Dallas-Fort Worth hit with 10th highest inflation rate in U.S., new report says

As if living comfortably in Dallas-Fort Worth wasn’t already hard enough to afford in 2023, now a new report says inflation is rising more quickly in the Metroplex than in other parts of the United States. Yet, the news seems to be better than it was last year.

Financial experts at WalletHub compared 22 of America’s largest metropolitan statistical areas (MSAs) with Consumer Price Index data to measure inflation trends in two categories: last March and year-over-year changes.

"Though inflation has started to slow slightly due to factors like the Federal Reserve rate hikes, the year-over-year inflation rate was still a whopping 5 percent (nationally) in March," WalletHub says. "This high inflation is driven by a variety of factors, including the continued presence of the COVID-19 pandemic, the war in Ukraine and labor shortages."

Dallas-Fort Worth-Arlington ranked No. 10 in WalletHub's new list of cities where inflation is rising the most. The Consumer Price Index change in March when compared to two months prior showed a 1.3 percent increase, while inflation increased 5.8 percent last month, since March 2022.

Despite the current inflation woes, the region seems to be faring slightly better than it was last year. The latest ranking is a five-place drop from WalletHub’s last report, when DFW was saddled with the fifth highest inflation rate in the U.S., at 9.4 percent, year-over-year.

Roosevelt University Associate Professor of Finance and Real Estate Dr. Henry I. Silverman says in the report that rising interest rates are the traditional tool that banks use to fight inflation, but aren’t necessarily cost effective for consumers.

“Unfortunately, not only do higher rates make it more expensive for consumers to borrow money and thus afford many of the things we would otherwise purchase, but they also make it more costly for firms to expand and produce more goods and services which might otherwise help lower inflation,” he says.

Dallas-Fort Worth wasn’t the only Texas metro area to make WalletHub’s top 10. Houston ranked three places higher at No. 7, with inflation rising nearly 2 percent in March from January, but 5 percent greater year-over-year. Last year’s report put Houston at No. 10, with year-over-year inflation for August 2022 at 9.5 percent.

Silverman warns that inflation and true economic growth are “not negatively correlated,” but many economists are predicting a recession this year.

“[H]igher inflation tends to be associated with lower real economic growth in the future,” Silverman says. “Undoubtedly, this is in part due to the higher interest rates that often follow higher inflation rates which inevitably slow economic activity, consumption, investment, etc[etera].”

The top 10 metro areas where inflation is rising the most are:

• No. 1 – Philadelphia-Camden-Wilmington
• No. 2 – Detroit-Warren-Dearborn
• No. 3 – Phoenix-Mesa-Scottsdale
• No. 4 – Seattle-Tacoma-Bellevue
• No. 5 – Atlanta-Sandy Springs-Roswell
• No. 6 – Tampa-St. Petersburg-Clearwater
• No. 7 – Houston-The Woodlands-Sugar Land
• No. 8 – San Francisco-Oakland-Hayward
• No. 9 – Baltimore-Columbia-Towson
• No. 10 – Dallas-Fort Worth-Arlington

The full report can be found on wallethub.com.