A new economic report shows that Phoenix’s inflation rate has climbed over the last four months, rising from 1.4% in August to 2.2% in December, driven largely by higher energy and medical costs.
According to the analysis from Common Sense Institute Arizona, energy prices increased by more than 4% from December 2024 to December 2025, while medical costs jumped over 7% during the same period. A senior economist with the institute said the rise doesn’t represent a dramatic spike, but rather a return toward more typical inflation levels for the region.
Compared to the national inflation rate in December, Phoenix’s rate remains about half a percentage point lower, in part because shelter costs—which once significantly boosted inflation locally—have cooled. The report shows shelter prices stayed under 1% from February through December 2025, helping temper overall inflation.
Looking at longer‑term trends, the report found that Phoenix’s inflation rose about 29% between December 2019 and December 2025, translating into roughly $1,441 more per month in household expenses on average. During that period, Phoenix’s overall inflation rate was about 3 percentage points higher than the national average. When shelter costs are removed from the calculation, Phoenix’s inflation increase was smaller than the national figure.
Housing costs in Phoenix have climbed sharply in recent years. Data cited in the report shows that the average home price in the city grew from about $265,000 in December 2019 to more than $400,000 six years later, a roughly 52% increase.
Despite the uptick in inflation late last year, Phoenix still ranked as having the eighth‑lowest inflation among U.S. metro areas. That marks a significant change from 2022, when Phoenix had one of the highest inflation rates in the country at 11.5% before dropping to around 5.2% the following year.
Economists involved with the report expect Phoenix’s inflation to stay near 2% moving forward, a level that would align it more closely with national trends and suggest stability for local consumers after years of volatile price growth.
