In our previous blog post, we reported that inflation was higher in the New York City area than in the Cleveland area. Today, we look at their local incomes to see if the same conditions apply. The top graph shows personal income per capita for these areas. It’s not possible to get a perfect geographic match, but we use Cuyahoga County to represent the Cleveland consolidated metropolitan statistical area and a broader area around New York City (but without the western Connecticut towns used in the previous post). Without forgetting these mismatches, we see that overall income growth seems to be similar in both areas, except for the bubble in NYC just before the previous recession. So it doesn’t look like New Yorkers are compensated for their more-quickly-increasing living expenses.
The bottom graph reveals a similar exercise but with median household income, which is collected by county. Again, we use Cuyahoga County as a proxy for the Cleveland MSA. We use New York County to represent the NYC area.* The picture looks quite different, with Manhattan residents showing impressive income gains recently that probably aren’t matched in the wider New York metropolitan area.
*Admittedly, this is a restrictive choice; but piecing together data from the many surrounding counties is beyond the scope of this post. Readers are always encouraged to browse through FRED’s data aisles to find the best data to meet their needs.
How these graphs were created: Search for “personal income per capita Cleveland” and Cuyahoga County should be near the top. From the “Edit Graph” button, add a line searching for “personal income per capita New York.” For both lines, change units to “100 for selected date” using 1984-01-01 to match the data of the previous blog post. For the second graph, search for “median income Cleveland” then add the second line by searching for “median income New York county.”
Suggested by Christian Zimmermann.
If everyone uses the same currency in the United States, shouldn’t prices and inflation rates be nearly uniform across the nation? To help answer this question, the U.S. Bureau of Labor Statistics computes a limited set of consumer price indices for consolidated metropolitan statistical areas (that is, the agglomeration of neighboring MSAs). They don’t provide as much detail as the nationwide CPI and they’re not necessarily available at monthly intervals, due to data sampling issues. But they can be revealing.
The graph above compares Cleveland and New York City: NYC prices seem to be climbing more than those in northern Ohio. Note that this doesn’t say anything about the levels, only the evolutions. But is this inflation differential uniform across goods? The graph below eliminates shelter from the mix and the gap between the two is noticeably smaller. In other words, differences in inflation for a refrigerator or a gallon of milk are much smaller across the country than differences in inflation for housing.
How these graphs were created: Search for “CPI CMSA Cleveland” and click on the monthly series. From the “Edit Graph” section / “Add Line” tab, search for “CPI CMSA NY” and select the monthly series. In the “Format Graph” section, change the mark type to “square” (there are marks for Cleveland because data are not available for every month). Finally, change the sample period to start on 1984-01-01. For the second graph, repeat the procedure by adding “shelter” to the search terms.
Suggested by Christian Zimmermann.