of all New Yorkers with completed vaccine series - 74.0%  
• Percent of all New Yorkers with at least one vaccine dose (CDC) - 90%  
• Percent of all New Yorkers with completed vaccine series (CDC) - 76.7%  

Each New York City borough's 7-day average percentage of positive test results reported over the last three days is as follows **:     

Borough	Monday, April 18, 2022	Tuesday, April 19, 2022	Wednesday, April 20, 2022
Bronx	1.72%	2.20%	2.41%
Kings	3.18%	3.37%	3.63%
New York	4.85%	4.97%	5.19%
Queens	3.08%	3.45%	3.90%
Richmond	3.45%	3.98%	4.37%

DEC COMMISSIONER SEGGOS ANNOUNCES STATEWIDE DIESEL TRUCK EMISSION ENFORCEMENT BLITZ DURING EARTH WEEK

 

Supports New York State’s Efforts to Reduce Harmful Air Emissions, Particularly in Environmental Justice Communities Disproportionately Overburdened by Pollution

 New York State Department of Environmental Conservation (DEC) Commissioner Basil Seggos today visited Albany’s South End neighborhood to announce a week-long truck enforcement detail happening in disadvantaged communities across the State as part of New York’s commemoration of Earth Week. Environmental Conservation Police Officers (ECOs) from DEC’s Division of Law Enforcement, in coordination with DEC’s Division of Air Resources staff, are conducting the details to protect public health and the environment by inspecting diesel vehicles to ensure compliance with the State’s stringent air regulations. This enforcement blitz will take place in approximately 30 locations to advance efforts to reduce harmful air emissions, especially in disadvantaged communities most impacted by transportation pollution. 

“New York State continues to lead the nation in taking bold action to reduce greenhouse gas emissions and other air pollutants that harm our environment, economy, and affect Environmental Justice communities that are disproportionately impacted by pollution,” Commissioner Basil Seggos said. “This latest diesel truck detail, happening as we commemorate Earth Week, will take dirty trucks off our roads and provides us with a great example of why we need to accelerate our transition from fossil fuels to prevent the damage they cause to our climate and the health of our communities.”

The detail will help identify non-compliant heavy-duty vehicles and reduce emissions of fine particulate matter in disadvantaged communities where there is often significant heavy-duty vehicle traffic. DEC’s Earth Week enforcement details are happening in and around Environmental Justice communities in Suffolk, Nassau, Queens, Bronx, Westchester, Rockland, Orange, Ulster, Dutchess, Schoharie, Delaware, Montgomery, Rensselaer, Clinton, Washington, Warren, Saratoga, St. Lawrence, Jefferson, Oneida, Cortland, Oswego, Broome, Seneca, Schuyler, Steuben, Allegany, Chautauqua, Niagara, and Erie counties.

In addition to conducting emissions inspections on diesel vehicles, ECOs will also engage in targeted enforcement of regulations restricting idling time for diesel vehicles. Reduced idling time cuts down on air pollution and noise, improves fuel economy, and saves diesel operators and consumers money. Officers will also monitor compliance of pesticide applications, solid waste transportation, and open burning as part of the Earth Week detail.

New York prioritizes climate justice in several ways, including in the implementation of the ambitious Climate Leadership and Community Protection Act which requires the State to invest or direct resources to ensure that disadvantaged communities receive at least 35 percent, with the goal of 40 percent, of overall benefits of spending on clean energy and energy efficiency programs. Draft criteria developed by the Climate Justice Working Group will guide the equitable implementation of the Climate Act. The draft criteria include an interactive map and list of communities the criteria would cover for directing programs and projects to reduce air pollution and climate-altering greenhouse gas emissions, provide economic development opportunities, and target clean energy and energy efficiency investments. New Yorkers can comment on the draft disadvantaged communities criteria until July 7, 2022, by going to https://climate.ny.gov. In addition,  the Draft Scoping Plan, which describes recommended policies and actions to help New York meet its climate directives as part of the Climate Act, is available for public comment until June 10, 2022, at https://climate.ny.gov.

The transition to electric vehicles (EVs) is a critical component of improving the air quality in disadvantaged communities and will achieve the goals in the Climate Act. Earlier this year, Governor Kathy Hochul’s State of the State address included several initiatives to support New York’s transition to electric vehicles, including: the commitment to convert the State agency fleet to all zero-emission vehicles by 2035; require the purchase of zero-emission school buses by 2027; and invest $1 billion in electric transportation, mostly directed to charging infrastructure.

In addition, Governor Hochul signed legislation this past September requiring the sale of 100 percent zero-emission cars by 2035, and 100 percent zero-emission trucks and buses by 2045. DEC is also enacting regulatory requirements that are driving a transition to EVs as more and more electric vehicles are now available across the market, from passenger cars to SUVs and pickup trucks. This includes New York’s adoption of California rules requiring vehicle manufacturers to sell an increasing amount of zero-emission cars and light trucks, and issuing the Advanced Clean Truck Rule, which requires manufacturers of trucks and buses to sell a certain percentage of zero-emission trucks and buses.

Existing programs to help fund the transition to zero-emission vehicles include the New York Truck Voucher Incentive Program (NYTVIP), administered by the New York State Energy Research and Development Authority (NYSERDA), which helps make it easier for fleets to adopt zero-emission vehicle technologies while removing the oldest, dirtiest diesel engines from New York roads. NYTVIP provides vouchers, or discounts, to fleets across New York State that purchase or lease medium- and heavy-duty zero-emission battery electric or hydrogen fuel cell electric vehicles. The New York State Clean Diesel Grant Program (NYSCDGP) is another initiative designed to improve air quality by reducing harmful diesel exhaust emissions that usually come from older trucks, marine vessels, and other diesel-powered equipment. NYSCDGP has received funding through the Diesel Emission Reduction Act since 2008 to provide opportunities and incentives to public and private entities with eligible projects. DEC also administers the Municipal ZEV Rebate through the Climate Smart Communities Program to provide rebates to cities, towns, villages, counties, and New York City to purchase or lease eligible new zero-emission vehicles for fleet use.

For more information visit Heavy Duty Vehicles - NYS Dept. of Environmental Conservation.