by T.A. DeFeo
Inflation continues to plague Georgia businesses, and the Atlanta area continues to grapple with inflation, though it may be faring better than other cities in the country, a new analysis revealed.
According to personal finance site WalletHub, the Atlanta-Sandy Springs-Roswell metropolitan statistical area (MSA) ranks 11th out of 23 major MSAs for its change in inflation. An analyst with the site said the ranking highlights some positive and concerning aspects policymakers should consider.
“On the one hand, the city’s year-over-year inflation rate of 2.6 percent is notably lower than many other major metro areas, indicating that Atlanta and its surrounding areas are faring better in managing long-term inflation,” WalletHub writer Chip Lupo told The Center Square via email. “However, the 0.7 percent increase in the Consumer Price Index over just the past two months ranks it 5th highest, which suggests a recent uptick in inflationary pressure.
“From a public policy perspective, this suggests that while long-term inflation control measures may be effective, recent factors like labor shortages or supply chain disruptions could be driving short-term increases,” Lupo added. “Policymakers should consider implementing targeted measures to address these short-term pressures, such as investing in workforce development to alleviate labor shortages or supporting local businesses in managing supply chain challenges. Additionally, monitoring and adapting to evolving economic conditions will be crucial to sustaining the progress made in managing long-term inflation.”
On Wednesday, the National Federation of Independent Business released the 11th edition of its quadrennial Small Business Problems and Priorities report.
“Inflation is driving up the cost of living, working, and doing business in Georgia, and it causes a lot of uncertainty,” NFIB State Director Hunter Loggins said in a statement. “It forces consumers and small business owners to think carefully before making big purchases. Small business owners, though, are encouraged by Gov. Brian Kemp’s efforts to reduce Main Street’s tax burden. That includes signing House Bill 808, which reduced paperwork and lowered property taxes.”
Meanwhile, Kennesaw State University professor David Shock told WalletHub that interest rates will likely drop since inflation has declined in 2024. Such a move should reduce companies’ borrowing costs, stimulating the economy.
“However, the U.S. is due for a recession, so a drop in interest rates might not lead to economic growth and stock market increases if the country is in the early phase of a recession,” Shock told the site. “It is hard to predict the future of the economy because we do not really know what the reasons will be for interest rates being cut by the Federal Reserve. Are interest rates being cut because of reductions in inflation? Or are interest rates dropping because the country is entering a recession caused by the high interest rates?”
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T.A. DeFeo is a contributor to The Center Square.
Photo Atlanta” by Ronny Sison.