Consumer prices in Alaska jumped up 3 percent in 2018 and updates from February and April of this year hint at more of the same in 2020, says state labor economist Neal Fried.
One of the biggest contributors to 2018’s overall cost of living increase in Alaska was medical care, which has run much higher than the overall index for years, Fried notes in his commentary on the cost of living in Alaska in 2018 and early 2019, published in the July issue of Alaska Economic Trends (labor.alaska.gov/trends/jul19.pdf).
Nothing matches the cost of the rise in health care, and energy prices are the most volatile component, he said.
While medical care is a small component of the consumer price index, its meteoric rise is worth noting, Fried said. Between 2010 and 2018, Alaska’s overall index increased 15.6 percent and health care costs rose 38 percent. No other CPI component has come close, and price increases for health care have been larger for Alaska than the U.S. in most years, he said.
Energy prices, being the most volatile component of the index, also can play a major role in its year-to-year changes. In 2015, Alaska’s energy index fell 10.3 percent, and in 2018, it grew 8 percent, he said.
The CPI, generally speaking, only shows change in costs in a single area over time, but is also useful for calculating change in the value of the dollar, Fried said. As an example, he cites the average single-family home on the Kenai Peninsula selling for $229,000 in 2010. That same house cost $278,575 in 2018.
Fried offers in-state cost comparison examples of some popular items on Alaskans’ shopping lists. In 2019:
- A loaf of bread priced at $4.49 in Anchorage, $3.09 in Fairbanks and $5.82 in Juneau, compared with the national average of $3.40.
- Cell phone service per month was $179.40 in Anchorage, $176.40 in Fairbanks and $186.60 in Juneau, compared to the national average of $179.21.
- Veterinary visits were $67.50 in Anchorage, $48.25 in Fairbanks and $50.69 in Juneau, compared to the U.S. average of $52.17.
- Medium cheese pizzas, sold at an average price of $10.31 nationally, were $10.99 in Anchorage, and $11.99 in Fairbanks and Juneau.
Fried also cites reports produced quarterly by the University of Alaska Fairbanks’ Cooperative Extension Service on the cost of food at home for a week in surveyed communities around the state. The market basket includes items with minimum levels of nutrition at the lowest possible cost, based on the needs of a family of four with two children, ages 6 and 11.
Bethel topped the list in late 2018, with groceries costing well over double the U.S. average, at $396 a week. The same groceries, in December 2018, cost $303 in Cordova, $274 in Sitka, $262 in Haines, $258 in Delta, $215 in Juneau, $211 in Anchorage and Kenai, $210 in the Mat-Su Borough and $206 in Fairbanks, compared to the average U.S. cost of $149.