Inflation is on the rise at a historic pace in the United States. The consumer price index surged 7.5% on an annual basis in January 2022, the highest increase in about 40 years. While wages have also climbed, they have not increased enough to offset rising prices for the typical American worker.

Inflation is being driven in large part by supply chain disruptions, which are limiting production capacity and the availability of certain goods and ultimately leading to higher prices. Pent-up consumer demand in the wake of COVID-19 shutdowns across the globe is exacerbating the problem. Recently, consumers have been feeling the pinch, particularly through higher food, housing, and energy prices.

While consumers across the country are paying more for goods and services now than they were a year ago, exactly how much they are paying depends largely on where they live, as some states have a far higher cost of living than others.

In California, the cost of living is 42.2% higher than it is on average nationwide, according to the Composite Cost of Living Index published by the Missouri Economic Research and Information Center. Overall, the cost of living in California ranks as the third highest among states. It is important to note that this index reflects the annual average cost of living in 2021 and does not account for recent price increases due to inflation.

Of the five specific consumer categories factored into the index – groceries, housing, utilities, transportation, and health care – housing ranks as the most expensive in California relative to national prices, costing about 101.9% more than average. Meanwhile, health care is the least expensive consumer category relative to national averages, with prices about 10.7% higher than they are nationwide.

 

Rank	State	Cost of living	Most expensive category	Least expensive category	Median household income ($)
1	Hawaii	93.3% more than avg.	Housing	Health care	83,102
2	New York	48.2% more than avg.	Housing	Utilities	72,108
3	California	42.2% more than avg.	Housing	Health care	80,440
4	Massachusetts	35% more than avg.	Housing	Utilities	85,843
5	Oregon	30.1% more than avg.	Housing	Utilities	67,058
6	Alaska	27.1% more than avg.	Utilities	Transportation	75,463
7	Maryland	24% more than avg.	Housing	Health care	86,738
8	Connecticut	21.6% more than avg.	Housing	Groceries	78,833
9	Rhode Island	17.2% more than avg.	Utilities	Health care	71,169
10	Vermont	17% more than avg.	Housing	Health care	63,001
11	New Jersey	15.2% more than avg.	Housing	Health care	85,751
12	Maine	15% more than avg.	Housing	Groceries	58,924
13	Washington	11.6% more than avg.	Health care	Utilities	78,687
14	New Hampshire	9.9% more than avg.	Health care	Transportation	77,933
15	Delaware	7.9% more than avg.	Groceries	Utilities	70,176
16	Nevada	6.3% more than avg.	Transportation	Utilities	63,276
17	Colorado	5.3% more than avg.	Housing	Utilities	77,127
18	Arizona	3.2% more than avg.	Housing	Health care	62,055
19	Pennsylvania	2.5% more than avg.	Utilities	Health care	63,463
20	Idaho	2.1% more than avg.	Transportation	Utilities	60,999
21	Virginia	1.8% more than avg.	Housing	Transportation	76,456
22	South Dakota	1% more than avg.	Housing	Transportation	59,533
23	Montana	0.7% more than avg.	Housing	Utilities	57,153
24	Florida	0.3% more than avg.	Groceries	Health care	59,227
25	Minnesota	About avg.	Health care	Housing	74,593
26	Utah	1% less than avg.	Transportation	Utilities	75,780
27	North Dakota	1.8% less than avg.	Health care	Utilities	64,577
28	Wisconsin	3.6% less than avg.	Health care	Housing	64,168
29	North Carolina	4.3% less than avg.	Health care	Housing	57,341
30	Wyoming	5.7% less than avg.	Groceries	Housing	65,003
31	Illinois	5.7% less than avg.	Transportation	Housing	69,187
32	Nebraska	6.3% less than avg.	Health care	Housing	63,229
33	South Carolina	6.4% less than avg.	Utilities	Housing	56,227
34	Kentucky	6.9% less than avg.	Utilities	Housing	52,295
35	Louisiana	7% less than avg.	Health care	Housing	51,073
36	Texas	7.9% less than avg.	Utilities	Housing	64,034
37	Michigan	8.7% less than avg.	Transportation	Housing	59,584
38	Ohio	8.7% less than avg.	Groceries	Housing	58,642
39	New Mexico	9% less than avg.	Health care	Housing	51,945
40	Arkansas	9.1% less than avg.	Groceries	Housing	48,952
41	Indiana	9.4% less than avg.	Utilities	Housing	57,603
42	West Virginia	9.5% less than avg.	Groceries	Housing	48,850
43	Iowa	10.1% less than avg.	Health care	Housing	61,691
44	Missouri	10.2% less than avg.	Utilities	Housing	57,409
45	Tennessee	11% less than avg.	Groceries	Housing	56,071
46	Georgia	11.2% less than avg.	Health care	Housing	61,980
47	Oklahoma	12.1% less than avg.	Utilities	Housing	54,449
48	Alabama	12.1% less than avg.	Utilities	Housing	51,734
49	Kansas	13.5% less than avg.	Health care	Housing	62,087
50	Mississippi	16.7% less than avg.	Health care	Housing	45,792

 

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