The pace of Southern California inflation rose slightly in July as trade tensions helped nudge the cost-of-living higher.
My trusty spreadsheet reviewed the Consumer Price Indexes for Los Angeles and Orange counties and the Inland Empire to see how inflation’s annual pace in July compared with 2025’s first half and all of 2024. And let’s remember, this summer’s inflation is nowhere near the red-hot surges of 2021-23.
LA-OC’s overall inflation rate was 3.2% for July, up slightly from 3.1% in the first half. Yet it’s below the 3.3% rate for 2024 and the 4.9% annual average during 2021-23.
For the Inland Empire, overall inflation ran 3.5% for July. That’s up from 2.8% in the first half and 2.6% in 2024. Yet it’s better than 6.4% a year during 2021-23.
Nationwide, the inflation rate was 2.7% for July – up from the first half’s 2.6% but below last year’s 3% and an average 5.6% in 2021-23.
Flash point
Inflation has become a political flash point nationwide as debate intensifies over new trade policies and interest rates.
For example, who’s paying for the Trump administration’s use of tariffs to minimize purchases of imported goods? Is it foreign factory owners or importers? What part of those levies are eventually paid by consumers – added costs that increase inflation?
And how low must inflation go before the Federal Reserve reduces the interest rates it controls?
Fed Chair Jerome Powell doesn’t want to cut rates until the tariff fallout on inflation is clear. His critics, notably President Donald Trump, think he should have cut rates months ago.
By the slice
Look at one slice of the CPI math hit by trade tensions – the so-called “durable goods.”
These pricier items, designed to last three years or more, are often made in foreign factories. Think vehicles, electronics, furniture and appliances.
Costs jumped in the pandemic era due to shortages tied to supply chain challenges. When inventories stabilized, discounts were common. Those price cuts seem to be ending.
In LA-OC, prices for durable goods were falling at a 0.7% annual rate for July. But that’s less discounting than 2.2% in 2025’s first half or 2.3% in 2024. Prices rose 4.3% a year during 2021-23.
Inland, durables rose at a 1% rate for July vs. dips of 0.7% in the first half and 4.4% in 2024. These items inflated 4.4% a year in 2021-23.
Gasoline: Bargains, relatively speaking, can be found at the pump. However, declines are shrinking.
In LA-OC, a gallon of gas was 3.7% cheaper in July after slipping at a 5.3% annual rate in the first half and down 5.7% in 2024. Gasoline rose 18.5% a year in 2021-23.
Inland, gas fell at a 5.2% annual rate for July, compared with the first half’s 6% dip and 5.3% in 2024. Gas rose 19% a year in 2021-23.
Groceries: Inflation in your shopping cart remains tepid, but it’s nudging higher.
In LA-OC, the cost of “food at home” rose at a 2.2% annual rate for July vs. 2.3% in the first half and 1.8% in 2024. Shoppers were hit by 6.3%-a-year hikes in grocery bills in 2021-23.
Inland groceries were rising 2.1% a year for July, compared with 1.8% in the first half and a 0.4% dip in 2024. They soared 6.9% annually from 2021 to 2023.
Housing: There was meek improvement for a typical household’s largest expense.
LA-OC housing costs rose 3.7% in the year ended in July vs. 3.8% in the first half, 4.3% in 2024 and 4.2% a year during 2021-23.
Inland housing inflation ran 3.5% for July vs. 3.4% in the first half, 3.7% in 2024 and 6.8% a year during 2021-23.
Pay pops
Strong wage growth helps mitigate the higher cost of living for locals with generous employers.
The federal employment cost index shows wages in the five-county region were up 4.1% a year in 2025’s second quarter. That’s Southern California’s smallest hike since the third quarter of 2020, as pandemic business restrictions were icing the economy.
But it’s a modest drop. Wages rose at a 4.4% pace in the first quarter, 4.5% in 2024 and 5.5% a year during 2021-23. Local annual wage gains, by this measurement, averaged 2.5% in pre-pandemic 2007-19.
Labor costs
Higher salaries can pump up prices at businesses where labor is a significant cost.
Take dining out. The state’s $20-an-hour minimum wage for certain fast-food workers helped increase menu prices. This inflation has cooled but remains above other cost hikes.
LA-OC’s “food away from home” got 4.6% pricier in the year ended in July vs. 5% in the first half, 4.8% in 2024 and 5.5% 2021-23 average.
And inland, dining out rose at a 5.4% annual rate for July vs. 5.5% in the first half, 6.3% in 2024 and 6.7% during 2021-23.
Or look at the price of hiring people to do various chores as measured by the “services less rent” slice of the CPI.
These LA-OC services were 4.4% pricier in the year ended in July vs. 4.2% in the first half, 4.7% in 2024 and 5.5% annually in 2021-23.
And inland? Up 6.1% for July vs. 4% first half, 4.3% in 2024 and 6.4% a year during 2021-23.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com