A new report found Phoenix’s inflation rate increased over the last four months.
Common Sense Institute Arizona released a report earlier in January showing that Phoenix’s inflation increased from 1.4% in August to 2.2% in December.
Zachary Milne, a senior economist for CSI Arizona, told The Center Square the main drivers of the inflation increase were energy and medical costs. The Bureau of Labor Statistics reported that energy costs rose 4.2% from December 2024 to December 2025, while medical costs rose 7.4% over the same period.
Despite this increase in inflation, Milne said people shouldn’t view it as a huge spike but rather as inflation returning to normal levels in the city.
Compared to the national inflation rate in December, Phoenix’s inflation rate ranks 0.5 percentage point below it.
Milne said the cost of shelter is “depressing inflation” rates in Phoenix, compared to a couple of years ago, when it was one of the main drivers of it. The report said shelter prices were below 1% from February 2025 to December 2025.
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